What is net worth? Net worth is the total value of everything that an individual or companies own wherein their assets exceeds their liabilities. If an individual or company has more assets than they have liabilities, this means that their net worth value is bigger. The richest people in the world are ranked based on their net worth. Simply put, the bigger the net worth, the richer an individual or company is. The details of one’s net worth can all be seen in a net worth statement and that is what we will be discussing here.
In this article, we have 9+ net worth statement samples in different varieties. Some of these net worth sample statements are available in PDF and Excel where you can edit or compute your own net worth and produce your own net worth statement. Together with the samples are some of information about net worth statement that you need to know. Check them out below!
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What Is a Net Worth Statement?
A net worth statement is a document containing a list of the assets and liabilities of an individual or company. The statement is used for reporting the short-term and long-term financial state or status of an individual or company. There are a lot of different uses for a financial statement aside from reporting the financial state of an individual or company. Below is a list of a few other uses of a financial statement.
- An existing net worth statement can be used as references when updating your current inventory of assets and liabilities. It is good practice to take a look at your previous net worth statements once in a while, especially if there are things that you need to update or add to it.
- A net worth statement is used to understand a company’s or an individual’s current finances so that it would be easy for them to manage and plan for their finances.
- Aside from updating and adding something to your list of assets and liabilities, a net worth statement can also help you determine if your finances has become overly complicated. It also helps you identify a lot of things in your finances that may not be that important so that you can do something about, or perhaps you can sell it and turn it into cash. This way, the finances that you are taking care of are only those that are important.
- Using a net worth statement will help in simplifying your finances. It is because having multiple accounts spread out in different financial institutions will make your finances seem complicated and difficult to manage.
- A net worth statement includes a list of your home inventory or schedule of assets. The document is as required when filing for a claim against an insurance company where it will show the list of things that has been damaged or lost during a particular incident.
- A net worth statement can be used as your own checklist for you to be able to check and keep track of your personal property floaters. A personal property floater is an insurance policy that covers your personal belongings that can be easily moved. Examples are jewelries, expensive equipment, or appliances and the likes. Tracking all of your personal property floaters is important so that you can determine which ones need to a policy rider. This is because insurance companies do not always cover these personal properties, that is why you need one.
- It can be used as a quick reference of your assets so that it will be easy to manage your estates. You can simply say that it is an easier way to plan for your estates in case something bad happens to you.
- Because a net worth statement also includes a list of all your liabilities, you can use it as reference for all the debts that you owe. Liabilities mean the things that you still need to pay off. It is important that you keep track and stay updated about your liabilities as this may become a problem if left unchecked.
- A net worth statement can also serve as your savings tracker. If you are able to keep track of your debts or liabilities with it, you ca also keep track of all your savings or liquid assets.
Aside form net worth statement, we also have other business statement samples and templates that may be interested in. They are legal statement samples and templates, mortgage statement samples and templates, and personal financial statements samples and templates.
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How Do You Know Your Net Worth?
There is a specific formula used for calculating one’s net worth and this is the formula that you need to use in order for you to find out how much you are worth. The formula to calculate your net worth is the sum of all your assets minus the sum of all your liabilities. The difference will be your net worth. Sounds pretty easy, right? Well, it is actually not. The formula to calculating one’s net worth may be fairly easy, but the difficult part is actually in the gathering a list of all your assets and liabilities. So we have made a few easy steps help and guide you with getting all that computation done.
Step #1: Choose the net worth calculator that you prefer.
Calculating your net worth will be made easy with the use of net worth calculators. You can easily find net worth calculator samples and templates online in different varieties and formats. The most common format is in Excel, but Word and PDF formats are also available. There are also calculators that are embedded on different websites and are free for use. The calculator will make it easy and convenient for do the calculation. You will just need to supply the required information.
Step #2: Gather all of your assets.
The calculator that you have selected to use for calculating your net worth includes a list of all the possible assets to be included. Your assets are the properties or things that you own including those generate income. Not everything in the list is applicable to you as you may not own such assets or properties. Only gather those assets and their values that you have or those that apply to you in the list. Examples of the assets are
- cash from saving account and checking account;
- certificates of deposit;
- mutual funds;
- notes and contracts receivables;
- personal properties, like real estate, cars, jewelries, etc.; and
- life insurance.
Step #3: Gather all of your liabilities.
After gathering all of your assets, proceed with gathering all of the liabilities that you have. Liabilities refer to one’s financial obligations. They are called debt in simple terms. Just like with your assets, also gather only those liabilities and their values that apply to you or those liabilities that you have. Some examples of liabilities are
- credit card debt or balance;
- service bills;
- notes payable;
- taxes payable;
- real estate mortgages;
- auto loans, education loans, etc.;
- utilities; and
- other long-term loans.
Step #4: Supply all of the information needed in the net worth calculator.
After gathering all of your assets and liabilities, you will need to enter their values separately on the required fields. For those assets and liabilities that don’t apply to you, leave them blank. Enter the data in their appropriate fields one by one.
Step #5: Double-check all of the values you have entered.
When all the required fields are filled, go ahead and proceed with checking if the values that you have entered are all correct. Check each value carefully to avoid any mistakes. You can ask help from somebody you know check the digits for you. They might detect something wrong that you have overlooked.
Step #6: Check the total amount at the bottom of the calculator.
Your net worth calculator will do all the needed computation for you so there is no need for you to add and subtract them manually. Once everything has been filled and double-checking has been done, scroll down to the bottom of your page and you will see there your net worth value based on the date that you have entered. You can also use the same calculator to calculate the the net of another person. Just clear out the required fields and start over.
With the use of a net worth calculator, calculating your net worth value is made easy and convenient. There are also other calculators that are as useful and accurate as a net worth calculator. Examples are home mortgage calculators, paycheck calculators, and monthly expense calculators. You may check them out on our website.
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