What is net worth, by definition? What is cash flow? How are they calculated and do they relate to one another?
Understanding the answers to these questions is necessary in order to fully grasp a lot of the content in the Basic Finance Video Course. These terms really define and impact most of the things we do in personal finance, and we will be using them regularly from here on in.
In this first part of our course, we’ll explain the meaning of these two most important terms, and discuss how they relate to one another. We’ll look at a sample cash flow statement and a net worth statement. We’ll also discuss the most important rule for building wealth and achieving financial independence and confidence.
This is a super-simple foundational piece for everyone who wants to master their own finances.
What We Learn In This Video (Length 4:02)
What is cash flow? Your income less your expenses over time.
What is net worth? The value of your assets, minus your liabilities.
- Assets are things you own.
- Liabilities are monies you owe.
What is the connection between cash flow and net worth?
Positive Cash Flow Is The Most Important Tool For Building Wealth
Important Disclaimer: the information above is for general informational purposes only and does not in any way constitute an offer for the purchase or sale of any security and is not intended to be considered comprehensive or personalized financial or investment advice. themoneygeek.info assumes no responsibility for the use or application of this information. Always consult a tax, investment, or other appropriate professional before adopting any new financial strategies.