Saturday, October 14, 2006

Calculating your net worth

How to calculate your net worth

Everyday people rush off to work, take care of the kids, save for retirement, save for rainy days, and so on. The question that a lot of people have is are they getting ahead? During their life in the rat race are they actually making progress in accomplishing their goals? After all if your savings and investments are growing but so are your debts are you really getting ahead? Can you reach retirment debt free. The answer comes in calculating your personal net worth on a regular basis, I would say you should do this at least one per year.

What is the definition of net worth: Net worth is the difference between your assets and your liabilities. Asset are things like cash, mutual funds, house equity, stocks, et. Liabilities are things like home mortgages, car loans, credit card debts, etc.

So now that you have calculated your net worth the big question is do you have a positive or negative net worth? If it is positive congratulations you are on your way, set a goal to increase your net worth by a certain amount for next year's net work and work toward making it happen. If it is negative you might be just starting out in your career or you may have poor spending habits. Either way if it is negative you need to make some adjustment in your life so you can pull up the savings and hold back on the spending.

Resources:
CNN has an online network calculator that is worth a look.
Check out the networth calculator for Microsoft Excel.

Final thought do me a favor. If you enjoyed this post or any of my other posts why not subscribe to my Strategies for Life Blog? Again it is free, free is good right? Just click here.

Tags: investing, retirement, get rich, mortgages, making money online

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