Net Worth Statement
"If you want to create wealth, it is imperative that you believe that you are at the steering wheel of life, especially your financial life."
-T. Harv Eker, author of Secrets of the Millionaire Mind
Reading the above quote from T. Harv Eker reminds me of the importance of tracking your net worth so that you know where you're heading financially speaking. If you want to be at the steering wheel of your financial life, you have to know where you stand today, and what you need to do to achieve your goals tomorrow. That's what a Net Worth Statement allows you to do.
A Net Worth Statement is an important part of your overall financial health, and it's essentially a list of everything you own, everything you owe, and what you are currently worth. I prepare my Net Worth Statement on a quarterly basis. I recommend that you prepare a New Worth Statement on a semi-annual basis, or on a annual basis, at the very minimum.
How Do You Calculate Your Net Worth Statement
Here is how you calculate your New Worth Statement:
Assets - Liabilities = Net Worth
Therefore, in a nutshell you need to calculate the value of all your assets such as the following things:
Here are some examples of liabilities that would be subtracted from your assets:
Once you have determined all your assets, and have subtracted all your liabilities, you will be able to decipher your Net Worth. I love performing this exercise, because it actually motivates me to stay on track with my annual Net Worth goals, and also provides me with an opportunity to course correct in the event that I'm falling short of my goals. For example, my recent net worth statement allowed me to see that we are on track to hitting our annual goals this year. I strongly encourage you to perform your net worth statement so you know exactly where you stand today! I suggest you go online and Google "New Worth Statement", and use any of the free statements that are offered online. Just make sure that you find a reputable site prior to downloading any spreadsheet on your computer! All the spreadsheets do the same job, and the most important thing to remember is that this exercise will help you determine where you stand today in regards to your wealth creation goals, and will help you better prepare for how you are going to get to your future wealth building goals tomorrow.
Net Worth Statement Goals
The final point that I want to make in regards to your Net Worth Statement is this, please do not be too hard on yourself when it comes to completing this exercise. Instead, I want you to see this exercise as an opportunity to steer yourself in the right direction as it relates to your wealth creation objectives. If you are currently deeply in debt, please use my story as motivation and remember that over 15 years ago I had a six figure negative net worth, and today I have completely changed my financial picture and have amassed a 7 figure Net Worth! If I was able to turn my financial life around, SO CAN YOU!!!
My book, 7 Steps to Get Out of Debt and Build Wealth is coming soon! It is currently at the printers, and will be available soon! I can't wait for you to get access to the financial strategy that allowed me to pay off over $390,000 of debt and build life changing wealth. Stay tuned for more details!!
In the meantime, make sure to keep Supercharging. Your. Life!
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