Net worth is the remaining figure after accounting for total financial assets and liabilities. It involves subtracting all debts, like a mortgage, from the sum of all assets, such as a home and investment portfolio. Determining your net worth is a personal finance necessity because it establishes your ongoing progress and assists with future financial decisions involving assets and debt.
It’s best for investors to update their net worth figure on an annual basis so that a benchmark is available to use in evaluating financial health. By calculating net worth regularly, a current financial situation can be compared to future financial needs. A key tip for investors calculating net worth is to be realistic. With a slightly conservative mindset, assets can be valued more appropriately and help provide a more accurate depiction of net worth. Work with your Enso | Sonoma financial advisor to determine your net worth and decide how to use it to your advantage.