Learn why it is imperative that you know your net worth as you pursue your wealth building efforts…
In the current economic environment there are many who are trying to get ahead financially.
Although that is a lofty goal, many have no clue or are totally unaware of where they now stand financially as it relates to their finances and particularly their net worth as they attempt to build wealth.
In this discussion TheWealthIncreaser.com will integrate your understanding of how you can manage your finances on a daily basis with the knowledge that you need to know that can help you “increase of your net worth” and ultimately your wealth–so that you can live in a manner that will bring you the joy that you desire on a continuous basis!
It is very important that you have a real understanding of what you own (your current assets) and what you owe (your current liabilities) as that is a critical factor as you move forward in your financial life. It is also very important that you at this time come to the full realization that your “Self Worth” is far more important than your “Net Worth” as you build wealth!
In simple form, theory and practice you can determine your net worth by creating a personal balance sheet so that you will know what you own and what you owe (assets minus liabilities equal net worth) and create a level of comfort or discomfort within your mind–depending on the “outcome of the number that you come up with”–as it relates to your net worth at this time.
However, even if the number that you come up with is not of your liking, you can change all of that by making the decision to do so and then putting an action plan in place that will take you to where you need or desire to be.
If your net worth is not at an acceptable level, you can take real steps that can assure that you will get your finances to an acceptable level or to the level that will make life more meaningful and enjoyable for you and your family!
If your net worth is at an acceptable level you can continue to make good decisions as it relates to your finances and build the type of wealth that will take you toward the net worth that you desire or toward the net worth that will make life “more enjoyable” for you and your family.
You can start on a journey of improving your net worth so that you can do what you really desire to do during your lifetime by taking several important steps:
1) Know how to use personal financial statements to your advantage
If you approach your finances with the creation and understanding of a personal budget or cash flow statement , you can put yourself in position to make the right–or at a minimum a good decision as it relates to your financial future.
You also need to create a personal income statement if you desire even more clarity about where you are headed as far as your finances are concerned. You can look at your personal income statement in the same manner as your cash flow statement—however it is on a 12 month or annual basis, whereas your cash flow statement or budget is on a monthly basis.
In addition, a personal balance sheet will provide you the knowledge of where you stand financially as far as your net worth is concerned.
The higher your net worth, the better off you are doing financially. You can purchase Managing & Improving Your Credit & Finances for this Millennium and learn about ways that you can attack your net worth before and after you retire in ways you may have never imagined.
You can go to Kiplinger.com, right now to see where you now stand as far as your net worth is concerned. Be sure you have accurate numbers as it relates to your assets and liabilities.
By doing so you can put yourself in better position to achieve the goals that you desire to attain during your lifetime.
2) Know how to manage your credit effectively throughout your lifetime
It is important that you skillfully manage your credit affairs and you don’t let creditors skillfully manage you, where you operate from a disadvantage.
Why should you operate from a vantage point of disadvantage when you can have creditors operate from a point of disadvantage—if you gain and utilize the right knowledge?
By mastering what it takes to manage your credit effectively throughout your lifetime you put yourself in position to achieve at an optimal level throughout your lifetime and at the same time put yourself in position to use credit wisely or in a manner where you come out ahead!
3) Know all areas of your finances that you must address—and then address those areas appropriately
By knowing and understanding your personal financial statements, knowing how to skillfully manage your credit and having a real understanding of where you want to take your future you are now ready to look at your finances in a comprehensive manner and make moves based on that analysis that will help further increase your net worth as you build wealth.
By knowing all areas of your finances that you must address and acting in a positive way on that knowledge, you can put yourself in position to attain many of the goals that you may have thought about—but never thought you would achieve during your lifetime.
By using financial statements to your advantage by reviewing your current cash flow and making improvements where needed–and cutting your expenses and getting more income (if you need to do so) you are getting on a real path toward increasing your net worth–and the success that you desire is more likely to occur.
However, you can’t stop there!
By having the appropriate insurance in all areas (including homeowners insurance), you help reduce your financial risks and your path toward increasing your net worth will be made in a more effortless manner!
In reality, there may be setbacks along the way and that is why you must also properly establish an emergency fund if you have not already done so.
In addition, you must manage your credit optimally and not let your credit manage you (pull you in directions that are not of “your” choosing). You must further look at ways that you can manage your insurance, investments, taxes, education funding, estate planning/wills and retirement planning in a way that will take you toward your goals in a more effective and efficient manner.
It is your responsibility to know where you stand financially and it is your responsibility to put in place a plan that will reduce or eliminate your debt so that you can start on a serious journey to building wealth and increasing your net worth.
Your sincere approach to eliminating debt, increasing your income and building wealth in a manner that truly serves your best interest is a major factor in helping you get on a fast track path to making life more enjoyable for you, your loved ones—and others as you navigate through life on planet earth.
Always remember that the more focused you are toward improving your net worth—the more mental energy you can pull up from inside your mind that can take you toward your goals more efficiently.
Be sure to put your goals in writing to help clarify your intent so that you can focus your resources (financial and non-financial) on things that really matter in your life. By doing so you will increase your net worth and build your wealth more efficiently over the coming years.
All the best to your new net worth success…
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