Net Worth: How Much Are You Worth

Total Assets - Total Liabilities = Net Worth

 

Note: This is how I calculate my Net Worth. The degree of frequent updates that I have been doing to calculate it is my choice. It might be "OC" to most but then again, its my choice.

How do I calculate my net worth? As you can tell by my past posts, I am a pen-and-paper kind of person. I write everything and I refused to learn the software finance thing. I don't know but I am just comfortable with pen and paper. Different folks, different strokes,right?

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Personal Statement of Assets
As of May 2013

Note: I chose the month of May entry coz my handwriting seems neater here

Note: One dollar = PHP 41 is the constant conversion that I use

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Assets- everything you own which can be converted into cash when you decide to sell them with estimated value on each and every item

Example of Assets are written below:

Cash

• Cash on hand

• Back Account Deposits (Checking and Savings)

Properties

• Real state properties ( house and lot, condos, rental properties, etc.). Use the Balance of the Principal
• Vehicles
• Furniture and appliances
• Jewelry
• Clothes, shoes and accessories 
• Collections (Arts and painting, antiques,books, CDs, DVDs, Blu-Rays,comics, old newspapers and other collectible items) 
• List down things that has value around your house. Look around. Be realistic. Don't know the price or a certain item? Google it. Easy. Be sure to put the present market value of the item and not the original value you pay for it. Car you bought for Php 500,000 would not cost Php 500,000 3 years after. Again, be realistic.

Receivables

• People who owe you money. Pray that they will pay so it'll boost your net worth.Haha

Investments

• Stocks
• Mutual Funds- Value per share multiply by the the number of shares you own)
• Pre-need plans-(Memorial, insurance, educational, pension, etc.) Use the pre-termination value in case you want to pull it out earlier. It is stated in the Term and Conditions of your plan. Remember, no matter how much you put in the plan, you can't get everything back once you pull out the plan earlier than the date you agreed and signed in you contract.
• Businesses you might have

Liabilities

• Credit card debts
• Items you bought on installment
• Real state property loan (housing and the likes)
• Salary loan
• Money you owe to you friends,family, relatives, landlord, sari-sari store nearby, etc.

Calculating your Net Worth:

Take your Total Assets minus your Total Liabilities and the answer is how much you are currently worth.

If you ask me when do I update my net worth, I update it every 3 months, yup, 3 months! I like the feeling of knowing that all my saving tactics and my frugal ways are working coz my net worth keeps on increasing!

Calculating how much you are worth is one of the foundations of personal finance. You can't have a better grasp of your finance life without knowing where you at or where you stand. It's like watching Star Wars movies, to know how a boy named Anakin from Tatoine became a Jedi then turned to the dark side and would eventually restore the balance of the Force, you must watch the first movie,Phantom of Menace, which I find boring. It might be boring but it's necessary so you would be able to understand the whole thing before jumping to the next movie Attack of the Clones,  which I find more exciting than the first one.

Calculating your net worth is boring especially when you get to the part of looking at debts. Can we skip this part and go to the much more exciting part instead ,like investing maybe? I suggest you painstakingly do this first so you would know how much you owe and how much you are worth.It's futile to invest and the possible interest of your investment is lesser than the interest the bank is charging you for your debts. Besides, nothing beats the good feeling of no bad debts lurking around.

I hope you find this post helpful.

Happy calculating!