Episode•March 7, 2023•5 min

What is Net Worth and Why Does it Matter? | Ep. 210

Are you curious about your net worth? In this episode of Money Talk with Tiff, Tiffany explains net worth and how to calculate it. Learn how to increase your assets and decrease your liabilities to increase your net worth. Plus, find out how to submit your questions to Tiffany for the podcast. Tune in now to get the answers you need to take control of your finances! Every Tuesday, Tiffany answers one of your submitted questions. To submit a question for an upcoming episode, visit here: https://www.moneytalkwitht.com/asktiffany Connect with Tiffany on Social Media Facebook: Money Talk With Tiff Twitter: @moneytalkwitht Instagram: @moneytalkwitht LinkedIn: Tiffany Grant Timestamps [00:00:00 - 00:01:10] Introduction to Net Worth - Net Worth is the total of all assets minus liabilities. Assets include money in bank accounts, investments, houses, cars, and valuables. Liabilities include credit card debt, house debt, car debt, student loans, personal loans, and tax debt. [00:01:10 - 00:02:12] Calculating Net Worth - Add all assets and subtract all liabilities to calculate net worth. It is possible to have a negative net worth, but working towards making it positive is essential. [00:02:12 - 00:03:50] Increasing Net Worth - To increase net worth, increase assets, or decrease liabilities. Increasing assets can be done by investing or having more cash on hand. Decreasing liabilities can be done by paying down debt. [00:03:50 - 00:04:47] Conclusion - Tiffany concluded the episode by encouraging listeners to submit their questions at www.moneytalkwitht.com/tiffany. She also reminded them to spend wisely by spending less than they make. This podcast uses the following third-party services for analysis: Podcorn - https://podcorn.com/privacy OP3 - https://op3.dev/privacy

Apple Podcasts Spotify YouTube Overcast Amazon Music

Key Takeaways

1
Net worth equals assets minus liabilities
Assets include cash in bank accounts, investments, house, car, and valuables
Liabilities include credit card debt, mortgage, car loans, student loans, personal loans, and tax debt
Subtracting liabilities from assets yields your net worth figure
2
Negative net worth is common and not a reason to panic
Tiffany started with a negative net worth of approximately -$50,000
Focus on building good financial habits to move toward positive territory
Progress comes from consistent action rather than immediate perfection
3
Two primary ways to increase net worth
Increase assets by growing investments, home value, or cash reserves
Decrease liabilities by systematically paying down debt
Either approach (or both) will raise the final net worth number
4
Track and review your net worth regularly
List all assets on one side and all liabilities on the other
Recalculate periodically to measure financial progress
Use the number as motivation rather than a source of shame

Intro

In this solo episode of Money Talk with Tiff, Tiffany answers a listener question about net worth, explaining how to calculate it and how to improve it over time.
Tiffany Grant is a financial coach and host of the Money Talk with Tiff podcast, where she answers listener-submitted money questions each week.

Submit a question Facebook Twitter Instagram LinkedIn

– Introduction & Listener Question

Tiffany opens the episode by welcoming listeners to 'Tiffany's Take' and shares that this week's question is about net worth rather than budgeting.

I thought you all were going to kill me with some more budgeting questions... but I actually have one that is not about budgeting. So I'm like, yay, let's do that one.
– Tiffany Grant

– Definition of Net Worth

Net worth is defined as total assets minus total liabilities. Tiffany lists common assets (bank accounts, investments, house, car, valuables) and liabilities (credit cards, mortgage, car loans, student loans, personal loans, tax debt).

– How to Calculate Net Worth

List all assets on one side and all liabilities on the other, then subtract liabilities from assets. The resulting number is your net worth.

When you see people talking about, oh, I have a million dollar net worth or I have a negative net worth, now you know how they came up with that number.
– Tiffany Grant

– Negative Net Worth & Mindset

Tiffany shares that she once had a negative net worth of roughly -$50,000 and encourages listeners not to feel ashamed if they are starting from a negative position.

It's okay to have a negative net worth as long as you're working towards making it back positive.
– Tiffany Grant

– Strategies to Increase Net Worth

To raise net worth, either grow assets (investments, home value, cash reserves) or reduce liabilities (pay down debt). Tiffany emphasizes that both paths lead to a higher net worth.

– Closing & Call to Action

Tiffany reminds listeners to submit questions at moneytalkwitht.com/asktiffany and closes with her signature advice: 'Spend wise by spending less than you make.'