A personal balance sheet helps us calculate our assets, liabilities and net worth. When we know our current net worth, we can see where our financial position is weak and strong. Worksheet 1.1, along with our investment-mix worksheet, lays the ground-work for setting investment goals and making plans to reach them.
Estimate the value of furniture, jewelry and other personal property, but don’t spend a lot of time trying to be precise about those numbers. The financial aspects of the balance sheet are the most important: for example, money in savings accounts, investments in stocks, bonds, mutual funds, ETFs and real estate, plus the value of 401(k) or other company retirement plans and IRAs. What we learn about where our money is influences our goal-setting just as the amount of time we have to achieve our goals influences the kinds of investments we consider.
Chris Bryant is an American financial advisor.