Pros, Steps in Knowing Your Net Worth

Credit: Pixabay

MJ Gonzales │

Calculating your net income from your day job is easy as your pay slips would indicate your base salary and total compensation. But what if you have other sources of income and assets? Isn’t good to know your net worth today so you can maintain or improve it as soon as you can? Who knows you can join in the ranks of Bill Gates, Carlo Slim and Warren Buffet because of your accumulated asset overtime.

According to Investopedia, “Your net worth is the amount by which your assets exceed your liabilities. In simple terms, net worth is the difference between what you own and what you owe. If your assets exceed your liabilities, you have a positive net worth.”

The financial education platform also shared knowing your net will give you a glimpse of your financial health and can help you to assess how to achieve your financial stability. Apart from this, Huffington reported that your net worth assessment will let you know you liabilities and if your asset is not diversified.

“When you add up all your assets and a large percentage is in for example large cap stocks, real estate or a hoard of cash then that’s a signal you’re not as diversified as you thought. Those are just examples of assets but you get the idea,” David A. Dedman shared on Huffington.

Credit: Pixabay
Credit: Pixabay

Dedman also imparted that knowing your net worth doesn’t need software, even simple pen and note pad are enough. However if you like a little detailed steps, Time suggested to add all your assets like your bank accounts ( checking or savings), brokerage, and retirement accounts, and cash values of your home, items inside of it and car.  On the liabilities side, they shared that you have to check your loans (home or car), credit card balance, and other debts.

Though the formula is simple as assets + liabilities = net worth, you can also try to the net worth calculators available on different sites like offers.