Often times, when we read books or attend workshops related to Personal Finance, one of the exercise that you are requested to do (even before the actual book/workshop started) is to calculate your current Financial Net Worth. It is a simple formula : The sum of all your Assets (cash, investment, CPF balance and properties etc..) MINUS the sum of all your Liabilities (Housing loan, credit cards repayment, car loan etc..). The difference (could be positive or negative) is your Financial Net Worth at the moment.
Recently, I am reading a book by Moshe A. Milevsky called Your Money Milestones. It kinds of throwing a spanner in the works by introducing Human Capital into the equation and claimed that the above-mentioned formula is flawed. In short, he is of the view that Human Capital is our greatest assets and it should formed of the Asset category. Of course, ...
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