Know your net worth to achieve the life you want

You don’t have to be a celebrity or business tycoon to know your net worth. In fact, everyone and anyone can - and should - know their net worth to gain an understanding of their financial health. Armed with this bit of knowledge, you could very well make wiser financial decisions to get closer to achieving the life you want.

Numbers Don’t Lie: Figuring out your net worth

Thinking about buying a new car? Or maybe you’re looking to shake up your investment strategy? Knowing your net worth before making any major financial decisions can help you decide whether to hold back or plough ahead.

Your net worth is calculated when you add up the value of everything you own (assets) and then subtract everything that you owe (liabilities). Some examples of assets are properties, cash, investments. Examples of liabilities are personal loans and mortgages, and other expenditures like insurance premiums and school fees.

Net Worth = Assets – Liabilities

That means your net worth is what you have left if you hypothetically sell everything you own and pay off all debts. This figure provides an honest overview of your financial health. If you have nothing left, or are in the red, you may want to rethink any big-ticket purchases. However if the figure is positive, you might feel more confident with your decision to explore new investment opportunities or take on a new line of credit for a car or for other big purchases.

Net worth as an indicator is a useful starting point to evaluate your current spending habits and identify areas to cut back from, save on or invest in. This helps you to create sustainable, short- and long-term strategies to achieve any personal aspirations based on a realistic list of ‘needs’, ‘wants’ and ‘wishes’.

Aligning Financial Goals With Personal Aspirations

Each of us have personal aspirations, which tie closely to our financial goals. Perhaps it’s early retirement, supporting your child’s higher education, or starting a business. Are you already on track to support the life you want or are there changes to be made?

Just like our aspirations change over time, our net worth also changes throughout our lifetime. For example, financial responsibilities and risk appetite towards different ways to grow and accumulate one’s wealth might look very different for a fresh graduate, a parent and a retiree.

“What we need to keep in mind is that net worth is merely an indicator of wealth. What’s more important is what you are using your wealth for. Are you using it to live the life you want? We create wealth as a way for us to achieve our goals and passions, and that’s why financial planning is important at every stage of our life,” says Matt Read, Head of Retail Banking, Citibank.

Hence, it is important to be flexible with your wealth strategy to achieve your goals at each life stage. Investment opportunities, which once served your needs may no longer suit your present financial circumstances or even risk profile.

Net Worth: Enabling Your Wealth Aspirations

Take the next step by having an in-depth conversation with a relationship manager to bridge the gap between present financial realities and your wealth aspirations, as they have the expertise to help chart a realistic plan to achieve your financial goals sustainably. They’ll also make the necessary adjustments based on changes to your goals or life circumstances.

As a collaborative effort, a relationship manager will create a tailored approach for you, and check in to talk about suitable plans that fit with your financial goals and risk profile. As professionals trained to look out for your financial interests, they take an objective view of your financial situation, help assess risks and highlight areas for improvement. Together, you can make informed decisions on the investments and plans that you have and unlock the potential to create the life you’ve envisioned.

Take the first step today. Calculate your net worth and update and grow your wealth goals.

Start your bespoke wealth experience with Citigold. Find out more to receive personalised investing guidance from their global team of experts and make informed personal finance decisions for your future.

Disclaimers

This article is for general information only and is not intended to be a forecast of future events nor a guarantee of future results and should not be relied upon as financial advice. All views and opinions are as of the date hereof, and are subject to change based on market and other conditions without notice. The article has no regard to the specific objectives, financial situation and particular needs of any specific person. It is neither an offer nor a solicitation to purchase, nor endorsement or recommendation of any products or services mentioned therein, and the products or services mentioned may or may not be offered by Citibank Singapore Limited, its related entities and their respective directors, agents and employees (together "Citigroup").

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