Why You Should Track Your Net Worth and 3 Free Tools to Help
Net worth is a very simple concept. Basically, net worth combines all the assets a person maintains and subtracts all the different liabilities. Most people have a general idea about what assets they possess. They surely maintain a clear idea about what they owe. General ideas, however, are not exactly precise. Knowing a detailed breakdown of accounts, investments, and belongings worth money definitely is helpful to managing one’s finances. Knowing how much money is owed and where absolutely is essential.
Trying to figure the information out with a pen and paper is more than a bit ridiculous. This is doubly true since three very effective net worth tools are accessible online. With the right online web tools, figuring out one’s net worth becomes very easy.
The Three Top Tools
Of the many different net worth calculators online, the following three are among the very best:
- CNN Net Worth Calculator
- Bankrate Net Worth Calculator
- Yahoo! Finance Calculator
Here is a closer look at the three:
CNN Net Worth Calculator: This is one of the easiest net worth calculators available online for free. The venerable cable network is known for its excellent business, finance, and money reporting. The net worth calculator CNN’s website offers details a great breakdown of assets and liabilities. Simply add up stocks, bonds, jewelry, cash accounts, collectibles and other assets. Then, insert figures for debt obligations such as loans, mortgages, and other obligations. Hit the “calculate” button and see the results.
Bankrate Net Worth Calculator: This online tool is very similar to the CNN calculator in its design and performance. One unique difference is the tool allows for charting net worth growth over the course of ten years. The current level of net worth can be calculated to reveal what an increase will look like at a set percentage per year for a decade. The figure is then compared against debt at set percentage per year. A report then reveals what to expect at the end of the decade.
Yahoo! Finance Calculator: This particular net worth calculator breaks down assets in a more detailed manner than the previous two tools. Business interests, fixed-dollar annuities, trust deeds, and more are listed. For those who wish to maintain very specific tracking of their assets, this is a solid tool.
A Revelation About Debt
Staring at the facts related to one’s net worth should not just be done to look at positive reports about assets. Net worth should be examined from the perspective of debt management as well. Debt and liabilities drag down net worth. Debt connected to high interest rates absolutely can be a major drain on net worth year after year. Things such as these must be taken into consideration when hoping to manage debt.
A clear understanding of the full scope of one’s debts assists with charting the right path to get out of debt. Perhaps it would be wise to move some money sitting in a low-interest savings account to wipe out credit card debt.
Building Up Savings
A person who feels his or her net worth is lower than it should be might be stimulated to raise the figure. One way to do this would be to direct money towards better investments. Increasing the amount of money saved per year would be a noble effort as well.
The process of building up savings and cutting down on debt all starts with reviewing the figures. The three aforementioned web tools help with the cause.
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