Identifying your net worth will not only help you to plan your finances in a better way but also can have a control on your expenses. I am correlating the major assest and liabilities one may have and the formula to calculate the net worth.Using below formula, once can identify his exact net work:
Net worth = (Total Assets – Total Liabilities)
At first, you have to write down the possible assets you have, from the below mentioned group:
A. Cash in hand
1. Savings account balance 2. Fixed deposits 3. Life Insurance 4. Recurring deposits
B. Others
1. Investments 2. Equities 3. Mutual funds 4. Bonds 5. Pension Plan 6. Real estate (not your house)
C. Personal assets
1. Home 2. Vehicle 3. Jewelry 4. Electrical & Electronics 5. Computers 6. Furniture 7. Antiques and collectiblesNow you have to find out the liabilities you have from the below group, it is not limited to:
A. Loan balances
1. Home loan 2. Car loan 3. Education Loan 4. Business Loan 5. Personal loans
B. Your outstanding debt
1. Credit card dues 2. Income tax dues 3. Property tax 4. Term Insurance premium 5. Medical insurance 6. Other debts if you have
C. Others
1. Medical bills 2. Alimony 3. Legal expenses etc..Once you have identified the above, use the formula to calculate your net worth.Once if you find this is the simple method to find your net worth, please comment to me
Click to got to Blog Home