Calculating Your Net Worth – Key Terms to Know
Get to know these terms before starting your net worth calculation process
Assets. Your total assets include personal property, like a home or a vehicle you own, or key household collectibles and valuables, like jewelry or a stamp collection.
Liability. The term liability refers to money you owe, like on a mortgage payment or a credit card account.
Liquid asset. A liquid asset is a financial asset you can sell quickly and easily, like stocks, mutual funds, or valuables.
Illiquid asset. An illiquid asset is an asset that can’t be sold quickly and/or easily, without resulting in a financial loss on the transaction, like a home with negative equity or a poor-performing stock that’s worth less than you paid for it.
Personal property. Personal property means an asset you can physically move, like a piece of jewelry, a painting, a vehicle, or valuable electronics.
Standing property. The term standing property refers to a fixed, immovable asset, like real estate.