By: Brittany B. Manning, CPA, CFP®, Director of Wealth Management Services
Most of us know that net worth, or a personal financial statement, is a report that summarizes what we own and what we owe. But why do we spend time updating this report with our advisor and inquiring about assets and liabilities? Knowing your overall net worth is an important piece of the planning puzzle and helps to shed light on your overall financial health. Below are a few reasons we spend time reviewing net worth on a regular basis.
- Gives a complete picture of your portfolio. Liquid investment accounts are often only one part of a client’s net worth picture. Ensuring your financial advisor and team know all your assets and liabilities helps to align your liquid investments with your outside assets to form a complete portfolio with proper diversification.
- Goal setting. Seeing a full net worth report allows for a clearer discussion about your hopes and dreams – for both long- and short-term goals. Without information about all your assets and liabilities, it becomes difficult to have discussions around how you will be able to achieve different goals.
- Prioritizing savings and debt payments. Detailing loans outstanding is an excellent way to focus debt payments to put your money to work in the most efficient way possible. A complete list of debts and savings, alongside the interest rates and returns on savings accounts, allows your advisor to help prioritize where you should be allocating your savings and cash flows to eliminate debt in the most effective order.
- Visualizing progress. Regular net worth reviews help to demonstrate progress on your overall financial health over time. As you continue to save, pay down debt, and acquire various assets, you will see a measurable change in your net worth. This helps to keep your financial plan on track and is a great way to realize your progress towards your life dreams.
MCF’s focus on integrated holistic financial planning includes regular net worth updates. Our ongoing planning discussions allow us to continue to guide our clients along the journey of life to achieve all their hopes and dreams. We look forward to seeing you in the coming quarter to discuss your investments with MCF and review your entire net worth picture.
IMPORTANT DISCLOSURE INFORMATION
MCF Advisors, LLC (“MCF”) is an SEC-registered investment adviser. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by MCF), or any non-investment related content, made reference to directly or indirectly in this presentation will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from MCF. To the extent that a reader has any questions regarding the applicability of any specific issue discussed herein to his/her/its individual situation, he/she/it is encouraged to consult with the professional advisor of his/her/its choosing. MCF is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of MCF’s current written disclosure statement discussing our advisory services and fees is available upon request. If you are an MCF client, please remember to contact MCF in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing / evaluating / revising our previous recommendations and/or services.