Calculate your Net Worth… and Prepare for It to Grow

Financial Freedom in 2021! Take Action: Day 1

What’s your biggest asset? Some say it’s their house, their education, their health, or even their smile. According to Ric Edelman in The Truth About Money: 4th Edition, your greatest asset is your ability to earn an income.

However, for this exercise, I encourage you to actually take inventory of everything you own that has a cash value and to determine what that value is. This list might include your home, your car, your retirement accounts, your savings and checking account balances, the cash value of a whole life insurance policy, or even a rare beanie baby collection. =) If you can trade it in for cash, it counts.

Also, take inventory of your liabilities. This means debt. Do you owe money on your mortgage or on your car? Do you pay your sister’s ex-boyfriend monthly for a personal loan? Are you still paying student loans? Be prepared to enter every dollar you owe to get an accurate account of your total net worth.

Once you have everything in front of you, plug it all into this net worth calculator. Take that number and write it down somewhere. Print it in large print on a piece of paper or start a spreadsheet to keep track of how that number will change over the year. You need to know this number even if it’s hard to look at. Don’t be discouraged. As of just two years ago, our net worth was declining rapidly, but we’ve grown it by almost a HALF MILLION DOLLARS due to making the changes I’ll be sharing this month.

Stay tuned for tomorrow’s action step…

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