Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.
Your Networth is important to know where you stand. It is like looking at a mirror. Do you know how much you are worth today ?
We think we know in our minds….that’s what we feel. But actually when we put pen to paper we realise that there are lot of loose gaps which we don’t account for.
1st what is Net Worth ?
The amount by which assets exceed liabilities.
Net worth is a concept applicable to individuals and businesses as a key measure of how much an entity is worth..
A consistent increase in net worth indicates good financial health; conversely, net worth may be depleted by decrease in asset values relative to liabilities.
Hence, for an individual what is he or she worth on any given day in relation to the assets he / she possesses….
Net worth = Assets – Liabilities
The aim is to have a positive and an increasing networth year on year.
It is an important financial tool to aid you to keep a check on your finances.
It helps to review your financial status in a snapshot. It also tells you what are the areas in which some investments maybe heavily concentrated and some may require re-alignment.
The format is as under which you can use for ready reference or you can make yours as per your requirement :
|Review your Networth|
|Personal Items||Previous Period||Current Period||Loan Balances||Previous Period||Current Period|
|Artwork||Credit Card Dues|
|Cash or Cash Equivalent|
|Mutual Funds – liquid|
|Insurance (non term)|
|Bank Fixed Deposits|
|Bonds / Debentures|
|Real estate other than self occupied home|
|Public Provident Fund|
|Employee Provident Fund|
|Super Annuation fund|
|Assets Total||Liabilities Total|
|Net Worth: Previous Period||0|
|Net Worth: Current Period||0|
If you use this template and fill in actual figures, and keep tracking it on a periodic basis, then you would get to know your Networth. Is your Networth going up or down ?
So please find out your Net Worth …..and post it back if you like more feedback on this matter…
Cheers till next time…..