Net Worth – Are You Worth More Dead Or Alive?

Kiki Do You love Me? Are We Riding? Netflix and chill, whats your net – net worth?

Screeching…….

It’s a great track but have you ever really wondered what your net worth is? Or what net worth even means? Is that common saying – I’m worth more dead than alive really true? Let’s find out!

Essentially your net worth comes down to this.  Do you own more Assets than Liabilities? If not, unfortunately you likely have a negative net worth.

If you do, that’s cool. We all start somewhere. When I started learning about finances and we (me and my wife) calculated what our financial picture was, we were worth a negative seven thousand dollars. It was kind of an eye opener. We knew we had debt (everyone does right?) but we had a house, there must be equity there? Sure there was, but our debt load cancelled all that out. At the time we really were worth more dead than alive…….

The good news is that, we now know there is some work to be done! I’m a glass half full kind of guy!

I couldn’t find our Original Net worth but this is one just a couple months later. (A $12,000 difference)

Do You Do A Net Worth Statement?

Calculating your net worth is very simple and yet I don’t think it’s a common thing people do. Personally I figure out ours every month and keep it for our records. Although there is absolutely nothing wrong with calculating yours quarterly, semi- annually or even annually. Just try to do them once in awhile! It can be a real eye opener or even a reason to just give yourself a pat on the back and say good job.

I think doing your net worth statement is a great way to see your progress and kinda exciting as well! In one form you can see everyone of your assets and liabilities and also forces you to keep an eye on everything.

Getting Started.

Creating a net worth statement can be a little slow your first time around but gets easier and faster once you have your previous one saved. I got a couple excel spreadsheet’s in a book I read – Smoke and Mirrors (came with a cd) There was a couple different forms but the net worth one is by far the most common one for us to use.

I  have now changed some category names and inserted a couple new rows. (Ie. Precious Metals, Private Investment, TFSA’s etc) The premise is the same though.

At the top list your assets and in the following column look up their values or calculate an approximate value. (Note – some assets depreciate in value. Cars and other toys essentially. I lower each cars value by $200 per month and they are 2013’s!) Our house is a pretty static number, but I may update it once a year if I have a rough idea of the value.

Create a Row to Total up all your assets

Below your asset Total list all your liabilities. (what you owe) If you owe your friend 50 bucks include them as well! Don’t cheat yourself and also this may help you pay them back sooner as you don’t want to see that every month

Now Create a Row to Total up all your Liabilities

Net worth = (Assets – Liabilities)

Creating your own Excel spreadsheet is really simple and you can even make it add those rows for you! If you just want to calculate your worth the odd time though. Just google net worth calculator. There is a tonne of different websites that you can input your numbers into and they figure it out for you.

Our Current Net Worth

Some of you may be wondering what our current picture is like almost 8 years later. This is something we have chosen to keep private. (at least for the time being) I share our entire dividend portfolio with you all and just that itself is a lot higher than our net worth in 2011.

We have friends and family who know about, and sometimes view the website……. Haha! So we don’t need to share everything. I can definitely say that since we have made doing these sheets a priority, I watch our finances a lot closer.

Our net worth has increased dramatically over the years and with the law of compounding on our side I expect it to grow even faster year over year.

Conclusion

In no way, do I want this post to come across as me bragging or whatnot. I think calculating your net worth is a crucial part of your financial picture. This one piece of paper itself is a painting of your exact financial position currently!

I hope a bunch of you already figure out your really worth, and if you don’t I hope this motivates you to check it out. As I said earlier our first net worth sheet really shocked us. Knowing your worth less than 7 thousand sucked… But it was the kick in the ass, we needed to step our game up and get the ball rolling in the right direction!

Do You Currently Calculate your net worth? If so do you do it monthly, quarterly etc?

Is there anything I missed that you would recommend? Or Do You Have Any Questions?

Cheers!

Rob

Hey I’m Rob, creator of Passive Canadian Income.

In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.