Every financial planner will tell you that knowing your current net worth is the first fundamental step in the financial planning process. Taking stock of who you are and where you stand will help you to determine your financial goals and dreams and towards a realistic and practical financial plan.
You need to put down in paper all your current assets and liabilities to complete your net worth statement. Your current assets will include your home, bank accounts, saving accounts, real estate investments, stocks, bonds, cars, and everything else that you possessed. Your liabilities will include the mortgage on your home, real estate loans, car loans and any other debts you may have.
Why is this first step so important in financial planning? The two situations below will help to explain why carrying out this exercise is such an important aspect of the financial planning process:- Continue reading ‘Net Worth Statement – First Step in Financial Planning Process’ »