I came across this interesting picture while reading about personal money management. When referring to an individual, Net Worth refers to the assets minus away the liabilities.
In the above picture, in terms of asset, who do you think is richer?
When we are a student, we have to worry about paying our student loan. When we started working in the society, we definitely will have one or more credit cards. After getting married, we will get a HDB loan to buy a house. If we are lucky, perhaps borrow a car loan to own a car.
What’s my point here?
Well, in my opinion, debt may not necessary be a bad thing if you know how to manage it properly. It gives you quality of life. Having said that, we have to ensure that our income is more than our expenses so that we can maintain a good quality of life without ending up in a serious debt.
Why do I bother to find out my net worth?
I am not trying to be frugal here. My goal is to build enough passive income through investing and collecting dividends to pay off my expenses.