Net Worth is equal to assets minus liabilities. Which event will have the greatest impact (positive or negative) on one's net worth?

Q. Which event will have the greatest impact (positive or negative) on one's net worth after one month?

1. Buy a used car at market value for $15,000
2. Buy a new car at market value for $15,000. Car depreciates 20% upon transfer of ownership.
3. Lease a $15,000 car on a 3-year lease. The monthly payment is $199 and all lease payments are required in the lease.
4. None of these events will impact the net worth of an individual

Answer: Buy a new car at market value for $15,000. Car depreciates 20% upon transfer of ownership.

Q. Net Worth is equal to assets minus liabilities. Which event will have the greatest impact (positive or negative) on one's net worth?

1. Pay off $4,000 of school loans with cash
2. Go on a vacation that costs $3,500
3. Buy a new car at market value for $15,000. The car depreciates 20% upon transfer of ownership from the dealer to the buyer.
4. Finance a used car at market value for $16,000
5. Inherit $2,000 from a relative

Answer: Buy a new car at market value for $15,000. The car depreciates 20% upon transfer of ownership from the dealer to the buyer.

Net Worth

Net worth is the value of all the non-financial and financial assets owned by an institutional unit or sector minus the value of all its outstanding liabilities. Net worth can apply to companies, individuals, governments or economic sectors such as the sector of financial corporations or to entire countries.

For individuals, net worth or wealth refers to an individual's net economic position, the value of the individual's assets minus liabilities. Examples of assets that an individual would factor into their net worth include retirement accounts, other investments, home(s), and vehicles. Liabilities include both secured debt (such as a home mortgage) and unsecured debt (such as consumer debt or personal loans). Typically intangible assets such as educational degrees are not factored into net worth, even though such assets positively contribute to one's overall financial position.

For a deceased individual, net worth can be used for the value of their estate when in probate. Individuals with considerable net worth are listed as High-net-worth individuals.