How to measure where you're at in your financial journey
Imagine you're gearing up for an adventure across the country. You've got your map out, plotting the route from where you are now to where you want to be – wealth-wise, that is. That's what your Statement of Financial Position does for you; it’s your financial roadmap.
Now, let’s paint the picture of your assets. Think about that nostalgic piggy bank from childhood – it’s grown up now into checking and savings accounts, maybe even stocks or a chunk of real estate. It’s not just about what you can spend; it’s about what you've invested in, what you enjoy, like your home, car, or even that boat docked at the marina.
But every story has its challenges, and in ours, those are the liabilities. They’re the debts that need paying off – student loans whispering from the past, or the credit card bills from your latest tech splurge.
Here’s a simple way to chart out your own treasure map. List how much you have of each below and then add the ‘subtotals’ together. Finally, add the totals together by adding the subtotals.
Assets: What you own
Cash & Cash Equivalents: Where’s your money resting easy, ready to use?
Checking Account
Money Market
Savings Account
Subtotal
Invested Assets: What investments are you growing for the future?
Individual Stocks & Bonds
401(K)
IRAs
Real Estate
Subtotal
Personal Use Assets: What do you own that enhances your life?
Cars loans
Boats
Jewelry
House
Subtotal
Total Assets: Let's see the grand total of all the above.
Liabilities: What you owe
Cars and vehicle loans
House mortgage
Credit card debt
Medical debt
Total Liabilities: Add up those numbers.
Net Worth = Total Assets – Total Liabilities: This final tally is your financial compass, pointing to your fiscal health.
Grasping your financial position is just the first step. The next? Growth. LMWF has the resources, advice, and community to turn your financial position into financial progression. So why not take the next step? Try one of our financial coaching products here https://www.letsmakewealthfair.com/products, or sign up for a coaching session with us here: https://www.letsmakewealthfair.com/coaching.
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