What financial assets do you have? How much do you owe? A net worth statement is a financial balance sheet, the total of your assets (what you own) minus your liabilities (what you owe). Preparing a net worth statement will help you assess your overall financial situation and make wise decisions.

The asset column is divided into the following groups:
1. Cash — Those things that either are or can be easily converted to cash. Keep in mind that cashing in certificates of deposit (CDs) before they mature may result in an interest penalty.

2. Investments — Financial assets that can be cashed in or sold for their current market value. Prices will fluctuate with market conditions. Annuities may have surrender penalties. You may also owe income taxes and early distribution penalties on money taken from annuities.

3. Retirement Assets — Assets that are held in tax-advantaged retirement accounts, such as 401(k) plans, IRAs, and pensions. You will owe regular income tax on withdrawals from tax-deferred accounts, and withdrawals before age 59-1/2 usually involves an additional 10% penalty.

4. Personal Assets — Real estate and personal property that can be sold but usually not as quickly as other assets. Assets such as vehicles, furniture and appliances usually depreciate in value; so they are worth much less now than when you purchased them, even if they are still in good condition.