Update your Personal Balance Sheet for 2015…

The beginning of a new year is a great time to update your personal balance sheet. The excercise is invaluable in your personal financial planning as it creates a snapshot of your actual worth in relation to what you own and what you owe. Your so called “Net Worth”.

OWN – OWE = NETWORTH

All it takes is a sheet of paper with two columns listing the current value of all your assets on one side and your liabilities (the outstanding loans) on the other side.

Subtracting the total liabilities from your total assets leaves you with a current value of what you are actually worth. This net worth provides you with a realistic view of how well to you are doing with your financial planning. If the figure is growing year on year then you are on the way to improving your wealth. If it is not growing you are effectively getting poorer.

Bear in mind that your net worth needs to improve above the inflation rate to keep its value. So if inflation is running at 6% then your net worth should being improving above this rate year on year to keep your net worth value real.

Ways to improve your net worth are found in: Reducing your liabilities. Targeting your loans and getting rid of them sooner. Interest on debt is often higher than the return.

Investments that grow consistently over time should be targeted. Especially, those which compound your growth. In other words, investments which produce returns which you reinvest, effectively buying up more. Compound interest is a magical phenomenon in the financial world and needs consistent positive returns over the longest possible time to make its magic.

Read more from Paul Roelofse at www.investforlife.co.za


This article first appeared on 702 : Update your Personal Balance Sheet for 2015…


Read More
All international eyes are on #ANC54 says international think tank analyst

All international eyes are on #ANC54 says international think tank analyst

Chatham House Africa programme researcher Christopher Vandome explains impact of the election outcome on international relations.

#ANC54 delayed start, registration still underway

#ANC54 delayed start, registration still underway

EWN's Gaye Davis reports live from the 54th ANC National Conference at Nasrec which was set to kick off at 9am Saturday morning.

Capetonian tackles 3300km canoe trip to raise awareness for NGO

Capetonian tackles 3300km canoe trip to raise awareness for NGO

'I’ve always had that urge to do something no one has ever done before.' - Elizma Fuller

This is why the movie 'Wonder' can teach our kids a lot

This is why the movie 'Wonder' can teach our kids a lot

'It’s a really nice story about why you shouldn’t treat people differently because they look different.' - Gayle Edmunds.

[LISTEN] This had never been done before says Professor Clarke

[LISTEN] This had never been done before says Professor Clarke

Professor Ron Clarke hosted a press conference to reveal the recent excavation of the full skeleton of Little Foot which took 20 years.

[LISTEN] 'We are dealing with an outbreak of Listeriosis' - Dr Thomas

[LISTEN] 'We are dealing with an outbreak of Listeriosis' - Dr Thomas

Head of the Centre for Enteric Diseases at the NICD Dr Thomas says that Listeriosis is problematic because it isn’t notifiable.

Popular articles
Van Damme: De Lille has until Monday to respond to maladministration claims

Van Damme: De Lille has until Monday to respond to maladministration claims

The DA has suspended Patricia de Lille from party activities but Eusebius McKaiser says its statement 'is clear as mud'.

LISTEN: Father of drowned toddler speaks of dangers and heartbreak

LISTEN: Father of drowned toddler speaks of dangers and heartbreak

Connor Weber, fell unnoticed into a bin of water and drowned.

Fund manager lays criminal charges against former Steinhoff CEO Markus Jooste

Fund manager lays criminal charges against former Steinhoff CEO Markus Jooste

The Money Show’s Bruce Whitfield interviews Benguela Global Fund Managers Chief Investment Officer Zwelakhe Mnguni.

The Steinhoff Story: from humble beginnings to billions

The Steinhoff Story: from humble beginnings to billions

Financial Mail editor Rob Rose chats to Eusebius McKaiser about how Steinhoff became the retail giant we know, before the fall.

Zuma order to pay costs of failed legal suit, a damning indictment: Law expert

Zuma order to pay costs of failed legal suit, a damning indictment: Law expert

Law professor at Wits says the President has now been warned to consider his options very careful when playing delaying tactics.

Predictably awesome new Nando's ad reminds South Africans ‘we can fix our sh$t’

Predictably awesome new Nando's ad reminds South Africans ‘we can fix our sh$t’

Watch the Guptas pack their bags and run in Nando's inspiring new advertisement.

How businessman Max Lichaba struck gold with his jewellery company

How businessman Max Lichaba struck gold with his jewellery company

Entrepreneur Max Lichaba built his own empire and is the CEO of Lichaba Creations and several other businesses. This is his story.