A survey by Forbes Magazine of the richest people in Africa ranked Deputy Prime Minister Uhuru Kenyatta 26th with a net worth of $500 million, approximately KES 42,480,000,000. Business tycoon Chris Kirubi was ranked 31 with a net worth of $300 million, approximately KES 25,488,000,000.
So, do you want to know how much you are worth i.e. your Net worth?
Allow me to define what ‘Net Worth’ means- It is the difference between between your assets and liabilities. Do you owe more than you own? If so, you are technically insolvent!
Calculating your net worth is easy. All it requires are some basic financial information regarding the things you own and the debt that you owe.
Here’s how you do it:
- List your largest assets. These could include your home, vehicles, pieces of land. Make sure you use accurate estimates of their current value.
- Gather your latest statements for your more liquid assets. These include you current and savings accounts, cash or other investments such as insurance accounts.
- List your personal items that may be of value. These could include jewellery, music instruments, valuable electronics.
- Add up all the assets you have listed in the first three steps . The total represents your total assets.
- Now compile your liabilities, starting with the major outstanding liabilities such as the balance on your mortgage or loans and list those.
- List all your personal liabilities such as credit cards debt, HELB loan, or any other debt you may owe.
- Add up all of your liabilities to come up with a total.
- Finally, subtract the total liabilities from the total assets and you will have your net worth.
What’s your net worth? are you technically insolvent?
Regularly checking your net worth helps in not only monitoring your financial status but also helps determine if you are making financial progress or not.