Where do you stand? Calculate your net worth

To manage your money successfully, you need a standard by which you

can measure your economic progress. One gauge of your financial headway is

your personal net worth. You can estimate your net worth by preparing a

simple personal balance sheet that will allow you to see your assets and liabilities

and where your money is going. You can then take steps to make your net worth

grow by finding ways to control spending, reduce debt and increase savings and


Prepare Your Balance Sheet

You will need a block of uninterrupted time, pen and paper or your

personal computer. (Once you have an initial estimate, you can go into a more

in-depth analysis, if you wish.) Here's what to do:

1. List your assets (everything you own that can be sold or swapped for

another item of value). Include your house, car, household goods, jewelry, bank

accounts, stocks and other investments, vested holdings in company savings

and pension plans, individual retirement accounts (IRAs) and cash-value life


2. List the market value next to each asset.

3. Total your assets.

4. Separately, list your liabilities. Record all debts, including credit

card and charge card accounts, mortgage, home equity line of credit and

other loans, such as automobiles or college.

5. Note the principal amount due next to each liability. Do not include


6. Total your liabilities and subtract them from your assets.

The result of these calculations is your net worth. (If assets exceed

liabilities, you have a positive net worth. If liabilities exceed assets, your net worth

is negative.) You now have a foundation for working toward making your

bottom line grow.

Reorganize Your Priorities

Your balance sheet can help you determine whether your finances are in

line with your goals. Depending on your objectives, you may want to pay

down old debts or postpone new ones, initiate a savings plan, go on a stricter budget

or begin a more aggressive investment policy.

Recalculate your net worth annually, and you'll be able to assess your

progress and work toward improving your money management. Your

financial recordkeeping will benefit, too.

Yvonne Hall is First Vice

President, Fiancial Advisor and a Certified Planner for Morgan Stanley Dean

Witter, located at 1640 N.W. Gilman Boulevard, Suite B1, Issaquah. She can be

reached at (425) 888-9242 or (425) 837-8401.

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