Your starting net worth at retirement determines how much you can safely spend each year for the duration of your retirement. So, it is obviously very important, that you know how to properly calculate your net worth.
Fortunately, calculating your net worth, is quick and easy. The following article explains how to calculate your net worth, but first, what is your net worth?
Net Worth – (definition) The value of everything you own minus the value of everything you owe.
Your net worth is the current value of your house, retirement savings and investments, cars, couches, lawn mower, bicycles, and collectibles. Everything you own. Minus the current outstanding balances on your mortgage, home equity loans, car loan, student loan, credit cards, and any other debts. Everything you owe.
Your net worth is what you would have left, if you sold everything you own for cash, and payed off all your debts.
Also, defined in financial accounting as, the current value of your assets minus the the current value of your debts. How do you calculate the current value of your assets, such as your house, investments and cars?
Net Worth Tools
Use these links to find the current values of your stocks, bonds, mutual funds, home, cars, and collectibles.
Investments – Yahoo Finance (enter ticker symbol)*
Home – National Association of Realtors
Cars – Kelley Blue Book or Edmunds
Collectibles – Ebay or Amazon
*Almost every stock, bond, or mutual fund has a short ticker symbol, which you enter to get a quote for the latest value per share. Find the ticker symbol or name of your particular investment, get the latest value per share, multiply it by the number of shares you own.
To calculate the values of your debts, find your latest statements, and look for the outstanding balance figure. Add up all your assets and debts, and subtract them from each other, to get your net worth.
Our Free Early Retirement Software, which enables you to retire when you want, includes a Net Worth Manager (click on image to enlarge), that let’s you easily list your assets and debts, to accurately calculate and track your net worth.
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