Updated: Oct 16, 2021
Have you ever heard the word Net Worth or Financial IQ? In the world of finances, how much you need to retire is based on a number, and that number is known as your Financial IQ. The good thing is, you determined what that number is based on your retirement goals.
So, what is Net Worth? Your Net Worth is the value of all assets, minus the total of all liabilities. Put another way; net worth is what is owned minus what is owed.
Today, I want to show you how to calculate your Net Worth. Knowing your current Net Worth can help you determine where you are financially and how much you need to reach your Financial IQ. Use the Net worth calculator on the bottom.
The first time I calculated my Net Worth was after hiring a Financial Advisor in 2012 and almost every year after that. I did it basically because I’m a financial nerd and like to see how my numbers flow. It’s broke down into Assets and then Liability.
I started with assets - Cash on hand, emergency fund, 401k balance, my home at its current value__the value of any other real estate you may own. ect
Then followed up with liabilities- mortgage, credit cards, vehicles, etc.
This was before my Dave Ramsey Total Money Make Over Journey or “I’ve had it” moment. My net worth was nothing compared to how it looks today. The last time I did it officially was 07/2020. I will do the same thing this year. My ONLY liability is my home, and that, my friends, is dropping like a rock.
Give it a try. You’ll either be encouraged or motivated. It’s fun to see the totals change and your priorities change too.
~~Congratulations, you are on your way to becoming Everyday Millionaire (EDM)~~
Net Worth: https://www.ramseysolutions.com/retirement/net-worth-calculator
Financial IQ: https://www.ramseysolutions.com/retirement/riq
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