Calculating and knowing your net worth is one of the most important decisions to anyone’s financial well being. It is the bedrock of knowing your current financial status.
Your net worth is adding up everything you own and subtracting everything you owe to determine your financial worth. Another way of looking at this is if you sold everything you own and paid all your debts, whatever you have left over in cash is your net worth. This is a snap shot of your current financial health as of the day it is calculated. The NY Fed recently indicated that 15% of all American households have a negative net worth. 34% of US adults have no savings at all while 69% have less than $1,000 in savings.
In everyday practice, one of the biggest benefit of calculating and tracking your net worth is to see how solid your financial decisions are. Good financial decisions, tend to increase your net worth over time while bad financial decisions tend to drop your net worth. The following items will usually cause your net worth to go up…good investments, retirement and other savings, acquiring appreciating assets, etc. while the following actions will cause your net worth to go down, indiscriminate shopping, buying depreciating assets, bad investments etc.
In almost every case, things that get measured and tracked gets improved on. Measuring and tracking your net worth on a monthly basis is very critical to the overall health of your financial future. Oftentimes, people drift when they don’t measure their net worth regularly. You might think you are doing well, because you earn a decent salary and are typically frugal with your spending but not until you actually start calculating and tracking your net worth before you can really determine how well you are doing and how the trend is going.
www.mint.com or the mint app is a very easy and seamless way to calculate your net worth.
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At your service,
Victor Lofinmakin
“Obsessed with Service”
2016 Top 20 Under 40 Realtor
President
Fairdale Realty
Gazette Mortgage, NMLS 1177538
832-788-1782
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