When it comes to our finances, one significant part of the early stages of planning is understanding your resources and determining your net worth. This is one of the most overlooked steps. People don’t want to see where their trouble spots are in their financial landscape. While it may only be a small piece of your overall financial plan, it is priceless in allowing you to move forward. It also serves as a point of reference for you to refer back to as you move through your journey.
In this episode, I will talk about what your net worth is made up of, and together we will go through the process of how to “calculate” it. I will also highlight some things that can cause challenges in determining your net worth as well as the benefits of discovering where you are today.
Highlights From Episode #03:
- Determining your net worth is a bit like following a recipe – If I don’t have the resources I want, to do the things that I want, then I have to change the recipe.
- What We Own – What We Owe = Net Worth
- Assets and liabilities don’t have to be perfectly matched – ever.
Time-stamped Show Notes:
1:39 – How does a “recipe” translate into understanding net worth?
2:20 – Understanding your assets
3:39 – What are our liabilities?
4:30 – We’ve got our net worth, now what?
5:04 – How does net worth give you clarity?
5:30 – Here’s what can get in the way of the process in determining your net worth.
6:30 – Here’s the good news about understanding our net worth.
7:45 – Why don’t we have to pay off all of our liabilities?
Resources/Tools/Links Mentioned In This Episode:
Determining Your Net Worth