Answer: Their home

Questions:

• Define net worth in your own words.  
• Is a home an investment? Why or why not? 
• Given that most people take out a home loan (a.k.a. a mortgage), how would you calculate whether a home is an asset or a liability? 
• What are two observations you have about how the assets a person owns changes as their net worth increases? 

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (from Visual Capitalist):

A person’s wealth can be made up of many different assets. Net worth, the measure we use to gauge wealth, is actually the sum of all of a person’s assets after subtracting liabilities (such as loans). Therefore, net worth can be comprised of liquid savings, stocks, mutual funds, bonds, real estate, vehicles, retirement accounts (IRAs, pensions), and many other types of assets.

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Want to teach students about the math behind mortgages? This NGPF Activity will help: Calculate: Your Mortgage

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.