Brad Hart breaks down net worth as assets minus liabilities, not cash in hand. A million-dollar net worth might include a home, investments, and a car minus what you owe. Build it by buying assets and paying down debt over 10%.
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So here's what it really means to have a million dollar net worth. Most people don't realize that you don't have to have a million dollars in cash to have a million dollar net worth. And you don't have to have a million dollar income per year to have a one million dollar net worth. So let's break this down. Your net worth is what you own minus what you owe. What you own can be things like your home, your car, your investments and the cash that you have on hand. What you owe would be things like your loans, student loans, car loans, mortgage. And you can have a negative net worth if you have too many loans or too much debt versus what you own. For example, if broke and you go out and get a car loan, debt rises even higher. And that means you're going to have a negative net worth if you do that. What you want to do is grow your net worth over time because this acts like a financial scoreboard. How? Well, there's two ways. First way is to buy assets like rental properties, investments or businesses. The second way is to reduce your debt load by paying off your debt. Specifically high interest debt, which is any debt above about 10%. And the more assets you own, the higher your net worth will rise. Money's just math, people. And more is always better. Follow me for more like this.
