You’re probably familiar with the concept of net worth – it’s what you hear these days because of all the controversies regarding the wealth of our public servants. Don’t fret too much though. You don’t need to be a government employee or super billionaire to calculate your net worth: here’s a simple net worth template that you can use!
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Why should you know your net worth?
Why? I’ll tell you why – here are 5 perfectly valid and good reasons why you should take the extra effort and determine your net worth:
1. It gives you a financial snapshot of your financial condition at this time.
2. Because of your net worth, you can know which specific areas you need to work on – do you have forgotten investments, or worse, forgotten debts? A clear net worth value can help you find these out.
3. A net worth gives you a figurative slap in the cheek: if you owe more than you own, you may be motivated to do some planning and goal-setting first.
4. It can also give you a figurative tap on the back: knowing that you’re aligned with your goals makes you feel good.
5. Some lending institutions also ask for your net worth when you’re applying for a loan so having one is already handy and convenient. (You can just ask a professional to check what you’ve produced.)
What’s the formula to get your net worth?
4. It can also give you a figurative tap on the back: knowing that you’re aligned with your goals makes you feel good.
5. Some lending institutions also ask for your net worth when you’re applying for a loan so having one is already handy and convenient. (You can just ask a professional to check what you’ve produced.)
What’s the formula to get your net worth?
Dude, I’m not asking you to do Integral Calculus or any Organic Chemistry formula right now. You only need to ADD and SUBTRACT numbers! How cool is that?
Net worth = Your Assets – Your Liabilities
If you don’t like computing manually, here’s a simple spreadsheet to get your net worth in only a matter of minutes.
What are your assets? (What you own)
- Total cash (savings account, checking account, time deposit accounts & cash on hand)
- Total investments (your stocks, your bonds, your mutual funds and your UITFs)
- Other important assets (your whole, term or VUL insurance & privately-owned businesses)
- Personal Property (vehicles, jewelry, furniture you own and electronic equipment & gadgets)
- Receivables (money that people owe you)
- Real estate
What are your liabilities? (What you owe)
- Total loans (housing, auto or personal loans)
- Consumer debt (credit card debt)
- Other payables (life insurance payables & money you owe from people)
So, have you computed for your net worth yet? Tell me all about it by commenting below! I’d love to hear from you.
Fired up to manage your money yet? Contact your trusted financial advisor (or me! 🙂 to help you get started.
If you find this post helpful, please SHARE it to your friends. Who knows, they might like it as much as you do. 🙂 Thank you, awesome people!
Live wisely,
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