How much of the unit does the unit owner own, and what constitutes "common property" of the condominium? In other words, who pays for an element like a window if it needs to be replaced or repaired?
If you asked 100 different people what their net worth is, 95 of them would probably not be able to give you an accurate figure. "Net worth" is the amount by which the total value of your assets exceeds the total amount of your liabilities.
Net worth is an indicator of your financial "health". It tells lenders whether you can pay back the loan you're applying for. Financial planners use it as the basis for your retirement plan. If you're going through a divorce, you'll have to provide your soon-to-be-ex's lawyers with a personal net worth statement as part of the settlement negotiations.
Your assets include all items which you own an interest in and all debts which are owed to you which have an actual dollar value, including:
When calculating the value of your assets, use the current market value - in other words, what it's worth today, not what it was worth when you bought it or what it might be worth at some point in the future.
Your liabilities are all of the debts you owe or may be responsible for paying, which includes:
You can use this simple net worth calculator from the Ontario Securities Commission to help you determine what your current net worth is. There are a number of similar tools available online.
If you're not happy with the final figure you arrived at, DON'T PANIC. There are ways to improve that bottom line. The simplest method is: Increase your income and reduce your expenses.
If you're not sure how to do that, get some expert help. There are many free resources available online with helpful information, downloadable tools and resources to help you get your finances on track, so that the next time you calculate your net worth you'll be happier with the result.
Image by Steve Buissinne from Pixabay
Your financial needs change throughout your life as well. What was important to you at 25 may not matter at all by the time you hit 50. The priorities of middle age wouldn't even have entered your mind back then. And your personal and estate planning strategies should change right along with those life stages.
