Do you really know how much you are worth? Not how much you have in your account … but what is, after putting all your debt, assets and investments in one basket, your net worth? It could be really useful to you.
“If two applicants earn the same salary, but one has a net worth of $ 50,000 and the other has a net worth of – $ 25,000, it is certain that the first applicant will have easier access to credit and probably to lower interest rates, ”says Sun Life financial security advisor Alexandre Demets.
To calculate your net worth, you need to factor in all of your assets and liabilities. By knowing what you have and what you owe, you will be able to have an accurate picture of your financial situation.
Here is what is in your assets:
- Your checking account balance
- Your RRSP
- Your TFSA
- Your unregistered savings
- The value of your property (s)
- The value of your vehicle
- Valuables you own
Here is what is part of your liabilities:
- Your mortgage
- Your credit card balance
- Your line of credit
- Your loans
“When you are young, say 25-30 years old, this is where your net worth is going to add water to the seriousness of your case,” explains Demets. If you want to take out a loan, if you want to buy real estate, etc. ”
If you’re buying a home, for example, you need to subtract the mortgage amount you received, but inflation and your mortgage payment will cause your equity to rise over time. It is a sort of forced saving.
By doing these calculations, you will get an idea of your net worth relative to other Canadian citizens and relative to people in your age range. This will allow you to make more informed financial decisions.
To get a clear idea of your financial picture, you can use Sun Life’s online tool just here.
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