In financial planning, net worth is one of the most commonly used benchmarks. If we are overweight, we try to lose some by eating better or exercising more. In the area of health and fitness, we use weight as a benchmark. In the process of financial or retirement planning, it is especially important to have a measuring stick. Personallym I don’t use online calculators to calculate my net worth so if anyone wants to share a tool they use and find helpful, please share in the comments. Take this template and personalize it to your assets and liabilities.Įxcel spreadsheet to track net worth (11025 downloads)įor those of you that prefer links to online calculators, try this one from TaxTips.ca – My net worth spreadsheet is personalized for my needs and I would encourage you to do the same for yourself. Incidentally, this is the spreadsheet I’ve been using for years (the long term tab). There’s nothing fancy about these worksheets but that’s really the point. It’s designed to be the best or the worst but a great starting point. Here’s a link to a net worth statement I give out to people who attend my financial workshops or want to come see me for financial help. In my opinion, use the one that works best for you. There is no shortage of tools and resources out there to help you figure out your worth. Understanding your net worth is the starting point to financial planning and wealth management. Once you have this starting point, every year, you should redo this calculation to see if you are moving in the right direction. At the bottom of the page, take your total assets and subtract your total liabilities and you will have your net worth. On the other side of the page, list all your debts or liabilities. On the left side of the page write down all the assets that you think contribute positively to your financial well-being (not depreciating assets). Take a piece of paper and draw a line down the middle of the page from top to bottom. How to calculate your worth?ĭown below, I will give you a list of tools and resources to help you figure out your net worth but really all you need is a pen and paper. Creating a net worth statement is a basic skill you should know and practice regularly. I equate knowing your net worth for wealth management to knowing your weight for weight management. How can you know if you are getting ahead financially if you have no way to track or measure your wealth? If you want to have a benchmark for wealth, retirement or financial fitness, make sure your starting point is your net worth. Knowing your net wort h is a very important aspect of personal finance. In my mind, your financial net worth is slightly different than your total net worth because you only want to consider assets that may be used as a retirement asset or truly relevant to your financial wealth. For example, is your $1,000 big screen TV considered an asset? More importantly, should it be used to calculate your overall net worth?įor the purpose of retirement planning and wealth planning, I would argue that you should not consider the TV as part of your financial net worth. It can be complicated depending on what you define as an asset and what you consider a liability. Your net worth is equal to all of your assets less all of your liabilities. The definition of net worth is very simple.
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