Skip to main content

Net Worth Statement and Financial Planning


A net worth statement tells you your true worth at a given point in time. A net worth statement is nothing but your assets subtracted by your liabilities. Now what all is to be included under assets? Assets are of five types,


net-worth-statement

Assets


The first is equity - it includes direct stocks, equity mutual funds and ULIPs. The second one is debt, which includes fixed deposits, debt funds, PFs, Post office investments, Traditional life insurance premiums, insurance policy could be a money back policy, endowment, etc. The next asset class is liquid, it includes cash, your savings and current account balance and liquid funds. Fourth asset class is gold, which includes gold coins, bars, gold funds and gold exchange treated funds. We have intentionally excluded gold jewelry from gold asset class because we might think it is an asset but we sold on selling. The last asset class is real estate which includes your house, land and commercial space.


Liabilities


It includes all your loans which could be personal, vehicle, home, education etc.

Now what you see in front of you is the net worth statement of Alex and John as of today. You could also group your asset classes as we discussed earlier that is, equity, debt, liquid, gold and real estate. Currently, Alex, and John have a home loan and a car loan which has been included in the liability section. Total assets subtracted by the total liabilities that is the net worth of the Alex and John.


As of Today
Alex
John
Total
Assets
Equity
Debt
Liquid
Gold
Real Estate

1,00,000
6,40,000
1,00,000
1,00,000
30,00,000

2,00,000
12,40,000
2,00,000
0
30,00,000

3,00,000
18,80,000
6,00,000
1,00,000
60,00,000
Total Assets
39,40,000
46,40,000
85,80,000
Liabilities
Home Loan
Car Loan

10,00,000
50,000

10,00,000
50,000

20,00,000
1,00,000
Total Liabilities
10,50,000
10,50,000
21,00,000
Net Worth
28,90,000
35,90,000
64,80,000

So we have seen what is net worth today, it is nothing but your assets subtracted by liabilities. We have also discussed about the asset types and we have also seen a sample net worth statement. Hope you now know how to check your financial status at a given point in time with the help of cash flow statement and the net worth statement.