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Know How Much You're Worth
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Click here to download the Net Worth Worksheet (Microsoft Excel (.XLS) file, 26.0 KB in size)
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Most people have never done a net worth calculation. But it’s a worthwhile exercise because it allows you to see your total financial position and could be the catalyst for some changes in direction.
Your net worth is the total value of all your assets (or your family’s assets) less any outstanding liabilities. To arrive at the number, list everything of value that you own and then subtract all your debts, such as mortgage principal, credit card balances, and consumer loans. The bottom line is your net worth. It’s a good idea to review your net worth position annually to see where you stand and what changes have occurred.
We’ve developed a Net Worth Calculator that you can use to do this. It’s in Excel format, so you’ll need to have the appropriate software installed on your computer.
Here are some pointers that may assist you in the process:
- The numbers in the assets section should represent the value of each item if it were sold today — not what you originally paid.
- Registered assets: Include here the current value of any holdings you have in registered plans at their market value today.
- Non-registered liquid assets: This category consists of investments that can normally be converted to cash reasonably easily, although not always at their face value. Use current market values in all cases. Use updated bank statements, brokerage reports and mutual fund statements as your information sources.
- Non-registered illiquid assets: In this group, list the current value of any assets that are not easily convertible to cash. Real estate is included here because the sale of property can sometimes take several months. Show the full current market value of any property you own; outstanding mortgages will be deducted in the Liabilities section. Limited partnerships are also listed here, as there is usually no ready market for such units if you need to sell. Business interests should include the value of your ownership position in any company not publicly traded. Vehicles, collectibles, furnishings and the like should be listed on the basis of how much they could be sold for today if you needed to raise cash.
- Liabilities: List the current amounts outstanding on all loans. This will help establish priorities for the debt reduction part of your retirement plan.
- Note that we have separated “deductible” from “non-deductible” loan liabilities. This is useful information for tax purposes. As a general rule, the interest paid on loans incurred for investment purposes is tax deductible. The major exception is RRSP loans.
- For a family net asset statement, show the total value of the assets and liabilities of both you and your spouse or partner. If any other members of your household have assets and liabilities, include those as well.
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CBC Plug in
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"VF has been a blessing to me and my family. Even if you are not a big contributor, the information is there for you to read. It is amazing that the fine members of VF will openly help and provide ideas to enhance each others investing." - Don
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The Students On-Line Source for Financial Advice!
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Canadian Association of Retired People
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50Plus Magazine
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