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Getting StartedAll good plans have to start somewhere and ours starts here. Before you can move towards your goals you need to determine where you currently stand. You will need to determine your current net worth. Next you need to set your initial goal or goals. We also want to you to start thinking positive about reaching these goals. First say "I can be a millionaire!", its all in your attitude. I highly recommend that if you are married or have a significant life partner that you read and work through this site together. The old adage that "Two heads are better than one." never had better meaning than here.
This site is still new and growing. We are constantly gathering more information and expanding each area. So please check back often to see what has been added. One thing we will be adding is a Frequently Asked Questions (FAQs) to each area. This should provide more answers to assist you in your goals.
What you need to beginThis page is typical of what you will find on the site. We state the goal of the page. Then we explain how you might attain these goals. On some pages we break down the explanation into various sections that relate to the various age groups. We do this to show approaches to gaining wealth and how aggressive you may want to be can very with your age and time frames to reach your goals. Please read all sections as you may find that some parts may relate to your specific situation.
Throughout the site I use Excel Spreadsheets to show examples. These examples look like a picture in the text. In many cases it will be difficult to see enough detail. But if you click on the picture you will see a full size version in a separate window. I also provide a blank spreadsheet for you to use at the bottom of the section. If you do not have Excel, I highly suggest that you consider getting a copy. Spreadsheets can be invaluable in trying out what if scenarios. I have also provided an Acrobat (PDF) version. To access these spreadsheets you can double click them. You will be prompted to open or save. In most cases you will want to save a copy. I highly suggest that you set up a folder somewhere on you computer that contains these files so that you have just one place to look for them in the future. The PDF versions will open in a separate window like the examples and from there you can save them or print them so you can fill them out. These pages will not have site navigation and should be saved and closed when you are done with them.
At the end of each section I list reference materials that will help you on your way. These include web references, books, software and other items we have used and referenced in our search to reach our goal. These also provide other view points and information to give you a wider perspective. Please take the time to make use of these as they have been very helpful to us.
Let's Begin with calculating your net worthYour net worth is the dollar figure you get by adding up all of your assets (what you own that has value) and subtracting your liabilities (what you owe, your debts). If this figure is negative, that says you owe more than you own. Please keep an open mind and a positive attitude when determining your net worth. A negative number is just fine at this point as the rest of the web site is going to give you ideas you can use to move in a positive direction. We started with a negative net worth and we made it! Stay positive!
 The example net worth worksheet is on the right. Open and/or print a copy to follow through the various parts. (At the bottom of the page is a net worth spreadsheet you can use also.)
ASSETS
The first part lists your assets. We start by listing cash assets like checking and savings accounts. In the big picture these will mean little as they change day-to-day. But there are times when these amounts grow to allow for emergency funds and other short term cash needs. If the cash asset is deposited with a financial organization other than a bank or credit union, you may want to list it in the investments section below. You do not have to list any ready cash you have outside an institution, unless you have stuffed your matteress with cash. In that case, count it.
Other assests are tangible things that you own or are buying on time. Here you can estimate the amount these items would bring if you chose to sell them today. Some assets, like your home, increase in value over time. Other assets like cars and boats decrease in value. For each of these items we usually update them from one to two times a year. When you fill out your net worth it is important to be honest with the estimates that you come up with. To over estimate could lead to trouble later on. We choose to under estimate slightly to allow for fluctuations and gives us a conservative overall estimate.
Investments are those assets, usually intangible assets, like money market, stock, bonds, and mutual funds. Some people may have rental property or business assets that could be listed here. We usually list this area by account vs each stock or mutual fund. That way we still get the value in a concise format, yet detailed enough that when we can easily update it from our monthly statements.
Now each section has it own total with an overall total that shows how much in assets we own. Even when we were first getting started it suprised us how much we actually had.
Use the link below to find more information on getting started.
Visit our on-line store for related books and products
LIABILITIES
Liabilities are those items that you owe money on like your home mortgage, car, credit cards and personal loans. You should also count any loans of money that family members have loaned you that you intend or need to pay back.
Mortgages can include first mortgages, second mortgages, equity loans, builder loans or any loans that you have used your home or property as collateral for.
Other liabilities are moneys that you owe to any financial institution or individual that you need to pay back. They can include car and boat loans, credit card, furniture loans, store credit, or personal loans from family and friends.
Be sure that you list these acurately as we will talk in depth about how to go about reducing your debt load on the handling debt page.
The liability sections also have subtotals and an overall total as we saw with assets.
The bottom line comes when you subtract the liabilities from the assets. If the number is positive (assets larger than liabilities) then you are already in good shape and if you can stay positive your goals will be reached much faster. If the overall total is negative that is OK! Many people fall into this category and is not something to be ashamed of. What it does mean that in the future you need to balance reducing your debt while increasing your assets. In many cases the increase in the value of your home and you paying off your mortgage will bring you into positive territory over time. So by increasing your assets through saving and investing will get you to your ultimate goal. But everyone needs to keep a handle on the amount of debt they hold as this can snowball and get you into severe financial trouble.
Now you know where you stand. As we proceed you need to get some paper to keep notes on the items we cover in the rest of the site so that you can put together a plan that will work for you to reach your goals as quickly as posible.
We highly recommend that you use a program like Quicken to keep track of your finances. A feature of the software is to track your assets and liabilities. While we are not fanatical in all aspects of the program, we like the fact that we can produce an up-to-date net worth report with just a few clicks of the mouse.
References:Below are items and tools regarding net worth. We state throughout the site that you should not rely on any one information source when it comes to your financial health. Please use these tools and references as they can give you another perspective and more detailed information. If you do not have a Excel for spreadsheets please click on the PDF which is a printable version. To assist you we have included links to amazon.com so that can purchase the books and programs we recommend. Just click on the image, link or button. Blank Net Worth PDF Form
Blank Net Worth Spreadsheet
Don't have a spreadsheet program? Click Here for Help.
Use the link below to find more information on getting started.
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Last Updated ( Monday, 24 March 2008 21:30 )
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