Before You Plan Your Finances, Do This First!

Determining your Financial Net Worth is the first step in personal finance because it gives you a clear picture of where you stand financially. It helps you understand your assets, liabilities and overall financial health, allowing you to make informed decisions about saving, investing, and debt management.

Question:
Is the house you live in an asset or a liability?

Answer:
Many people buy a house believing they are both securing a home and making an investment. But is that really the case? This belief comes from the idea that property values tend to appreciate over time. However, what many fail to consider are the costs involved—mortgage interest, inflation, maintenance, taxes, and insurance—all of which significantly impact the actual return on investment.

The bigger issue arises when people stretch their finances to buy homes they can’t truly afford, thinking they are making a smart investment. In reality, they end up burdened with high costs and miss out on better investment opportunities. Even if the house gains value, that appreciation is only realized when sold—a process that isn’t always quick or easy. And once sold, they face another challenge: finding a new place to live.

This is why the house you live in should not be considered an asset but a liability, as it continuously takes money out of your pocket rather than generating income.

Want to know the truth behind the 'Sweet Lie of Property Investment?' Click the link to my blog and uncover the pitfalls of buying properties beyond your financial capacity: https://shorturl.at/7lOIJ

Now coming back to the computation of Financial Net Worth,
to estimate your Financial Net Worth, you need to list down:
✔ Assets – What you own (cash, investments, property, etc.)
❌ Liabilities – What you owe (loans, debts, mortgages, etc.)

This simple exercise helps you understand your financial standing and prepares you for the next step—Cash Flow Analysis, where we compare Income vs Expenses.

Can you identify which of your possessions are assets and which are liabilities? Drop your thoughts in the comments!

Thanks for watching! If you found this video helpful, here are some of the financial tools and platforms I personally use to manage my money, invest, and grow my wealth. These have made a big difference in my financial journey, and I hope they can help you too!

I have already verified if they are registered with Securities Commission (SC) of Malaysia, a regulating body for Malaysian capital market.

1. Moomoo (Investing Made Easy)
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4. Luno (Cryptocurrency)
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These tools have helped me take control of my finances, and I highly recommend them to anyone looking to save, invest, or manage their money better. If you’re ready to start, click the links above to sign up and enjoy exclusive bonuses or discounts!
Disclaimer:
Some of the links in this description are affiliate links, which means I may earn a small commission if you sign up or make a purchase through them. This comes at no extra cost to you and helps support the channel. Thank you for your support!

The information in this video is provided for informational and educational purposes only and should not be considered as financial advice. Viewers are encouraged to consult a qualified financial advisor to evaluate their personal financial situation before making any investment of financial decisions.
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Видео Before You Plan Your Finances, Do This First! канала Money Moves Malaysia