The Ultimate Determining Your Net Worth Quiz
How much are you worth today? Is your net worth positive or negative? Should you care if you know your net worth? Take this quiz to check whether you know the how and why of net worth calculations.
What is the purpose of calculating your net worth?
- Calculating your net worth will help you to decide if you need to hire a certified financial planner.
- Calculating your net worth will give you an accurate picture of where you stand financially.
- Calculating your net worth helps you to decide which investments to buy.
What is a simple definition of net worth?
- Net worth is how much money you have available as a safety net if you sold your liquid assets.
- Net worth is a calculation of cash left for investments after you subtract living expenses from your salary.
- Net worth is a dollar amount representing money left if you sold everything and paid off your debts.
What revelation must you prepare yourself for when you are completing your net worth calculation?
- You may find out that you have a negative net worth.
- You may have difficulty finding a realistic value for many of your items.
- You may have a difficult time deciding if some items are liabilities or assets.
If you finish the calculation and have a positive net worth, what now?
- Just relax and carry on, content in the knowledge that you are in good financial standing.
- Now decide how to use your funds wisely to secure your future.
- Take your list of assets and divide them into liquid assets and fixed assets.
How can you best determine the realistic worth of assets such as vehicles, RVs and boats?
- Do a price comparison on the Internet.
- Subtract deprecation and loan balance from the original purchase price.
- Check the current blue book value.
What is a simple definition of liquid assets?
- Liquid assets are cash on hand along with the balance in checking accounts and savings account.
- Liquid assets are valuables that can easily be converted if you need money quickly.
- Liquid assets consist of stocks and bonds that can be converted to cash.
What should you do with an item that you are sure is valuable but have little idea what it is actually worth.
- If the item has sentimental value, it is best to leave it off the list.
- Arrange a professional appraisal.
- Do both of the above.
What are some of the most common liabilities used in a net worth calculation?
- Liabilities include all loan principal amounts and all credit card limits.
- Liabilities include all current loan and credit card balances.
- Liabilities include monthly utility bills, commuting costs and living expenses.
What do you need to keep in mind when calculating a value for major assets like your home and car?
- Use the full market value of the item as an asset regardless of how much you owe on it.
- Subtract the amount you owe on the item from its current worth, the remainder is the asset value.
- Do not count items like homes, cars and boats when you still owe a significant amount of money on them.
What should you carefully consider if you have a negative net worth and are thinking about taking a debt consolidation loan?
- Debt consolidation is not a bad idea if you are careful that you do not end up with a higher interest rate.
- Debt consolidation will have a negative impact on your credit score.
- Debt consolidation will often result in a payment that is higher than the total of your current payments.