Many people think about that special day when they will be able to retire but rarely do anything to get to that special day. Americans are currently saving less than 1% of their income. Home foreclosures are at their highest. If we have a positive net worth it most likely is due to our real estate holdings or put another way, our home. We are currently in a real estate boom. Home prices have gone up up and away. Unfortunately what goes up must come down. Fortunately real estate only comes down for a while and time will cure all ills Biography.
So what is the best way to reach your retirement goals? I don’t know, but I do know that most people have no clue as to how to measure how well they are doing. We all know that you must have financial goals to reach retirement but you must also know how well you are doing on a monthly, yearly and decade basis. If you don’t know how to measure your investment performance then how will you know if you are meeting your goals? The single best way to determine how well you are doing is to keep track of your net worth. Net worth figures are not just for big business but are for you. What better way to know how well you are doing financially?
So how do we calculate net worth? Simple. Add up all of your assets and subtract your liabilities and you will know your net worth. Assets are your home, bank accounts, saving accounts, retirement accounts, real estate investments, stocks, bonds, cars, and everything else you own. Your liabilities are everything you owe. For example, the mortgage on your home, real estate loans, loans on retirement funds, car loans and any other debts you have.
By keeping track of your net worth on a monthly and yearly basis you will see if you are moving in the right direction. One of the difficulties of knowing your net worth is determining the value of your assets accurately. For example how much is your home worth? Well it is not worth what you think it is worth. So many times we tend to think our home is worth more than it really is worth. There are several free online home appraisal websites that you can use to get an accurate value for your home. I suggest using at least three of these sites and average the appraisals.