Thinking about starting your own business?  If so, one of the very most important items to consider is understanding your own net worth.  I understand we all have different gifts and interests. Some people are not interested in finance and as a result aren't into all the "mumbo-jumbo" of it all. Well, like it or not we all have to be a bit more in-tune with our personal net worth. This is especially true if you are entertaining launching your own company. The reason quite simply is it dictates your quality of life today and in the years to come. Understanding financial matters, budgeting, saving and personal net worth can be likened to our diet and exercise. What we put in our bodies (deposits) and how we exercise (make money work for us) will dictate our health (financial health in the years to come). With that stated, allow me to introduce some of the basics regarding personal net worth.

First, I don't want to assume everyone knows what personal net worth means so let's take a moment to define it.  A person (or couples) net worth summary is a detailed accounting of assets (the things you own), liabilities (the things you owe) and the difference between the two (assets minus liabilities) which is net worth.

Okay, that's out of the way. So why is it important?  Well, if you are 22 years old and your net worth is $0 perhaps that is not a big deal. The reason quite simply is you have your entire life in front of you and the ability to earn money. What if your are 22 and have a negative net worth?  A significant number of people fall into this category because they have college loans, their first new car, etc.  These financial obligations need to be repaid which impacts a person's cash flow as well as their net worth.  When you are considering starting your own business these things have to be taken into consideration as well as "new debt" that might be necessary to launch and sustain the business.

While money is not everything it is important.  It affords us a choice in lifestyle, independence and ability to do things.  It is one of the influencers in determining whether we are going to start a business or not.  Do you know your net worth?   If not I encourage you to utilize the link we've provided or another tool out on the Internet.