STARTING A BUSINESS NOW

Calculate Your Worth Most people dream of financial independence, but financial independence is always something that happens in the future for them. This type of thinking is easily identified by phrases that start with, “Someday I’ll…” If you are guilty of this type of thinking, it is time that you start living in the here and now.

While it is not a crime to dream about the future, you need to have a solid understanding of where you stand today and what it will take to make your dream future become a reality. The first step in determining how financially sound you are and how much work it will take to become financially independent is to create a net worth statement.

A net-worth statement will show you how much money you are worth currently. One of the easiest ways to create a net-worth worksheet is to download a free worksheet online. You can easily find such a worksheet using a simple keyword search and your favorite search engine.

Of course, you don’t necessarily have to use a worksheet. If you can remember all of your assets and information without the aid of a worksheet, by all means do so. The first part of the worksheet refers to all of your assets.

Here you will enter anything that you own that has value including checking account balances, savings balances, money market accounts, certificates of deposit, treasury bills, cash value of all insurance, investments, retirement funds, real estate owned, vehicles owned, furnishings, fine jewelry, collectibles and anything else of value.

Always record the fair market value of these items, not the amount that you paid for them. If you still owe money, record the amount that the property is worth. We will deduct debt in the next section. Next, list all of the money that you owe including money owed for loans, mortgages, alimony, child support, income tax liability, credit cards, personal debt, etc.

Do not enter utility payments here or other payments that fluctuate with time or can be canceled such as cable and/or internet service. This section is for debt and credit payments only. Now, it is time to see what you are made of.

To calculate your net worth, simply subtract the total sum of your liabilities from the total sum of your assets. If your number is a positive number, you are doing something right. If your net worth is in the negative, you need to make some changes to secure a financially independent future.

If your net worth is paltry or in the negative, do not fret. It is more important to face your financial situation head on than it is to show a positive net worth at this point. Before you can make any changes for the better, you need to know where you stand.

So, you have taken the first step toward a better tomorrow. To make sure that you stay on track, recalculate your net worth annually.