What is included when calculating the net wealth of an individual?

Net wealth encompasses a broader view of an individual's financial situation than just a simple subtraction of assets from liabilities. The net wealth calculation is intended to provide a comprehensive picture of an individual's financial standing, including both tangible and intangible assets.

When considering net wealth, it is essential to include human capital, which refers to an individual's potential earning ability and skills that contribute to future income. This can be significant in assessing someone's overall financial health. Additionally, future pension benefits are also included because they represent future cash flow that can be relied upon to support one's lifestyle after retirement.

Investment assets represent the financial resources that an individual can draw upon, whether in the form of stocks, bonds, or real estate. These assets, combined with human capital and anticipated pension benefits, provide a complete picture of net worth when liabilities (such as debts or loans) are subtracted.

Other options focus on more limited perspectives. For example, simply calculating assets minus liabilities disregards important components such as human capital and future benefits that significantly affect an individual’s financial health. Likewise, options emphasizing only current cash flow, savings, or liquid assets do not capture all the potentially valuable resources within an individual's net wealth. Thus, the comprehensive approach outlined in the correct answer gives a more accurate representation of net