Creating Your Net Worth Statement -24

Gather all of your financial records.

Compile your assets. Assets are anything of value that you own. Some
examples of the types of documents you are looking for:
Statements for savings and checking accounts, investment and
securities accounts, 401(k), or IRAs;
Deeds and titles to real estate, vehicles and equipment;
Notes or certificates of paper assets, stock or partnership interests; and
Appraisals of collectibles and other personal property.

Accounts receivable and available lines of credit can also be considered
assets, as long as the entire line of credit balance and the cost of
production for any future accounts receivable are included as liabilities.

Classify your assets into three separate classes: liquid assets, fixed
assets and deferred assets. Fixed assets can be sold, but not easily,
and will often need to be replaced. Deferred assets are ones that you
can’t access immediately such as retirement accounts and business
ownership interests.
Compile your liabilities. Liabilities are any thing that you owe. You’ll be
gathering statements for mortgages, credit cards, school loans, auto
loans, personal loans, other promissory notes payable, and estimated
tax liabilities. Classify these as current liabilities (have to be paid this
year) short-term (paid in a few years) and long-term liabilities.

To calculate your net worth, take the sum of all your assets and
subtract your total liabilities. The resulting figure is your net worth.
Your resulting financial statement will look something like this: See the next post.