Net Worth

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Do you know how much your estate is worth?

To start a comprehensive plan, one must pinpoint their exact position today. Determining your net worth allows you to visualize your potential financial opportunities today, identify your current shortfalls, mark your overall progress, measure your ability to attain additional credit, and much more.

Net Worth is calculated by subtracting your total liabilities from your total assets. Why is this important?

By calculating your net worth you will be able to start your plan knowing which direction(s) you are able to take. A higher net worth could present more opportunities Calculating your net worth gives you an unbiased bird’s eye view of your current financial situation. As well, you can follow your progress in time by comparing your net worth to past net worth statements.



Part #1 – Determine Total Assets

Assets are broken down into two categories:

1) Short-term Assets 2) Long-Term Assets

Short-term Assets are financial products or items that you can easily convert into cash, has a set face value that isn’t locked in, and/or has a maturity of less than 5 years (GICs, T-Bills)

Long-term Assets are financial products or items that have a long-term purpose (home, car, retirement savings), and they also take longer to convert to cash than short-term assets.

Liquid Assets

Liquid Assets are accounts or amounts of cash that you can easily access instantly. Usually Liquid Assets are used in your everyday purchases and transactions.

Such methods of using liquid cash is using your checking account with a debit card, using cash you physically have on you from your ATM or stored at home, etc. Rarely is liquid cash used for long-term savings needs.

Total:

Short Term Investments

Short-term Investments are a little more time consuming to cash out than liquid assets.

Some financial products might be locked in until a date in the near future. Where it is long enough for it not to be accessible instantly, but short enough for it not to be classified as a Long-Term Savings Account. Some financial products could charge a fee or penalty for withdrawing from these products before their maturity dates,

Total:

Long Term Investments

Products within this category are financial vehicles that help you achieve your long-term goals (i.e. retirement, future business ventures, etc.)

Long-term Investments are usually tax-deferred or tax sheltered products that will grow over time. Growth consists of the rate of return on the amount currently invested plus the additional payments paid over time.

The sooner one contributes to these accounts the more attainable one’s long term goals are.

Total:

Miscellaneous Assets

Much like Personal Assets, Miscellaneous Assets have the ability to grow equity.

Miscellaneous Assets might be more difficult to convert to cash as well as assess a direct market value.

Most products that fall into this category are usually sophisticated items that have a series of legal documents and attract niche consumers.

Total:

Personal Assets

Personal Assets are tangible assets that have significant value but should not be solely used as long-term savings.

The benefit of owning personal assets aside from potential buyer satisfaction is the ability to grow equity as you pay off the loans used to purchases these assets. Assuming the market value does not decrease quicker than the payments made on the loans.

Personal Assets can be used as collateral to attain credit to purchase other assets Investments, other properties, business opportunities, etc.

Total:

Calculated Asset Totals

complete the required portions of the form to have your totals calculated


Total Liquid Assets:


Total Short Term Assets:


Total Long Term Assets:


Total Misc. Assets:


Total Personal Assets:



Part #2 – Determine Total Liabilities

Liabilities much like assets are broken down into two categories:

1) Short-term Liabilities 2) Long-Term Liabilities

Short term liabilities can range from personal debts to any form of consumer credit (credit cards, lines of credit, even outstanding bills).

Long term liabilities are usually tied to the purchase of an asset (mortgage, auto loan, etc.) and there are usually set monthly payments which are to be paid over a longer period of time (5+ years)

Short-Term Debt a.k.a Everyday Debt

No matter what you call it, Short-Term Debt or Everyday Debt; most accounts that fall under this category is BAD DEBT.

Short-term debt is usually created when an individual does not have liquid assets to purchase the produce/service they require. As well most products that fall into this category can charge anywhere from 6%-33% in interest Ideally one should not use credit cards rather cover their unexpected expenses with a side account/ emergency account (to be discussed later on).

Total:

Long Term Debts

Long-term loans almost always are tied to the financing of long-term assets or used to consolidate other debts. Leveraging your assets to pay other debts is a very dangerous transaction and may not be the best approach to pay down your debts.

Equity grows substantially when individuals make additional payments to their long-term debts which separates the gap between the market value of the asset and the debt used to finance the asset.

Total:

Calculated Debt Totals

complete the required portions of the form to have your totals calculated


Total Short Term Debt:


Total Long Term Debt:



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