Net worth is a term that gets thrown around a lot, but many people don’t know how to calculate it. Net worth is essentially the difference between what you own (assets) and what you owe  liabilities). It’s a great way to get an idea of where you stand financially. In this guide, we’ll walk through three easy steps for calculating your net worth:

Step 1) Gather your financial information.

The first step in calculating your net worth is to gather up all of the financial information that you can. You want to make sure that you have everything necessary for calculating your net worth and  then some, so be thorough in gathering this information.

• Get a printout of all bank statements for checking accounts or savings accounts (and any CDs) for the past year or two.
• Get a printout of credit card statements for all credit cards issued in your name during that period, including any store-branded cards (like Sears, Home Depot).
• Get a printout of investment portfolio details (or if you use an online broker like Vanguard or Schwab, get their report). If there are mutual funds involved, include the costs associated with them.
• Retirees: Make sure that you have access to all retirement account balances and their values as well as any pension information available to you.

Step 2) Calculate your assets, or what you own.

This is the most straightforward part of the process. You know what you own, so just add up the value of everything in your possession. If you have a job, list all of your assets that are not used for work—things like a car and personal possessions like jewelry or clothes. Be sure to include any assets that were gifted to you over time, such as an inheritance or birthday present (but not something like a Christmas gift!).

• Cash in bank accounts: $25,000
• Car: $35,000
• Vacation home: $750,000

Step 3) Calculate your liabilities, or debt.

Now that you’ve calculated your assets, it’s time to calculate your liabilities. The first thing you need to do is list all of your debts. This includes all credit cards, student loans, mortgages and car  loans. You should also include any other debt that you may have such as medical bills or utilities not included in the mortgage payment. It doesn’t matter if they’re paid off or not—as long as they  re still outstanding debts on paper (or electronic records), they will affect the total amount of money owed on each loan per month.

Next up: interest rates! The percentage rate at which these debts accrue is important because it can greatly affect how much money each one costs over time if left unpaid for too long (i.e., an unpaid credit card bill with an 18% interest rate will cost more than twice as much by year’s end than one with an 8% interest rate). If there’s a balance transfer fee involved with transferring balances from one credit card company onto another then include those fees into this step as well; otherwise skip down below where there’s another section explaining how best to manage them effectively!

Net worth is a great way to get an idea of where you stand financially.

Your net worth is a great way to get an idea of where you stand financially. It’s a snapshot of your overall financial health and can help you understand how much money you have and how much debt you owe, in addition to many other things. Your net worth will change over time as you make decisions about your money, so it’s important to take a look at it from
time-to-time.

The thing about net worth is that everyone has one, but not everyone knows what their number is! If you don’t know yours yet—or want to improve it—follow these easy steps for calculating your own personal net worth.

Summary Recap

Determining your net worth is a great way to get an idea of where you stand financially. However, do not get hung up on a specific number. Remember that your net worth will change from month to month and year to year  as you make new investments, pay off debts or inheritances come into play. However, having this information available will allow you to make better decisions when it comes time for financial planning or investment opportunities

Contact us if you have any questions!

Matt Ward, CFP®

817-238-6300

Matt.Ward@newcenturyinvestments.com

Schedule Call

The post Determine Your Net Worth in 3 Easy Steps! appeared first on New Century Investments.

Planning Tips for Long-Term Care

As our population ages, more and more baby boomers are finding themselves in the position of having to take care of their elderly parents. If you find yourself in this situation, there are some things you need to know about long-term care planning and estate planning.

Long-Term Care Planning: What it is

If your elderly parent needs help with activities of daily living such as bathing, dressing, eating, or using the restroom, then they will likely need long-term care. Long-term care can be provided in a variety of settings, including at home, in an assisted living facility, or in a nursing home.

Elderly parents sometimes resist the idea of needing long-term care, but it’s important to have a plan in place in case they do need it. You should start by talking to your parent about their preferences for long-term care. Do they want to stay at home? If so, what kind of assistance do they need? Are they open to the idea of moving to an assisted living facility or nursing home? If so, which one would they prefer?

It’s also important to talk about how you will pay for long-term care. Long-term care is very expensive, and most health insurance plans don’t cover it. There are several options for financing long-term care, including long-term care insurance or Medicaid to name a couple. You’ll need to explore all of these options to find the one that makes the most sense for your family.

Options for Long-Term Care Planning

Paying Out-of-Pocket

One of the biggest concerns for Americans as they age is how to pay for long-term care. The costs of long-term care can be significant and are often not covered by health insurance or Medicare. There are a few options available to help you plan and pay for long-term care, which we will discuss below.

Saving for the Expenses

One option for paying for long-term care is to simply save upfor the expenses. This can be done by setting aside money each month into a savings account, or investing in a long-term care policy. The downside to this approach is that it can take years to save up enough money to cover the costsof long-term care, and there is no guarantee that you will have enough when the time comes.

Long-Term Care Insurance

Another option for paying for long-term care is to purchase a long-term care insurance policy. Long-term care insurance policies are designed to cover the costs of long-term care, up to a certain limit. The benefit of this approach is that it can help to protect your assets in the event that you need long-term care. The downside is that long-term care insurance policies can be expensive, and they may not cover all of the costs of long-term care.

If you are considering purchasing a long-term care insurance policy, it is important to shop around and compare policies. Be sure to read the fine print carefully, and make sure that you understand what the policy covers and does not cover. Long-term care insurance often is an expensive way to save. It is also important to keep in mind that most long-term care insurance policies have age limits, so if you are older when you purchase the policy, it may not cover you.

Qualifying for Medicaid

If you are unable to pay for long-term care out of pocket, or if you do not have long-term care insurance, you may be able to qualify for Medicaid. Medicaid is a government program that provides health coverage for low-income Americans. To qualify for Medicaid, you must meet certain income and asset limits. If you qualify for Medicaid, you may be able to get help paying for long-term care.

To qualify for Medicaid, you must have a limited income and few assets. The income limit varies by state, but is typically around $2,000 per month. The asset limit is usually around $2,000 for an individual. This means that if you have more than $2,000 in assets, you likely will not be able to qualify for Medicaid. While there are some assets that are not counted when determining if you qualify for Medicaid, most likely if you have income or assets, you will not qualify initially. However, there are strategies that an attorney who specializes in elder law will know about. We know about them too. They consist of elder law strategies that help you protect your assets while still qualifying for Medicaid.

Estate Planning

Another important thing to think about when taking care of an elderly parent is estate planning. Estate planning is the process of organizing your finances and property so that they can be distributed according to your wishes after you die. It’s important to have an estate plan so that your loved ones don’t have to make difficult decisions about your finances and property
during a time of grief.

There are several things you’ll need to think about when creating an estate plan. First, you’ll need to choose someone who will be responsible for carrying out your wishes. This person is called a personal representative or executor. You’ll also need to decide how you want your assets to be divided among your heirs. Finally, you’ll need to create documents that detail your wishes so that there is no confusion after you’re gone.

Recap

Creating a long-term care plan and estate plan is essential if you’re taking care of an elderly parent. These plans will ensure that your parent is taken care of according to their wishes and that
their finances and property are handled according to your wishes after they pass away.

Take the next step!

Do you need help planning for long-term care? Do you have an elder parent that you care for? Then contact us at New Century Investments and we are happy to meet with you. We will listen to your situation and provide you with a roadmap for reaching success.

Contact us today! 

Matt Ward, CFP®

Book a call here!

Email: Matt.Ward@newcenturyinvestments.com

Phone: 817-238-6300

The post Taking Care of an Elder Parent? Planning Tips for Long-Term Care appeared first on New Century Investments.

• Cash flow planning
• Compliance & legal administration
• Tax and investment planning
• Protection of assets
• Growing net earnings

We help clients with cash flow planning, tax and financial strategies, and ensure that business deductions and profits are maximized. Call us to make sure you’re taking advantage of all the opportunities that you should be. See below for some informative articles on each of the 5 topics that businesses are concerned with:

Cash flow management and planning starts with solid recordkeeping. A bookkeeper enters the business income and expenses line items, keeping detailed accounting records. This makes financial and tax analysis much neater. Good cash flow management can help businesses solidify their plan and grow their profits.

(article on cash flow management tips for businesses)

Compliance & legal is another area that businesses must adhere to. Having a structured plan in place for compliance tasks and deadlines is helpful. When a business has controls in place to measure and enhance productivity, the business can reflect and adapt on a going-forward basis.

(article on ideas for managing compliance)

Tax and investment planning is among the top priorities of business owners. An effective business has a tax and investment plan. With proper tax planning, it’s possible to save 10% or more of income from taxes. It’s not only about what a business earns, it’s about what it keeps.

(article on tax planning strategies for business owners)

Protecting both business and personal assets is a top priority amongst most business owners. Structuring a business as a partnership vs S-corporation will have different levels of protection and tax planning.

(article on different types of business entities)

Growing net earnings is a business’ priority. Without a plan for growth, the business will likely not survive. Therefore, monitoring and projecting taxes/finances regularly, developing a business growth and compliance plan, and structuring the business as a multi-member LLC or S-corporation for example will offer greater liability and asset protection.

(article on Business Planning)

Are you taking advantage of all the opportunities to reduce your tax?

Often a business owner knows they are not taking advantage of all the different tax savings strategies, like the Qualified Business Income deduction, Health Reimbursement Arrangements, Tax-Deferred Retirement Accounts, and several more.

Time and time again we stress the importance of tax planning, and especially now with the impact of COVID and the economy.

Call today and set up a time to talk with us. We will sit down and review your business tax and determine if there are any additional tax savings you could be claiming. Call today! 817-238-6300

Matt Ward, CFP^®

The post Top 5 concerns of business owners appeared first on New Century Investments.