Net Worth Annual Report
In business, we see annual reports all the time. They enable companies to give shareholders and stakeholders information about their financial performance. Have you ever thought about providing an annual report to your personal stakeholders? Even if you’re only accountable to yourself, getting it all down on paper will put your financial life in perspective.
Your personal annual report won’t be a big booklet. You just need a simple list with assets on one side and liabilities on the other. Assets include any cash you have in the bank, plus the fair market value of your home, other properties, investment portfolios and valuables. Liabilities are your secured debt (mortgages, plus car and business loans) plus any unsecured debt (student loans and credit cards). See the image below for more detail.
By subtracting your liabilities from your assets, you’ll arrive at your net worth.
How did you do this year? If you calculated your net worth last year, what does your year-over-year report show?
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