A net worth statement is a list of your assets and debts at a specific point in time. A net worth statement can offer lots of useful information in time for making RRSP contributions and other financial decisions.
Calculate your Net Worth:
Assets: chequing accounts, savings accounts, TFSA, RRSP, non-registered investments, GICs, etc. Also: your house, car (get the “black book value”), vacation and or investment properties, etc.
Liabilities: mortgage (your home and vacation/investment properties), personal loans, credit cards, student loans, car loans, etc
Add all your assets together and your liabilities together. Subtract your liabilities from your assets. This is your Net Worth.
Sometimes when you are just starting out (if you’re just out of university, for example) or when you just bought your house and the mortgage is high, it is possible to have a negative Net Worth. The goal is to pay down the debts and hopefully the assets will increase in value, increasing your Net Worth.
Annual updates help you track the percentage change in your net worth, and see how well you’re meeting your financial goals. It should be going up every year. You want your assets to increase and your liabilities to decrease over time.
You may want to increase your savings, pay down more of your mortgage, or pay off your debt. All of these things will increase your net worth.