Those who are highly successful might also be the busiest, with the most responsibilities on their plates. You would think that earning a high income would also translate into excellent money management skills, and it usually does… But sometimes, those who are busy juggling responsibility are the ones who make significant financial blunders. It often boils down to a matter of time: Do you have the time to research important decisions before making them?
Due to busy careers, many top earning professionals haven’t set aside time to create a net worth statement. This document lists all assets and liabilities (debts) for the household, and it’s more important than it might sound on the surface.
A net worth statement helps you in more ways than you might imagine, such as…
Estate planning. Imagine that you create a Will, or make other estate planning decisions, without carefully analyzing how much you’re actually worth. After your death, your beneficiaries receive life insurance payouts as well as other assets you have passed to them… And they exceed the estate tax limit, triggering a massive tax burden. A full understanding of your net worth could have help you avoid this situation.
Budgeting. Your net worth statement will also help you understand how you have been spending your money. Surprisingly, many high-earning professionals are the same people carrying large debt loads. The temptation to spend can be overwhelming when you haven’t set aside time to analyze your assets and debts, and to set a budget.
Setting financial goals. Like everyone, you set certain financial goals. Your net worth statement can help you see the bigger picture, and help you determine whether you’re on track to reach those goals. For example, a comparison of assets to liabilities might show you that your overall financial outlook is not as balance as you believed. A net worth statement brings everything into focus, so that you can prepare for a more secure future.
We can help you compile a net worth statement, or accomplish other financial planning goals. Just give us a call and we’ll help you get organized, understand your assets and liabilities, and begin making the decisions that help you achieve your goals.