The Value of Liquid Net Worth [How You Can Calculate Yours]

As you start on your financial journey or begin focusing on building wealth, you undoubtedly have come across the term “net worth.”

What is Net Worth And Liquid Net Worth?

Your net worth is the sum of your total assets minus your current liabilities. And your liquid net worth is the number of assets you have that could be quickly sold and turned into cash at a moment’s notice. Essentially, if you had to sell immediately, you’d have no problem acquiring the cash value. 

Why Liquid Net Worth is Important

By knowing your liquid net worth, you’ll know how much cash you can access if something unexpected happens and you need a lot of money.

1. You want to know how much you have in case of an emergency

Why Liquid Net Worth is Important

Even if there isn’t an emergency happening, knowing how much you have in liquid assets can simply help you sleep better at night and avoid financial stress. 

2. To know your financial security

Why Liquid Net Worth is Important

You should have a few months of expenses saved up for emergencies already — but if you don’t, knowing your liquid net worth will help you start saving towards that fund. 

3. To encourage you to create an emergency fund

Swipe up now for more  financial tips!