Personal net worth
In Lewis Carroll's Alice in Wonderland.
Alice and the Cat are having this conversation.
"Would you like to tell me which way to go should we go?" - Alice asked.
"It depends a lot on where you want to go."
"I don't care," said the Cat.
"I don't care," said Alice
"Is where to go," said the Cat. "
"Just to get somewhere," explained Alice.
"Oh, you can be sure of that," said the Cat.
- You're going somewhere you're gonna get in, of course, unless you stop halfway."
Few people are indifferent to the solution financial issues that don't care what's in to achieve life (whether openly, secretly or without admitting it to yourself). Most people dream (how among other things, and in the first place) about the improvement of your material well-being. This means moving in the exact direction, not "whatever where to."
The management of personal finances is on the right track when it leads to greater financial independence. A person, a lot who has reached in this direction, will not be panicking to become unemployed, as he has a stock of money that makes it possible for some kind of time to cover all the necessary expenses even without of current income.
People, as a rule, have their own and someone else's security, measure the amount of income (wages, income from business, etc.) or on the basis of external attributes (housing, car, clothes, habits of spending free time, etc.). On the basis of these indicators we can say something about the wealth of a person, but we can also make completely wrong conclusions. Firstly, even a large income can quickly lose its significance. Second, consuming too much can be borrowed temporarily from other people's money (i.e. loans).
It is most correct to calculate wealth not depending on income and external attributes, but on the value of net assets, which shows, how much money will a man have left after he's paid of all his debts. As a rule, the value of net assets is high when a person earns a lot and spends little compared to his or her earnings. In other words, it lives below its potential. The previous statement that the assessment of wealth is often misleading on the basis of external luster, can be tested using a test, for example, using the POP 500 rating table of the Äripäev newspaper. Ask the students who, according to their
(b) The person who is the richest person in Estonia is the opinion leader, and then ask them to compare their opinion with a newspaper rating. Obviously, the discrepancies will be significant, as a very large part of the rich people on this list are almost unknown to the general public. As a rule, these people lead of myself very discreetly.
(Note: Strictly speaking, the method of compiling The TOP 500 rating of the Äripäev newspaper is not enough, but at the same time, we're dealing with the most credible the rating, which can only be compiled using scarce public information about private capital, spending a reasonable amount of time and money).