Unlike the board game, Monopoly, we don't all begin our wealth building sitting at "Start" with $1,500 from the bank and no debt.
As you begin the process of developing a retirement preparation strategy, finding your starting point is a key step.
Net worth provides a snapshot of your current financial situation. When calculated periodically, your net worth can be viewed as a financial report card that allows you to evaluate your current financial health and may help you figure out what you need to do in order to reach your financial goals.
Calculating net worth is a simple formula of subtraction your debts from your assets. Collecting the data to create your assets and debts can take a little more effort.
An asset is anything that you own, whether tangible or intangible, that can be traded for cash value (or is already cash). Examples of an asset are:
A debt is an obligation that you owe to another person or entity. Examples of debt are:
Your net worth will likely change over the course of your life. People just starting their careers, especially with college loan debts, may have a negative net worth.
Once you have your net worth, the continuing process of budgeting, debt reduction, investing and contributing to your retirement account builds your future net worth.
If you would like someone to help organize a strategy, please contact a OneAmerica Financial® professional.
OneAmerica Financial is the marketing name for the companies of OneAmerica Financial. Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice.
