Quantifying your net worth is the greatest way to know where you stand financially. It’s also a good tool in monitoring your year-to-year financial progress. Whilst it involves numbers, the calculation is truly easy. It’ll take 10-20 minutes of your time, and all you need can be your financial statement, a list of your assets and the debts you’ve to pay off, some scratch papers and a calculator.
Your net worth is actually the amount that represents the worth of your assets minus your liabilities. The bigger the amount is, the better can be your financial standing. This will help you take immediate measures, to help you save from financial disaster. This simple calculation will even help you make informed decisions in the future, especially in regards to your long-term goals.
Here would be the ways:
List down your assets.
Start with tallying the worth of one’s biggest assets, such as your house, vehicles, and other real-estate properties. Be realistic in assessing your assets; use estimates of present dollar value. Next, list down the worth of one’s cash, bank and mutual fund accounts, and retirement savings, when you have any. It’s also wise to factor your valuable personal items like jewelries, musical instruments, or antique collectibles. Include all personal what’s mc hammer net worth belongings which can be worth $500 or more. Obtain the grand total of all of the figures you’ve listed; the sum represents your total assets.
Tally all your liabilities.
Exactly what you borrowed from, whether short-term or long-term liabilities should be listed down. Begin together with your major outstanding liabilities, such as mortgage balances and car loans. Next, factor in your personal loans such as your bank cards, cash loans, and some other debt you may owe. Sum up all your liabilities.
Subtract your total liabilities from your total assets.
The difference you’ll get once you subtract your liabilities from your assets will undoubtedly be your net worth. Don’t get too disappointed in the event that you come up with an adverse amount. Instead, use your findings to help make the necessary adjustments in your finances and spending habit before you achieve a confident or a higher net worth. Irrespective of how large or small your net worth is, just keep your list because that’s something you can compare against in the future.
Track your progress.
Keep tabs of one’s financial health as a result process a couple of times per year and comparing your present numbers together with your previous net worth. Like that, you can see if you’re making any progress or if your assets are increasing and your liabilities are decreasing.Read More