Finance Tip of the Week: Planning
by Gareth Cotten on 19/03/10 at 8:54 am
2 comments
Net worth calculation. At this time of year (being the beginning of a new tax year) most people like to take stock of what they’ve achieved and where they stand.
While you’re doing so, take the time to find out what your financial position is, by calculating your net worth. Take a piece of paper, draw a line down the middle, and date it. On the one side, list all of your ‘assets’ and their approximate values; and on the other, list all of your ‘liabilities’.
Your ‘assets’ are basically everything you own, or are entitled to receive – think your house, car, investments, pension fund, bank balances, loose possessions, etc. Your ‘liabilities’ consist of everything that you owe – think mortage bond, car finance, credit card balances, store card balances, etc.
Once you have a running total on each side, subtract the liabilities from the assets, and you have an approximation of your net worth. This is not an exact science, but it should give you a decent idea of where you stand financially, and could either be a pleasant surprise or a wake-up call. Do this exercise reasonably often (I do it every six months), and you can track your progress as you move through life…
Gareth Cotten is one of the growing breed of SA entrepreneurs with that ‘world-domination’ look in his eyes. Gareth runs the coaching and consulting practice 'Good Advice'. Gareth is also the 'course convener' for the University of Cape Town (Law@Work) Start and Manage a Small Business course. View more articles by Gareth Cotten.
Tags: finance, Financial Planning
uberVU - social comments
Mar 19th, 2010
Social comments and analytics for this post…
This post was mentioned on Twitter by ideateblog: Finance Tip of the Week: Planning http://ff.im/-hM9uY...
Business Tip of the Week: Finances | Ideate
Mar 22nd, 2010
[...] Gareth on 22/03/10 at 12:00 pm No comments Budgeting. Along the same lines as last week’s Finance tip, take time at the beginning of the tax year to prepare a budget for the coming 12 months. This [...]