Last Friday, I did a post regarding equity (or capital) as it relates to business activity.
But what is your personal net worth? As an exercise, on the left hand side of a spreadsheet make a list of everything you own, savings accounts, retirement accounts (401k's, IRA's, etc.), mutual funds, cars, real estate and their approximate values.
On the right hand side of the sheet, list everything you owe; mortgages, car notes credit cards, etc.
What's your net worth? More importantly, what is ratio of everything you own v. everything you owe.
It's my opinion that a financially "healthy" family will have at least $2 of assets for every one dollar of liability. If you find that your ratio is less than that, budget your monthly income to make it a reality.
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