Improving Your Net Worth

Reitenbach-Kissinger Succcess Institute

Change Your Destiny

Breaking Barriers in Today’s Diverse World and Turbulent Times with Reitenbach-Kissinger Success Institute MKS Master Key System Coaching.

A net worth statement is an important financial document. It is a ‘financial snapshot’ that shows your financial wealth at a given point in time.

A net worth statement provides a useful summary of your financial affairs and can measure your financial well-being.

Quick Facts…

  • A net worth statement is a financial snapshot that shows your financial wealth at a given point in time and provides a useful summary of your financial affairs.
  • Your net worth is the difference between your assets (what you own) minus your debts (what you owe).
  • If you prepare a net worth statement at about the same time each year, you will see how your total net worth changes from year to year. If your net worth has declined from the past year, this may tell you changes are needed for you to live within your income and provide for the future.
  • The total of your liquid assets (assets that can be quickly converted to cash) may provide information about how well prepared you are for a financial emergency or loss of income.

Why should You complete a net worth statement?

A net worth statement is a tool to help you measure progress toward long-term financial goals. You may use one in different ways. It provides an inventory of your assets (what you own) and your liabilities or debts (what you owe).

If you prepare a net worth statement at about the same time each year, you will see how your total net worth changes from year to year. You will want to see if your assets are increasing and your debts are decreasing over time – that is, if you are building wealth.

If your net worth has declined from the past year, this may tell you changes are needed for you to live within your income and provide for the future. Having savings, investments, and debts can make it difficult to know if you are spending more money than you have coming in. A net worth statement can help you see your total financial situation.

The estimate of the value of your home and contents may help you decide how much homeowner’s insurance you need to purchase. The total of your liquid assets (assets that can be quickly converted to cash) may provide information about how well prepared you are for a financial emergency or loss of income.

You may be asked to fill out or provide a net worth statement when you apply for a home or auto loan, or talk to an estate planner.

If your goal is to analyze your retirement savings, you may be interested in the projected future values of your investments. Your financial advisor should be able to help you estimate the value of investments at some time in the future using current values on your net worth statement.

Step 1: Calculate the value of your assets.

List all of your assets (what you own) on the net worth statement worksheet. Use the current market value or today’s dollar value for each item. This is the amount you could sell the asset for today, not what it cost when it was new.

  • The cash value of a whole life insurance policy can be found on a schedule in the policy. It is also available from your insurance agent. The cash value is the amount of money the insurance company would return to you if you terminated the policy.
  • Any bank or other vendor of U.S. Savings Bonds can tell you the current value of your bonds. You can also price them online at www.savingsbonds.com.
  • The daily values of mutual funds, stocks, and bonds are quoted each day in larger newspapers and the Wall Street Journal. Values are also available on quarterly reports. Many
    brokerage firms post share and fund prices on their Web site and are accessible with your personal identification number (PIN).
  • Annuity values are available in annual reports or quarterly statements, or from your broker or Net Worth Statements insurance agent. Human resource officers at places of employment should be able to tell you the amount you have contributed to your pension, 401(k), 403(b), or 457 plan(s).
  • Car values are published by the National Automobile Dealers Association and by Kelly Blue Book. These publications are available in most libraries, at car dealerships, and at lending institutions. You can also find sites on the Internet that list auto values.
  • Estimate the value of household furnishings and appliances by using information from second-hand shops and from classified ads. Use conservative estimates because it is not always easy to sell used possessions.
  • The value of collections, jewelry, furs, and guns can be estimated by dealers.

Step 2: Calculate your liabilities.

List all of your debts or liabilities (what you owe) on the net worth statement worksheet. Use the most up-to-date amounts.

  • The balance owed on installment debts or credit cards is listed on monthly statements. If not, the balance can be obtained from the creditor. The principal owed on a mortgage or real estate loan is available from the mortgage lender. Remember to also list second mortgages or home equity credit line loans.

Step 3. Subtract the value of your liabilities from the value of your assets to determine your net worth.

Step 4. Monitor your net worth annually.

Complete another net worth statement worksheet in about one year and compare the two statements. Completing one each year at about the same time will help you monitor your financial well-being.

If you are comparing yourself to recommended financial benchmarks, consider one suggestion from the book, The Millionaire Next Door. Authors Stanley and Danko (1996) suggest that your net worth should be the figure that results when you multiply your age times your gross income (from all sources) and divide by ten. For example, a 40-year-old with $40,000 in gross annual income should have a net worth of $160,000.

40 X $40,000 = $1,600,000 ÷ 10 = $160,000

Net Worth Statement Worksheet

Personal Property: (Current Value)

Assets (What You Own)Liabilities (What You Owe)
Cash:Current Debts:
     Cash On Hand     Household
     Checking Accounts     Medical or Other Current Bills
     Savings Accounts     Credit Cards
     Money Market Funds     Department Store/Gas Cards
     Cash Value of Life Insurance     Loan on Cash Value Life Insurance
     Other     Legal
     Taxes Due or Back Taxes
     Other
Real Estate/Property:Mortgages:
     Home(s)     Home(s)
     Land     Land
     Other     Other
Investments: (Current Value)Loans:
     Certificates of Deposit (CDs)     Bank/Finance Company
     Savings Bonds     Bank/Finance Company
     Stocks     Education/Student Loan(s)
     Municipal Bonds
     Corporate Bonds
     Government Securities
     Mutual Funds
     Annuities
     IRAs, Roth IRAs
     401(k), 403(b), 457 Plans
     Pension Plan(s)
     Ownership in Business     Business Loans
     Loans Owed to You     Personal (from family or friends)
     Other
     Automobile(s)     Automobile Loan(s)
     Recreational Vehicle/Boat     Recreational Vehicle/Boat Loan
     Household Furnishings     Pledges: Charities, Religious
     Appliances/Furniture
     Collectables     Other
     Jewelry/Furs/Guns     Other
     Other     Other
Total AssetsTotal Liabilities

Total Assets $__________ – Total Liabilities $__________ = Net Worth $ __________

NET WORTH QUESTIONS AND ANSWERS

How do you create a net worth statement?

  • Do list property that belongs to either you or your spouse (or both of you).
  • Do spend the time gathering receipts and any records you may have reflecting what you paid and when.
  • Don’t worry if you are missing information or if you have trouble placing a value on something,as long as you list it.

How to prepare a net worth statement?

  • Preparing a Net Worth Statement. It’s easiest to prepare a net worth statement using a form. …
  • Assets. Cash and cash equivalents List cash on hand and cash equivalents,items that can be converted quickly into cash.
  • Liabilities. List past-due bills and loan balances –the amounts you still owe on the loans. …
  • Using the Net Worth Statement. …

How to calculate your net worth statement?

  • Cash and Liquid Assets. These are things that are either cash or can easily and quickly converted into cash or it’s equivalent.
  • Marketable Assets. This is where you would have your investments,bonds,stocks,rental properties and such things. …
  • Long-Term Assets. …
  • Personal Assets. …

http://www.schwabmoneywise.com

How to create a net worth statement?

  • How to Create a Net Worth Statement. Start with a master account list. The first thing you need to create your net worth statement is an accurate list of all your financial accounts and how much money is associated with each account. Hopefully you have a master account list, which will help you know where your money is located and how to access it.

REVIEW THIS FOR GENERAL NET WORTH INFORMATION

Schwab MoneyWise | Your Personal Net Worth

Net Worth Statement: The Complete Guide [2022] (themillennialmoneywoman.com)

Net Worth Calculator

Your net worth is the value of all of your assets, minus the total of all of your liabilities. Put another way, it is what you own minus what you owe. If you owe more than you own, you have a negative net worth. If you own more than you owe you will have a positive net worth. This calculator helps you determine your net worth and estimates how it could grow (or shrink) over the next ten years. By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

Your current net worth is $_______________________

-20%

20%

60%

100%

Annual liability growth:*Enter an amount between -20% and 100%?

-20%

20%

60%

100%

Your assets:

$ _____________________________

Your liabilities:

Your liabilities:$ ___________________________________________________

Projected net worth by year for 10 years

Projected net worth by year for 10 years. $ ____________________________________

Your current net worth is $ _____________________________________

Definitions

Annual asset growth: Average annual rate you expect your assets to increase (or decrease if negative) in value.

Annual liability growth: Average annual rate you expect your liabilities to increase (or decrease if negative) in value.

Home  Yes: _____  No: _____

Current value of your home. This should be as close as possible to the actual market value of your home. If you have owned your home for a number of years, the current market value could be significantly higher than your original purchase price.  $ ____________________________

Other real estate Yes: _____  No: _____

The value of any other real estate you may own. Include second homes, undeveloped land, rental property or any commercial buildings you may have an interest in. As with your home, use the actual market value of this real estate.  $ ____________________________

Automobiles Yes: _____  No: _____

This is the total value of all automobiles that you own. Do not include any leased vehicles.  $ ____________________________

Other vehicles Yes: _____  No: _____

If you own any other vehicles, such as RVs, campers or collectibles, enter them here. $ ____________________________

Jewelry Yes: _____  No: _____

The value of any jewelry, gems or precious metals such as gold. If you have owned these items for a number of years they may have appreciated in price, so remember to use the current market value. $ ____________________________

Household items Yes: _____  No: _____

The value of your household goods and items. This would include items such as furniture, home electronics, silverware, etc. $ ____________________________

Retirement accounts Yes: _____  No: _____

The current total balance of your retirement accounts. This should include IRAs, 401(k) savings, SEP IRAs, variable annuities and any other retirement savings you may have. $ ____________________________

Bonds Yes: _____  No: _____

If you own any Treasury, municipal or commercial bonds, that are not part of your retirement accounts, enter the total here. $ ____________________________

Stocks Yes: _____  No: _____

If you own any individual stocks, that are not part of your retirement accounts, enter the total here. $ ____________________________

Mutual funds Yes: _____  No: _____

If you own any mutual funds, that are not part of your retirement accounts, enter the total here. $ ____________________________

Cash value of life insurance Yes: _____  No: _____

Some life insurance has a cash value. This is true for whole life and universal life policies. Term life policies, on the other hand, have no cash value. If you have life insurance with a cash value, enter the total here. Remember, this should be the cash value of the policy, not the amount paid out if you were to collect on the policy. $ ____________________________

Savings bonds Yes: _____  No: _____

If you own any savings bonds enter the total here. $ ____________________________

Checking and savings Yes: _____  No: _____

The current total balance of your checking and savings accounts. $ ____________________________

Cash Yes: _____  No: _____

If you have any other cash, enter the total here. $ ____________________________

Other Yes: _____  No: _____

If you have any other assets of value, you can enter the total here. $ ____________________________

Home mortgage principal Yes: _____  No: _____

This is the current principal balance remaining on your mortgage. This is the amount that you would have to pay to own your home free and clear. $ ____________________________

Other mortgage principal Yes: _____  No: _____

This is the current principal balance for any other real estate mortgages you may have. This includes mortgages on rental property, undeveloped land, commercial property or any other real estate. $ ____________________________

Auto loans Yes: _____  No: _____

Total amount you currently have outstanding on your auto loans. $ ____________________________

Student loans Yes: _____  No: _____

Total amount, if any, that you currently owe in college or student loans. You should enter the total outstanding even if these loans are currently in deferment. $ ____________________________

Credit card debt Yes: _____  No: _____

Your total credit card debt. $ ____________________________

Other loans Yes: _____  No: _____

Total amount, if any, of any other loans you may have. $ ____________________________

COMPLETE YOU NET WORTH STATEMENT

Net Worth Statement Worksheet

Personal Property: (Current Value)

Assets (What You Own)Liabilities (What You Owe)
Cash:Current Debts:
     Cash On Hand     Household
     Checking Accounts     Medical or Other Current Bills
     Savings Accounts     Credit Cards
     Money Market Funds     Department Store/Gas Cards
     Cash Value of Life Insurance     Loan on Cash Value Life Insurance
     Other     Legal
     Taxes Due or Back Taxes
     Other
Real Estate/Property:Mortgages:
     Home(s)     Home(s)
     Land     Land
     Other     Other
Investments: (Current Value)Loans:
     Certificates of Deposit (CDs)     Bank/Finance Company
     Savings Bonds     Bank/Finance Company
     Stocks     Education/Student Loan(s)
     Municipal Bonds
     Corporate Bonds
     Government Securities
     Mutual Funds
     Annuities
     IRAs, Roth IRAs
     401(k), 403(b), 457 Plans
     Pension Plan(s)
     Ownership in Business     Business Loans
     Loans Owed to You     Personal (from family or friends)
     Other
     Automobile(s)     Automobile Loan(s)
     Recreational Vehicle/Boat     Recreational Vehicle/Boat Loan
     Household Furnishings     Pledges: Charities, Religious
     Appliances/Furniture
     Collectables     Other
     Jewelry/Furs/Guns     Other
     Other     Other
Total AssetsTotal Liabilities

Total Assets $__________ – Total Liabilities $__________ = Net Worth $ __________

Do you Know Anyone Who Needs MKS Master Key System Coaching or Consulting Services?

Join us to get started to make this your best year ever to build a life, career, business, or financial assets in just a few days with our signature, expert, proven world-class systems and see your dreams become a reality!

Start thinking in abundance. Start working to become the person who’ll achieve the big goal(s) you promised yourself.

And then imagine how your future self will look back a year from now and think, “This was my best year ever!” 

Thank you for your referrals.

CONTACT US: [LIFE SUCCESS ASSESSMENT] [READINESS ASSESSMENT] [SERVICES] [ABOUT COACHES]  [FAQs] [FEE RANGE] [COACHING AGREEMENT] [SURVEY] [PRESS RELEASE] Home

Web: https://mksmasterkeycoaching.com

Terms of Use | Testimonials and Results Disclosure | Privacy Policy

© Copyright 2021 –Reitenbach-Kissinger Success Institute – All Rights Reserved

Web: mksmasterkeycoaching.com