Weigh Your Net Worth to Determine Your Financial Fitness
It may sound like something only the rich and famous might do, but everyone really should take a moment to calculate their own net worth. It's the basis for a sound retirement strategy.


An important step in putting together your comprehensive retirement plan is calculating your net worth with a personal balance sheet.
To see where you’re going, and whether you’re on track to get there, you need to know where you are right now. You need to find out your net worth so you can determine if you’re financially fit.
To “weigh” your wealth, you’ll need a complete list of your assets and liabilities — everything you own and everything you owe. So, grab your laptop and that fat folder full of paperwork and let’s get to work.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Start with your assets
On the assets side, you’ll need to know:
- How much cash you have (checking, savings and money market accounts; Treasury bills and/or money under the mattress).
- What your investments are worth (CDs and annuities; any and all retirement and brokerage accounts; income properties or land).
- The value of your home (if you were to sell it today).
- The value of your car(s).
- The value of any other large assets (a boat, vacation home or motor home).
- Any other personal property of value (heirlooms you could sell if you needed the money, jewelry, artwork, a coin or stamp collection, etc.).
- Any life insurance policies with cash value.
- Other assets you might have.
Then think about your liabilities
On the liabilities side, you’ll want to list:
- Your remaining home mortgage and vacation home mortgage (if applicable).
- Any other outstanding loans (car loans, boat loans, student loans — yours or your children’s — home equity loans or lines of credit, any personal loans).
- Your credit card balances.
- Any other bills you’re paying over time (a tax bill, for example).
- Other liabilities.
Your personal net worth is the difference between what you own and what you owe.
Don’t feel discouraged if that number isn’t where you want it to be. That’s the point of this exercise — to motivate you to set goals and start working toward them.
And this information is critical to helping your financial professional build a plan that can get you in shape for retirement.
When your adviser talks about “growing your wealth,” what he really wants is to help you increase your net worth. After all, it won’t do you much good to accumulate a lot of money in savings and investments if, at the same time, you’re piling up debt.
Knowledge is power
Are you living to spend or spending to live? Your adviser can point out your trouble spots and provide some strategies for improving them.
If you’re house poor, you can pay more toward the principal, refinance or even downsize. If you have credit card debt, you can look at your bills and try to curb your appetite for expensive clothes or vacations. If you haven’t made investing a priority and you’re 50 or older, you can make some catch-up contributions.
Seeing the numbers on your balance sheet — good or bad — can put you in a position of power. You’ll know exactly where you stand and what you’ll need to do to enjoy a successful retirement.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Les Goldstein is the founder and president of Personal Financial Strategies Inc., a branch office of Securities America Inc., member FINRA/SIPC. Personal Financial Strategies and Securities America are separate entities. As an Investment Adviser Representative with Securities America Advisors Inc. in the greater Chicago area, he helps clients create a retirement lifestyle for themselves and leave a meaningful financial legacy for their loved ones.
-
When Should You Hand Over the Keys — to Your Investments?
The secret to retirement planning? "The best time to hand over the keys is before you’ve realized you need to hand over the keys."
By Maurie Backman
-
A checklist for high-net-worth individuals looking to maintain and grow their wealth.
A strategic guide to managing, preserving, and expanding your wealth for long-term financial security.
By Dori Zinn
-
Going to College? How to Navigate the Financial Planning
College decisions this year seem even more complex than usual, including determining whether a school is a 'financial fit.' Here's how to find your way.
By Chris Ebeling
-
Financial Steps After a Loved One's Alzheimer's Diagnosis
It's important to move fast on legal safeguards, estate planning and more while your loved one still has the capacity to make decisions.
By Thomas C. West, CLU®, ChFC®, AIF®
-
How Soon Can You Walk Away After Selling Your Business?
You may earn more money from the sale of your business if you stay to help with the transition to new management. The question is, do you need to?
By Evan T. Beach, CFP®, AWMA®
-
Two Don'ts and Four Dos During Trump's Trade War
The financial rules have changed now that tariffs have disrupted the markets and created economic uncertainty. What can you do? (And what shouldn't you do?)
By Maggie Kulyk, CRPC®, CSRIC™
-
I'm Single, With No Kids: Why Do I Need an Estate Plan?
Unless you have a plan in place, guess who might be making all the decisions about your prized possessions, or even your health care: a court.
By Cynthia Pruemm, Investment Adviser Representative
-
Most Investors Aren't as Diversified as They Think: Are You?
You could be facing a surprisingly dangerous amount of concentration risk without realizing it. Fixing that problem starts with knowing exactly what you own.
By Scott Noble, CPA/PFS
-
Will My Children Inherit Too Much?
If you worry about how your children will handle an inheritance, you're not alone. Luckily, you have options — from lifetime gifting to trusts — that can help.
By Mallon FitzPatrick, CFP®, AEP®, CLU®
-
Charitable Giving Lessons From Netflix's 'Apple Cider Vinegar'
Charity fraud is rife, and a Netflix series provides a timely warning about donating money to a good cause without looking into its background.
By Peter J. Klein, CFA®, CAP®, CSRIC®, CRPS®