Why You Need to Know Your Net Worth

  • When listing values of assets, be realistic and honest with yourself. List the value of your home (to the extent that you own it) by using the actual value, not the value you’d like it have. To list your home’s value, or the value of the equity you have in it, try looking it up on Zillow.com, which uses comparative values from nearby homes to estimate value. (Unless your home is unique or in an isolated location, this can give you a pretty good idea of its value.)
  • Regarding credit card debt, look at specific expenditures to see how much of this debt stems from unnecessary spending. Note how much you can save by making lifestyle changes to rein in everyday spending and curbing your appetite for expensive purchases, particularly impulse purchases.
  • Creating a balance sheet to calculate your net worth is like visiting the doctor or the dentist for a checkup. The outcome may be highly positive, indicating sound financial health, or you may get some bad news. In the case of the latter, the idea is to find ways to treat your ailing net worth to improve it.

    Any opinions expressed here are those of the columnists and not of ABC News.

    Ted Schwartz and Jamie Cornehlsen are advisors with Capstone Investment Financial Group in Colorado Springs, Colo. Cornehlsen is also president of Dunn Warren Investment Advisors in Greenwood Village, Colo. A Certified Financial Planner®, Schwartz advises individuals and endowments. He holds a B.A. from Duke University and an M.A. from Oregon State University. He can be reached at ted@capstoneinvest.com. Cornehlsen, a Chartered Financial Analyst®, advises business owners and employees on retirement plans. He holds a B.A. from the University of Colorado and an M.B.A. from the William E. Simon School of Business at the University of Rochester. He can be reached at jcornehlsen@capstoneinvest.com.

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