Net Worth vs. Cash Flow Explained (Personal Finance)



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Net Worth and Cash Flow are two very important concepts within the world of personal finance and building wealth. They are also two of the most confused concepts in personal finance. These terms are oftentimes used in conflicting ways that create misleading situations. Sadly, in most cases this is happening from the financial media themselves. I can not proclaim to know their motivation, so I have no idea if they are being misleading on purpose or not; however, that’s besides the point. The point is, you need to understand how Net Worth works and how it is very much different than Cash Flow on a month-to-month basis. In order to form the best opinions on any topic that is using these concepts, it would be wise to understand their differences and how they work, right? That’s why I want to use a news article from the real world so we can stay out of the world of “theory”. You’ll have an exact example of how this author is being a bit misleading in her analysis of a financial situation within real estate. Let me explain to you Net Worth and Cash Flow so you are best prepared to build your own wealth and also understand the financial and economical world around you.

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