Net Worth

Every year, Forbes and a variety of other magazines publish their lists of the wealthiest individuals in the world, in the United States, by continent, and by every other division possible. In these lists, there is much talk given to a person’s “net worth.” A person’s net worth is different from mere income or real estate holdings or a stock option. It is a combination of all of a person’s debts and assets.

For an individual, net worth is calculated by adding up all of that person’s assets like cash, real estate holdings, stock, etc. and subtracting all of the person’s liabilities, or debts. The difference between the two numbers, or what is left after debts are subtracted from assets, is the person’s net worth. If the individual’s debts exceed assets, the person is said to have a negative net worth. When the person’s assets exceed their liabilities, the person has a positive net worth.

As an example, pretend that Person A has assets of $500 and liabilities, or debts, of $250. That person is said to have a net worth of $250. If Person B has assets of $250 and liabilities of $500, that person has a negative net worth of $250.

One of the more disturbing trends in our country’s financial situation is that a large number of individuals approaching retirement age are faced with a negative net worth. This will make it much more difficult for them to get through the Golden Years unscathed and without facing financial difficulty.

Contact a Boston Bankruptcy Lawyer

If your net worth is deep in the negative numbers and you are facing a dire financial situation, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346.