One of the habits you must cultivate to build wealth is to always know your net worth, or your financial condition. Knowledge is power; hence, knowing your net worth gives you the power to make better money decisions.
Your net worth is not your salary or your income. Your net worth is not your savings. Your net worth is not the money you invested in your business. Your net worth is not your house, land, car, etc.

Your net worth is what remains after you deduct what you owe others (debt) from your assets. Your assets are those things that increase in value or that generate income for you. Your net worth is what defines how wealthy you are. Any other thing is camouflage or a mirage.
It is possible to have little or zero net worth and appear to be rich. That is the case with many people, and you should not be one of them.
For example, someone may be earning N5 million per month but have obtained a loan of N100 million to buy cars, a house, furniture and shares, and to fund annual vacation trips out of the country.
To repay the loan, N3 million of his salary is deducted every month. Relatives, friends, neighbours and co-workers consider him rich, but he is not. That is the story of some people who work in high-paying jobs. They acquire more debt than assets and have little or no assets, hence a very low net worth.
Low net worth usually exposes people to the challenges of economic crises, such as the global financial crisis of 2008 and the COVID-19 pandemic.
I have a close acquaintance whom we believed was doing very well financially. He used to work in an oil firm, receiving a huge salary well above the national average. He bought a house in Surulere, Lagos, which had four apartments, with him residing in one of them. He had two new cars (for himself and his wife), as well as some other properties.
However, most of these were financed with loans, resulting in hefty deductions from his salary for loan repayment. Soon after COVID-19, he was among the staff disengaged by the company. Although the company paid him a huge sum of money as compensation for his disengagement, it was not enough to sustain his lifestyle and meet his loan repayments. Moreover, it took him some time to secure another job within the same industry.
Eventually, he had to sell the house in which he lived and other properties and later moved to a rented apartment. (To be continued)