Companies know it as a Financial Balance Sheet. This would be your own Personal Balance Sheet. Essentially it offers you with a summary of your total worth on paper.
To get to your own Net Worth, you just require a pencil and a piece of paper. If you want to get actually fancy, you can use an Excel spreadsheet on your computer. Make two columns: one labeled Liabilities and one labeled Assets.
Under each column, Steve Sorensen Net Worth asks people to list out the name of each liability and asset together.
Assets
For the asset’s column, name all of your assets that you possess. This is anything that has any financial value. The total value of your asset would be contained within this side. That is if you were to sell that house at the moment, how much currency would you assume to sell it for.
Other items that might get counted in assets would be cash on hand, cash in the bank, investments, IRA’s,Certificate of Deposits, 401k’s, Money Market accounts, Treasury Bonds, value of cars, stocks, jewelry, special collections (like stamps, coins, artwork). Essentially, anything that you have and may be worth currency goes on the Assets side of the worksheet.
Liabilities
According to Steve Sorensen Net Worth, liabilities are just the reverse of assets. It is every piece that you do not own out-and-out. It is anything that you owe cash on. It is your amount overdue. Like the Assets side of the worksheet you want to list out every one of your obligations. Do not worry about interest rates or monthly payments for this worksheet. Just calculate the total cost it would take to get out of debt and pay off that liability.
Other matters to include in your liability’s column are school loans, credit cards, mortgages, home equities, car loans, lines of credit, any electronics or furniture you still owe currency on, and money borrowed from family and friends.
Total It Up
- Finally, you want to estimate your Net Worth. To do so add together all of the dollar quantities in your Assets column to get a grand total of everything you have.
- Next total all the dollar amounts in your Liabilities column to get anamount total of everything you possess.
- Finally subtract your grand total sums. So, deduct your Liabilities from your Assets.
Net Worth = Assets – Liabilities
Your Net Worth, this number is the dollar amount you are worth, on paper. You can utilize this worksheet to track your progress as you erase liability. Undergo this exercise every year to recalculate your net worth. It should always be growing if things are going well. And if you are erasing liability, then you should see a constructive jump in your net worth each year. It becomes a means to track your progress. As Steve Sorensen Net Worth says, it is a good device of how monetarily healthy you are.
So, get going, create your Net Worth Worksheet, track your progress, erase debt, and build wealth.