Money in, money out · Module 9 of 10
Everything you own, minus everything you owe
Your net worth: everything you own minus everything you owe, and why watching it over the years tells you so much.
Key terms in Everything you own, minus everything you owe
- Net worth
Net worth is the difference between the total value of what a household owns and the total of what it owes. The Federal Reserve measures it for American families in its Survey of Consumer Finances. It is a snapshot on a given date, in contrast to income, which records money earned over a period.
Source: Federal Reserve, Changes in U.S. Family Finances from 2019 to 2022
- Liability
A liability is an amount owed to someone else, such as a mortgage, a car loan, or a credit card balance. Liabilities are subtracted from assets to find net worth. They can be measured at a point in time, and their size relative to what a household owns shows how much of its wealth is borrowed.
Source: Federal Reserve, Changes in U.S. Family Finances from 2019 to 2022
- Asset
An asset is anything of value that a household owns, including financial holdings such as bank balances, investments, and retirement accounts, and nonfinancial items such as a home, vehicles, or business equity. Assets are added together and compared with liabilities to find net worth. Some can be sold quickly, while others are hard to turn into cash.
Source: Federal Reserve, Changes in U.S. Family Finances from 2019 to 2022
Every term on Lever is in the money glossary.
About this module
Everything you own, minus everything you owe is part of Money in, money out, one of 15 subjects in Lever. It’s a short run of 6 lessons, about 15 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Money in, money out
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1
What lands in your account
Read your payslip line by line and see where the gap between your salary and your paycheck goes.
5 lessons -
2
Your floor and your slack
Work out the least you need each month, the wiggle room above it, and what to do in a tight month.
13 lessons -
3
The size of a life after work
How much of your income to keep for later in life, and why your working years are the easiest time to build it.
5 lessons -
4
The pension that's already being built for you
What the pension deductions on your payslip are buying you, and what changes if you claim early or keep working.
5 lessons -
5
The costs retirement doesn't warn you about
The retirement costs people forget: relying on one income, what a partner is left with, and health costs that rise later.
5 lessons -
6
When there is no wage
Managing money without a regular paycheck: cash income, gig work, months with nothing coming in, and making savings last.
7 lessons -
7
When the plan stops matching the month
What to do when your budget stops matching real life, including when it’s the budget that needs to change.
6 lessons -
8
Tracking without obsessing
A simple tracking habit you’ll keep, a quick monthly review, and how to stop a raise from quietly disappearing.
6 lessons -
10
When the money itself shrinks
How to protect your money when prices rise fast: what to buy ahead, and what inflation does to your debts and your pay.
5 lessons
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It’s part of Money in, money out. Lever will bring it to you when you’re ready, or you can go straight there.