February 5, 2015

Creating a yearly Net Worth Statement accomplishes a few things. What are they?

3 thoughts on “February 5, 2015”

  1. Garrett Haag says:

    If you create a yearly net worth statement you get to see how well off you are right now. You want to keep track of how much you owe and have at any time. You need to make sure your liabilities dont get to high. This also lets you see how you are doing compared to last year at about the same time. You can see if your doing better or staying the same or falling behind. You want to try and always grow on your net worth to try towards financial freedom. You will be able to see where you hold most of your net worth with one of these. You want to see if you own alot of stuff or if you own things that will become more valuable over time like stocks.

  2. Elizabeth Barske says:

    Creating a yearly net worth statement allows you to see the difference between what you own and what you owe. (If your net worth is negative, it means you owe more than you own. If it is positive, you own more than you owe.) Completing a net worth statement yearly also lets you see how you stand financially for that year as well as lets you compare how you are standing now compared to previous years.

    Ideally, you would want to grow your net worth every year by paying down your debts and investing as much as you can in appreciating assets. However, depending on where you are at in your life (ex: college student paying off their student loans, buying your first home, etc.), your net worth will fluctuate. Completing a net worth statement every year will help you to keep track of your progress in paying down these sorts of debts, give you an idea of how to get where you want to go financially, and give you a ‘wake-up call’ if you are not on track with your financial goals.

  3. Mike Finley says:

    Well said, and welcome to the discussion board Elizabeth. Let’s recap.

    (1) A Net Worth Statement provides you a clear snapshot of where you are financially.

    (2) It stops you from using other measures like stuff and income levels to gauge your financial status. Those measures are useless.

    (3) It shows you where you are, and where you might be heading.

    (4) It guides you toward understanding how to increase wealth (buy low cost appreciating assets and pay down debt).

    (5) It provides a sense of knowing. This will develop over time into self-empowerment as you learn, I AM THE ANSWER!

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