Net Worth: what is it? Do you know yours? in which direction is it heading? This is what Ken Okoroafor of the awarding-winning website TheHumblePenny.com has to say about it.
I had the pleasure, last weekend, of not only sharing the stage with Ken Okoroafor but also of co-leading a workshop with him at the Women of Purpose & Influence (WOPI) conference in Manchester. Ken, together with his wife Mary, became financially-independent at the age of 34 and he is teaching others to do the same.
At the conference, Ken informed the audience that for one to be able to retire well, s/he must list, calculate and know his/her Assets, Liabilities and ultimately your Net Worth (Asset minus Liabilities). Why?
- To make sure that your Total Asset is always greater than your Total Liability which equates to a positive Net Worth.
- To see how your Net Worth is changing on a monthly basis.
- If your Net Worth is decreasing, you are not growing financially.
- For a good retirement, your aim should be for your Net Worth to be 25 times your annual expenses.
- To build your Net Worth, you must break out of the “make money, pay expenses and pay debt” pattern.
- Even when your income increases, keep your expenses and your lifestyle flat.
Would you say that’s good advice? I would. If you want to know more about how Ken and his wife, Mary, help people, check out their website TheHumblePenny.com or take their Financial Joy Academy course.
Until next time.Niyi Adeoshun
Money Management Coach
Author of "The Price of Financial Freedom"
(3 Essential Steps for Breaking the Cycle of Debt)