Taking Stock
How clear are you about where you stand financially? If you're like many people, you probably focus
on only part of the picture, perhaps how much money you have in your retirement savings or the amount
of equity you have in your home. To better understand your financial progress from year to year, you may
want to try estimating your net worth.
Did Your Net Worth Increase in 2000?
Net worth represents the total amount of money you would have left after selling all your assets and
paying all your debts. To calculate net worth, put together a personal balance sheet using current values
as of a certain date, December 31 for example.
The accompanying worksheet is designed to help you calculate the amount you added to your personal
wealth during 2000 – or the amount of wealth you lost. To use it, list all your assets at their estimated
market values as of December 31, 2000, and December 31, 1999. Then estimate the amounts you owed at the
end of 2000 and 1999. Subtract total liabilities from total assets to arrive at a net worth figure for
each year. If your 2000 net worth figure compares favorably to 1999's, you're making progress toward increased
financial security.
Time for Some Changes?
If you're not happy with your progress or you find yourself losing ground, consider making some changes.
Perhaps you should review your investment portfolio to see whether it is performing up to your expectations.
Maybe you are carrying more debt than you should. By reviewing the mix of your assets and liabilities,
you may uncover weaknesses in your financial situation that can be corrected.
Personal Balance Sheet
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12/31/00
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12/31/99
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ASSETS
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Cash (in the bank, money market accounts, etc.)
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Mutual Funds, Stocks, Bonds, and other securities
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Retirement Account(s)
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Business Interest(s)
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Life Insurance Cash Value
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Residence(s)
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Other Real Estate
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Cars, Trucks, etc.
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Other
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Total Assets
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LIABILITIES
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Credit Card Balances
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Mortgage(s)
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Car Loan(s)
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Other debts
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Total Liabilities
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NET WORTH (Assets minus Liabilities)
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