Whether you have broken your 2020 new years resolution by now or not, for the most of us, our finances continue to be a concern.

Here is the first step towards planning for a Secure financial future.

Take Stock of Current Financial Status, that is,

• Calculate your current NET WORTH.
  • Do this at least quarterly; certainly
  • do it once a year!
• Compute the current value of all your assets (what you own).
  • The total of non-obligated funds (balance) at all bank accounts
  • The fair market value of all real assets you own
    • trade-in value of cars, motorcycles, boats, scooters, trucks, etc.
    • Current fair market value of all real property you own
      • house(s), farm(s), land(s), etc.
    • Current trade-in value of equipment and appliances you own
      • TV’s, Refrigerator, tools, computers, sound systems, etc.
    • Current trade-in value of all furniture, jewelry, antiques, etc.
  • Compute the current value of all financial investment instruments
    • (these are the value of these instruments
      • that will be available to you on demand
      • after deductions of all penalties, fees,commissions etc.)
    • Cash payout of all retirement accounts
    • Cash payout value of bonds, stocks, etc.
    • Cash payout of life and other insurance policies
      • if any;
    • Cash payout of all other investments

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• Compute your total debts (Liabilities);
  • Current short term loans
    • (those payable within 1-5 years)
    • credit card(s) balance(s)
    • total current value of all car loans/note(s)
    • other short term debt(s)
      • e.g. lease or rental obligations
  • current value of total long term obligations
    • Mortgages/house payments
    • Student Loans
      • many student loans have a payoff value
        • attached to your total balance
    • Other Long term contractual Obligations
      • current value of total child support payments
      • current value of alimony or divorce settlements, etc.
      • current value of all other court ordered payments, etc.

• Compute the Net Worth
  • = Total Current value of Assets – Total Current Value of all Debts.
  • This is the foundation of all planning for a secure financial future!
  • The numbers need not be super accurate.
  • This is just a birds eye view of your current position

• Now that you know your current financial status,

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• the Next Step is to SET SOUND FINANCIAL GOALS
  • That is, clarify where you want to be
  • That’s in the next Post

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