When setting financial goals and developing an investment strategy, it is recommended that you start by preparing a financial statement that determines your net worth.
Step 1: Statement of Net Worth
- A Statement of Net Worth shows your assets and liabilities.
Step 2: Identify Your Assets, Which Include:
- Cash – all checking, savings, money market accounts, etc.
- Investments – stocks, bonds, retirement funds, etc.
- Real Estate – equity in your home, etc.
- Vehicles – automobiles, boat, etc.
- Miscellaneous Assets – life insurance policies, etc.
Step 3: Identify Your Liabilities, Which Include:
- Credit card debt
- Other debt/bills payable
- Unpaid estimate of taxes
Step 4: Determine Your Net Worth:
- Assets – Liabilities = Net Worth
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