Do you know what your true net worth is? I bet most of you do not. This number is very important if you are trying to figure out how much you are worth and where you are at on your path to financial freedom as a nurse practitioner.
Figuring this out is simple… Your net worth is determined by your ASSETS minus your LIABILITIES. Essentially, it is what you own minus your debts.
What you own can be the equity in your home, your 401k or IRA balance, how much you have in savings, the value of any collectibles, etc… You need to add up how much money you have either in CASH or in stored value elsewhere (your home equity for example).
After that, you need to then add up your LIABILITIES (your debt). This is everything from student loans to mortgages to auto loans. You need to add up every dollar of debt you have to determine your liability number.
Once you do this, you simply subtract the amount of liabilities from your assets, and you will have your net worth.
For example: $120,000 home equity + $10,000 in savings + $80,000 in 401k – $300,000 mortgage + $40,000 student loans + $45,000 auto loan + $10,000 credit card debt = NEGATIVE $185,000 net worth.
I suspect many of you have a NEGATIVE net worth due to the amount of debt you have in relation to the amount of assets you hold. If your net worth is negative, then you need to stand back and figure out how to turn that into a positive. The first step is aggressive debt pay down and living below your means. You need to generate INCOME to pay off your debt first and foremost. The ONLY way to generate any significant amount of income and maintain your sanity as a nurse practitioner is by starting a business… If you don’t care about staying sane, then work 80 hours a week picking up shifts and being a work horse…
Remember, no one is impressed with your $80,000 SUV if you are in fact BROKE and have a negative net worth. I am more impressed with the person driving a 15 year old Toyota who has a $1.5 million net worth… That person is in fact wealthy. BEING rich and LOOKING rich are totally different things!
Obtaining a positive net worth should be the goal of every Elite NP out there if you want to be financially independent and truly be wealthy. Now, figure out your net worth and determine how you are going to make that a positive!