HOW TO CALCULATE YOUR NET WORTH?
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14 March 2024
Becoming rich in life is everyone's dream. And people adopt various strategies to achieve their financial goals
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But there is a formula to determine your net worth, to understand how well you're doing financially
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Net worth is the amount an individual has and is calculated by subtracting all liabilities from assets
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To calculate your net worth, multiply your age with your pretax income and divide it by 10
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This excludes any inherited wealth, that should be subtracted from the total
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The formula was given by Thomas J Stanley and William D Danko in their book 'The Next Door Millionaire'
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According to the duo, if your net worth is equal to or more than the remainder, you are wealthy
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For example, an 30-year-old employee earning Rs 15 lakh per annum has a net worth of Rs 45 lakh
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Similarly, the same individual will have a net worth of Rs 1.2 crore at the age of 40 if the pretax income reaches Rs 30 lakh
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