Weigh Your Net Worth to Determine Your Financial Fitness
It may sound like something only the rich and famous might do, but everyone really should take a moment to calculate their own net worth. It's the basis for a sound retirement strategy.


An important step in putting together your comprehensive retirement plan is calculating your net worth with a personal balance sheet.
To see where you’re going, and whether you’re on track to get there, you need to know where you are right now. You need to find out your net worth so you can determine if you’re financially fit.
To “weigh” your wealth, you’ll need a complete list of your assets and liabilities — everything you own and everything you owe. So, grab your laptop and that fat folder full of paperwork and let’s get to work.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Start with your assets
On the assets side, you’ll need to know:
- How much cash you have (checking, savings and money market accounts; Treasury bills and/or money under the mattress).
- What your investments are worth (CDs and annuities; any and all retirement and brokerage accounts; income properties or land).
- The value of your home (if you were to sell it today).
- The value of your car(s).
- The value of any other large assets (a boat, vacation home or motor home).
- Any other personal property of value (heirlooms you could sell if you needed the money, jewelry, artwork, a coin or stamp collection, etc.).
- Any life insurance policies with cash value.
- Other assets you might have.
Then think about your liabilities
On the liabilities side, you’ll want to list:
- Your remaining home mortgage and vacation home mortgage (if applicable).
- Any other outstanding loans (car loans, boat loans, student loans — yours or your children’s — home equity loans or lines of credit, any personal loans).
- Your credit card balances.
- Any other bills you’re paying over time (a tax bill, for example).
- Other liabilities.
Your personal net worth is the difference between what you own and what you owe.
Don’t feel discouraged if that number isn’t where you want it to be. That’s the point of this exercise — to motivate you to set goals and start working toward them.
And this information is critical to helping your financial professional build a plan that can get you in shape for retirement.
When your adviser talks about “growing your wealth,” what he really wants is to help you increase your net worth. After all, it won’t do you much good to accumulate a lot of money in savings and investments if, at the same time, you’re piling up debt.
Knowledge is power
Are you living to spend or spending to live? Your adviser can point out your trouble spots and provide some strategies for improving them.
If you’re house poor, you can pay more toward the principal, refinance or even downsize. If you have credit card debt, you can look at your bills and try to curb your appetite for expensive clothes or vacations. If you haven’t made investing a priority and you’re 50 or older, you can make some catch-up contributions.
Seeing the numbers on your balance sheet — good or bad — can put you in a position of power. You’ll know exactly where you stand and what you’ll need to do to enjoy a successful retirement.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Les Goldstein is the founder and president of Personal Financial Strategies Inc., a branch office of Securities America Inc., member FINRA/SIPC. Personal Financial Strategies and Securities America are separate entities. As an Investment Adviser Representative with Securities America Advisors Inc. in the greater Chicago area, he helps clients create a retirement lifestyle for themselves and leave a meaningful financial legacy for their loved ones.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or Relocate
Homeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and Friends
What starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
What the HECM? Combine It With a QLAC and See What Happens
Combining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.
-
721 UPREIT DSTs: Real Estate Investing Expert Explores the Hidden Risks
Potential investors need to understand the crucial distinction between a REIT's option to buy a Delaware statutory trust's property and its obligation.
-
I'm an Insurance Expert: Yes, You Need Life Insurance Even if the Kids Are Grown and the House Is Paid Off
Life insurance isn't about you. It's about providing for loved ones and covering expenses after you're gone. Here are five key reasons to have it.