Your net worth is your assets minus your liabilities
December 30th, 2011
Your net worth is your assets minus your liabilities. Liabilities are debts. The more debt you owe, the lower your net worth will be. Plus whenever you have debts, you also pay for the interest, that’s why you lose more. For practical reasons, it’s understandable why people sign up for loans. Take for example, buying a car or a home, it’s hard to shell out cash here and there. That’s why debt is a tool that when used wisely can benefit the borrower. However, the borrower must comprehend that a debt is still a debt and must be paid in due time with interest.
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