In personal finance, people are always talking about their net worth. You would always see people interested in finding out their or other people’s net worth.
Liquid net worth is hugely underappreciated. Yet, knowing and understanding your liquid net worth can be the determining factor in how healthy your life really is
Liquid net worth = liquid assets – liabilities. This is a similar formula compared to the regular net worth.
Your liquid net worth represents the amount of money that you have on hand to pay for different things in your life.
Net worth is all of your assets and liabilities combined. Liquid net worth only looks at your liquid assets and liabilities.
A liquid asset is something that you own that can be quickly converted to cash while keeping its market value.