Assessing Your Assets

Most of us think of our personal assets as just “things” we’ve acquired over time. But in reality, they are more like valuable tools in a toolbox. Each tool serves a purpose and helps us build, fix, or create something in our lives.

Investment portfolios grow to build retirement nest eggs, savings accounts are there to cover emergencies, and our house provides a home for our family.

When framed in this manner, it becomes clear why it is important to assess our assets at least annually, including:

1. Tracking progress and growth: Just as you might monitor your weight or financial portfolio, regularly checking your assets allows you to see how they're changing in value and how your overall net worth is evolving. This helps you understand the effectiveness of your financial decisions and provides opportunities to adjust your strategies if needed.
2. Staying organized and prepared: A clear picture of your assets simplifies record-keeping, insurance claims, and estate planning. Regularly updating your asset inventory ensures that it's accurate and readily available in case of emergencies or unexpected events.
3. Updating your goals and priorities: Life goals and priorities evolve over time. Regularly assessing your assets ensures they continue to align with your aspirations. Your investment portfolio may need adjustments to prioritize retirement planning, or you may want to focus on acquiring new abilities and skills for a career change.
4. Boosting financial confidence: Understanding your wealth and its composition fosters a sense of financial security and control. Knowing what you own and its potential empowers you to make informed decisions, navigate economic uncertainties more easily, and pursue your goals more confidently.

While an annual review is valuable, remember that life can be unpredictable. Significant events like job changes, inheritances, or major purchases might warrant additional asset assessments throughout the year.

Overall, assessing your personal assets annually is an essential practice for navigating today’s dynamic world. It provides valuable insights, empowers informed decisions, and ultimately lays the foundation for a secure and fulfilling future.

You can conduct an asset assessment with one of the many tools on the market today, such as Mint, Quicken, or even the trusty Excel spreadsheet. Or, contact a professional asset manager for more complex portfolios to help you navigate your toolbox and start 2024 off feeling confident about your personal assets.