Calculating Your Net Worth
There is one financial goal you should work toward in 2016. That goal is to increase your Net Worth.
To find out your Net Worth you need to know the total of your assets, and the total of your liabilities.
Assets include things like your home, other real estate, cars, bank accounts and stocks. Basically anything that can be sold for cash.
Liabilities are your debts, things you own money on like mortgages, auto loans and credit cards.
Make a list of all of your assets and a list of all your liabilities.
Now subtract your assets from your liabilities to get your Net Worth.
You maybe in a situation where you have a negative Net Worth. If that is the case, don’t panic. Just know it’s time to set up a plan of attack.
If you have a positive Net Worth, congratulations! Now the goal is to increase it in 2016.
There are two simple ways to build your net worth.
1) Increase your assets.
2) Decrease your debt.
That means you should keep investing in assets and pay down your debt.
Your goal for 2016 should be to have a bigger Net Worth than you have right now.
I suggest you do this exercise every six months. So you are always aware of your Net Worth, and are always aware of the two steps above.