
Know What You Are Worth Today to Map Out Your Financial Future
It does not matter how much money you have today; you still must know the details of what you are worth. Understanding your financial situation can help you develop a retirement plan, pay down debt, draft a comprehensive estate plan and live with financial independence. To figure out your net worth, you should calculate the amount by which your assets (what you own) exceed your liabilities (what you owe). If your assets are greater than your liabilities, you have a positive net worth and vice versa. Doing this can provide you with valuable insight into what you can do to continue the plan toward financial confidence, or maybe it is an eye-opener to overspending. This knowledge may allow you to see where you can adjust toward more beneficial financial decision-making. What are assets? Assets include real estate, bank accounts, investment instruments, retirement funds, brokerage accounts, and personal items like your car, boat, airplane, jewelry, or other collectibles. Remember to include those intangible assets you might own, like patents, intellectual property, trademarks, etc. What are liabilities? Liabilities include mortgages, credit card debt, student loans, medical bills, personal loans, settlements against you in court, etc. This may also include money you might owe to someone or an organization. Because we have so many different assets of varying values, assigning accurate values to your assets can become difficult. It is essential not to inflate your net worth, thus making it more challenging to prepare a strategy that you will be able to follow. One way to determine the value of what you own is by comparing your assets to similar assets in your area that are for sale or that have been recently