Private Client Services

Do You Know What You’re Worth?

Posted on January 14, 2022 by

Margaret Amsden

Margaret Amsden

Share This

Share on facebook
Share on twitter
Share on linkedin
Share on email

Find out the Importance of Understanding Net Worth

Knowing your net worth can have a wide range of implications, and the implications will vary as you grow older.

Before we get too deep, let’s define a few terms:

  • Your net worth is the amount by which your assets exceed your liabilities, or what you have versus what you owe.
  • Assets include investments, bank accounts, brokerage accounts, retirement funds, real estate, and personal items like your car or jewelry.
  • Liabilities include your mortgage, loans, credit card debt, student loans, and any other debt.

If we go a little deeper, when we consider assets, they fall into several categories:

  • Income generating assets – These will grow and provide resources to live or provide for retirement. Income generating assets include things like your brokerage accounts, retirement funds and other liquid investments.
  • Real estate and non-liquid investments – These will grow in value and you may use them at the same time. They include not only your principal residence but also summer homes, collectibles and some jewelry.
  • Depreciating assets – These will need to be replaced multiple times in your life, which is something to consider when deciding how much to spend on them. Depreciating assets include cars, household furniture and other personal items.

When we consider liabilities, they generally fall into the same category of something that you want to pay off or pay down.

With this background, it starts to explain why we want to know our net worth.

  • It is a key benchmark for understanding your financial success
  • It is important in setting short, intermediate and long-term goals
  • It is a tool to help track the progress you are making
  • It is a tool that will help you be more mindful of your spending
  • It is a tool to help you make sound financial decisions

In other words, when you are young, understanding your net worth helps you know if you can afford a new car or a new home, and how much you might be able to borrow to accomplish these goals. As you continue to grow your career and family, it helps you track the progress you are making financially.  Finally, as you get older and closer to retiring, your net worth and the types of assets you hold will help you assess how close you are to being able to retire, or what debts you may want to pay off prior to doing so.

As such, regardless of your current financial situation, knowing your net worth can help you evaluate your financial health and plan for the future. Your net worth will fluctuate; however, it is not the day-to-day value but the long-term trend that matters. If you would like help determining your net worth, reach out to us today. Our private client services team can develop customized solutions to meet your individual goals.

Margaret Amsden


Leading the firm’s private client services group, Margaret’s strategic & educational approach fosters a culture of learning among clients and colleagues.

Related Insights

Private Client Services

Gifting to the Family: Don’t Wait too Long!

Posted on December 2, 2021 by

Margaret Amsden
This has been an eventful, record-breaking year for mergers and acquisitions, up 158% from the same time last year. Stock values continue to rise while interest rates remain at record lows, creating a prime environment to make deals and close transactions. Consider this guidance to help take advantage of the current tax code and valuation discounts before they disappear.

Private Client Services

Gifting to Reduce Tax Liability

Posted on November 18, 2021 by

Margaret Amsden
With the end of the year quickly approaching, the time for year-end tax planning is now, especially with the impending changes outlined in the Build Back Better Act (BBBA) set to be implemented at the start of 2022. One of the major changes affects high-net-worth individuals looking to make gifts to reduce a potential future estate tax liability.

Private Client Services

Is Your Wealth Being Managed by the Right Team?

Posted on October 4, 2021 by

Margaret Amsden
Though CPAs and wealth managers are two different advisors, together they play an essential role in helping individuals make short- and long-term financial plans. To make the best plans for their future, clients are discovering that a partnership between these professionals can further enhance their financial goals and performance.

Sign up for our newsletters

Get general business and industry-specific news and knowledge straight from our accounting specialists.

The Sound of Automation Podcast

The Sound of Automation Podcast

Industrial automation businesses are the driving force behind Industry 4.0, and Clayton & McKervey is here to help.

Insights & Perspectives

Data-driven decision making: 3 key insights for business owners

What does it take to build a data-driven business? For self-reliant leaders who feel they’ve hit a plateau when it comes to scaling a business, adopting a data-driven approach can be a breakthrough success strategy. Using data in a more focused way helps good engineers become good entrepreneurs. It’s about creating balance. Here we take a look at key insights for business owners when using data in decision making.

Read More

The Sound of Automation Podcast

Industrial automation businesses are the driving force behind Industry 4.0, and Clayton & McKervey is here to help.

Skip to content