Your net worth and financial health

There is no doubt that your net worth is a great indicator of your financial well-being. The old adage “it’s not what you do, it’s what you keep” is an absolute financial top 5 in my book.

As a financial planner, I have seen high income people with low or negative net worth. In Texas, they call it a “big hat and no cattle.” It is a difficult situation from a financial planning point of view.

In many cases, “retail therapy” has gone to a great extent. If you always bloat your lifestyle along with your increases at work, you’ll always find yourself on the debt treadmill. If you are guilty of spending at unsustainable levels, it is not too late to make positive changes in your financial life.

As an added bonus, paying off debt is a great feeling, and from my conversations over the years, it seems people who live within their means seem much happier overall. They can make a difference in their community through charitable contributions, can send their kids to college, and take time for the things that really matter in life, like friends and family. I have nothing against buying boats or RVs but just make sure you can afford them and the time these hobbies require.

To calculate your net worth, simply add up all of your savings and investments along with your other assets such as real estate and automobiles. From there, subtract any debt or mortgage obligation you have from the assets column. For example, let’s say you have $ 200,000 in savings and $ 800,000 in investment accounts. Your house is valued at $ 600,000 and your other possessions, including cars and a cabin in Vermont, are worth $ 400,000. Your total assets in this case are $ 2,000,000. Now subtract all the debts you have. In this example, this person has an outstanding car loan of $ 20,000. The aggregate net worth in this case is $ 1,980,000 ($ 2,000,000 – $ 20,000 = $ 1,980,000).

If you want to increase your net worth, you have a few options to achieve it. Set a goal to save more money or pay off your debt. I would also add a pinch of patience as you strive to grow your net worth as market values ​​fluctuate along the way causing your net worth to fluctuate.

Good luck!

Eric Tashlein is a Certified Professional Financial Planner, Founder and Financial Advisor of Connecticut Capital Management Group, LLC, 2 Schooner Lane, Suite 1-12, in Milford. He can be reached at 203-877-1520 or via This is for informational purposes only and should not be construed as personalized investment advice or legal / tax advice. Please consult your advisor / lawyer / tax advisor. Representative of the Investment Advisor, Connecticut Capital Management Group, LLC, a registered investment advisor. Connecticut Capital Management Group, LLC and Connecticut Benefits Group, LLC are not affiliated.

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