Comments on: Using and Understanding a Net Worth Statement http://cashmoneylife.com/create-net-worth-statement/ Money Management, Small Business, Career Thu, 09 Feb 2012 19:08:34 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Eric http://cashmoneylife.com/create-net-worth-statement/#comment-22205 Eric Mon, 08 Mar 2010 19:35:18 +0000 http://cashmoneylife.com/?p=2196#comment-22205 It seems like we have had similar inspirations. I think everyone should look at their personal finances like a business. That is why I wrote about personal income, blance sheet, and cash flow statements. I made a public template for personal Cash Flow statements on Google Docs that is linked from the cash flow article at Narrow Bridge. Feel free to share. It seems like we have had similar inspirations. I think everyone should look at their personal finances like a business. That is why I wrote about personal income, blance sheet, and cash flow statements. I made a public template for personal Cash Flow statements on Google Docs that is linked from the cash flow article at Narrow Bridge. Feel free to share.

]]> By: Ryan http://cashmoneylife.com/create-net-worth-statement/#comment-22204 Ryan Mon, 08 Mar 2010 17:31:02 +0000 http://cashmoneylife.com/?p=2196#comment-22204 Eric, great comment. Net Worth IQ and Mint.com are both great sites. By the way, tomorrow's article is about creating a cash flow statement. :-) Eric, great comment. Net Worth IQ and Mint.com are both great sites. By the way, tomorrow’s article is about creating a cash flow statement. :-)

]]> By: Eric http://cashmoneylife.com/create-net-worth-statement/#comment-22203 Eric Mon, 08 Mar 2010 17:25:57 +0000 http://cashmoneylife.com/?p=2196#comment-22203 I think a net worth breakout between current and long term assets and liabilities is important to cover what both aa7596 and Financial Samurai are talking about. Like a corporation, you need to know that you can cover your current (I use a 1-3 month time frame) obligations. Knowing the big picture on your long term obligations helps you plan out future spending and saving strategies. I use two main tools to create a monthly "personal balance sheet." I stop by Net Worth IQ to keep a trend of my total net worth running, and I use Mint.com for a snapshot. I wrote a step by step break down on easily putting together a . <a href="http://www.narrowbridge.net/2009/03/personal-balance-sheet-week-project/" rel="nofollow">personal balance sheet</a>. I wrote that as part of a series on <a href="http://www.narrowbridge.net/2009/04/what-do-personal-financial-statements-mean/" rel="nofollow">personal financial statements</a>. I hope you find those tools useful. I think a net worth breakout between current and long term assets and liabilities is important to cover what both aa7596 and Financial Samurai are talking about. Like a corporation, you need to know that you can cover your current (I use a 1-3 month time frame) obligations. Knowing the big picture on your long term obligations helps you plan out future spending and saving strategies.

I use two main tools to create a monthly “personal balance sheet.” I stop by Net Worth IQ to keep a trend of my total net worth running, and I use Mint.com for a snapshot.

I wrote a step by step break down on easily putting together a . personal balance sheet. I wrote that as part of a series on personal financial statements. I hope you find those tools useful.

]]> By: Ryan http://cashmoneylife.com/create-net-worth-statement/#comment-22201 Ryan Mon, 08 Mar 2010 14:18:39 +0000 http://cashmoneylife.com/?p=2196#comment-22201 Great response, aa7596. The assets are yours, but there may be barriers to accessing them immediately. I don't think excluding them completely from your net worth is a good idea. There are times when this information is absolutely necessary to your financial picture. The mots evident example would be when considering retirement. You need to know how much money you have in your retirement accounts and other investments to help determine what kind of retirement you can expect, or even whether or not you can afford to retire. Great response, aa7596. The assets are yours, but there may be barriers to accessing them immediately. I don’t think excluding them completely from your net worth is a good idea. There are times when this information is absolutely necessary to your financial picture. The mots evident example would be when considering retirement. You need to know how much money you have in your retirement accounts and other investments to help determine what kind of retirement you can expect, or even whether or not you can afford to retire.

]]> By: aa7596 http://cashmoneylife.com/create-net-worth-statement/#comment-22199 aa7596 Mon, 08 Mar 2010 13:32:04 +0000 http://cashmoneylife.com/?p=2196#comment-22199 Yeah, I agree that you should include your home, in addition to the 401k, IRA, etc. The whole point of the exercise is to sum the entirety of your assets and liabilities, not just look at your bank statement. That said, one should bear in mind that certain assets have built-in costs associated with them: the 401k will incur taxes upon withdrawal, the home may require a real-estate agent in order to sell it, and so on. Yeah, I agree that you should include your home, in addition to the 401k, IRA, etc. The whole point of the exercise is to sum the entirety of your assets and liabilities, not just look at your bank statement.

That said, one should bear in mind that certain assets have built-in costs associated with them: the 401k will incur taxes upon withdrawal, the home may require a real-estate agent in order to sell it, and so on.

]]> By: basicmoneytips.com http://cashmoneylife.com/create-net-worth-statement/#comment-22198 basicmoneytips.com Mon, 08 Mar 2010 12:29:28 +0000 http://cashmoneylife.com/?p=2196#comment-22198 Good points in this article. I agree with the author, it is important to know your networth or balance sheet. Companies must do it for account purposes so it make sense that individuals should do it. Personally, I think you should add in your home. For a lot of families, that is a substantial asset, just like if a company owned the building it was in. I am not especially interested in cars being on there, but of course if you are making payments that would need to show up on the debt section of the worksheet. Good points in this article. I agree with the author, it is important to know your networth or balance sheet. Companies must do it for account purposes so it make sense that individuals should do it.

Personally, I think you should add in your home. For a lot of families, that is a substantial asset, just like if a company owned the building it was in. I am not especially interested in cars being on there, but of course if you are making payments that would need to show up on the debt section of the worksheet.

]]> By: Financial Samurai http://cashmoneylife.com/create-net-worth-statement/#comment-22193 Financial Samurai Mon, 08 Mar 2010 05:45:44 +0000 http://cashmoneylife.com/?p=2196#comment-22193 Ryan, I firmly believe that everybody's net worth is an ILLUSION if the use the traditional way to calculate net worth. The only thing that is real is the cash in your bank account. Your 401k, pension, property, nothing else counts unless the house is paid off, and your investments are converted to cash. Cheers, Sam Ryan, I firmly believe that everybody’s net worth is an ILLUSION if the use the traditional way to calculate net worth.

The only thing that is real is the cash in your bank account. Your 401k, pension, property, nothing else counts unless the house is paid off, and your investments are converted to cash.

Cheers,

Sam

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