Financial Planning - Looking At your numbers

"It takes time to develop, grow and build the life you want. So give your financial planning goals the time they deserve and watch them become reality."-A Wise Man

Congratulations, you’ve now collected and organized all your financial and personal information and place them into one easy to reach location.

Now its time to continue your financial planning by looking at your numbers, this will tell you how much your current life style is costing you, the assets you have accumulated and provide the footing for building the financially free life you want.

To do this, you will need to calculate your current net worth. Calculating your net worth not only gives you an idea of your current financial situation, but it also allows you to organize all your assets and debts in one place as you continue your financial planning.

Your net worth is simply the total value of all your assets minus your total liabilities.

Here are the steps. The worksheets necessary to complete this exercise are just below.

Step 1: Add up your liquid assets

Liquid assets are items that can be converted to cash without losing much or any of its value. Cash is the most liquid asset you can own.These include:

Step 2: Determine the value of your investment assets

These are assets whose value is most likely to increase over time and can sell for cash. These may take some time to sell and can lose some of its value, being resold at current market value. i.e., what someone is willing to pay at the time that you want to sell. There may also be various expenses associated with selling.

Step 5: Calculate your net worth ( Assets - Liabilities = Net worth)

Add up all your assets and deduct your liabilities. Once you've done this, you'll have an idea of your net worth. Usually, this should be a positive number but if it’s not or is extremely low don’t worry about it.

Your answer will tell you where you are starting from today.

Remember, your past is not your future. By taking these steps today, you can use your today to change your tomorrow, which is your future.

Once completed you should save your net worth statement in your financial planning binder.

You will find “Taking Control of Your Money” workbook is a useful resource to help you continue your financial planning.

"I will persist until I succeed. Always will I take another step. If that is of no avail I will take another, and yet another. In truth, one step at a time is not too difficult...I know that small attempts, repeated, will complete any undertaking."

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