DAY 5 PHOTO

New to the Live Richer Challenge: Net Worth Edition? Learn more about it HERE.

Missed some of the Challenge tasks? Catch-up then come back…

Day 1: HEREWhat does net worth mean?

Day 2: HEREWhy is net worth important?

Day 3: HEREYour Liabilities

Day 4: HERE: Your Assets

 

Week 1: A Wealthy Mindset

Today’s Easy Financial Task: Calculate your net worth.

How to rock this task:

  • Calculate your net worth
  • Calculate your debt-to-asset ratio

 

Welcome to Day 5 of the LRC: Net Worth Edition!

This week is flying by, right?

We’re five days in and crushing this Challenge!

How does it feel now that you’re getting a better handle on managing your net worth?

*insert total body roll*

Understanding how net worth works is taking you closer and closer to financial independence.

The feeling of being free from money worries is one that I want for you, and the lifestyle you’re on the journey to having when you complete this Challenge.

Woot, woot!

Let’s keep going.

 

Calculate Your Net Worth

For the last two days, you’ve been writing down your liabilities and your assets.

Be sure to head back to those days if you didn’t complete Day 3 and Day 4.

You need to complete the tasks for those days before doing the task today. You should have completed the liabilities and assets columns on the Your Net Worth worksheet.

Again, you can find that worksheet HERE.

To calculate your net worth, subtract your liabilities from your assets. 

Here’s the equation:

 

Assets (what you own of value) – Liabilities (debt) = Net Worth

 

Put your answer to this equation in the space for net worth on the worksheet.  

Take a moment today to reflect on this number.

You may even want to go back to your goal for this Challenge to make adjustments.

The tasks for the rest of this Challenge will be giving you actionable steps you can take to increase your net worth! *insert Harlem shake*

You’ll choose a few of these action steps to add to your Goal Sheet later on.

But, before you go anywhere….

You have one more task for today!

 

Calculate Your Debt-to-Asset Ratio

There’s a second equation I want you to do. It’s called your debt-to-asset ratio.

Your debt-to-asset ratio is a comparison of how much debt you’re carrying to the assets you have.

The calculation for the debt-to-asset ratio is:

 

Your Debt / Your Asset = Debt-to-asset ratio

 

There’s another space on the Your Net Worth worksheet to place this number.

Of course, the lower your debt-to-asset ratio the better.

Checking your debt-to-asset ratio every so often can keep you aware of how much you’re borrowing compared to how much you’re growing your assets.

If you notice that you’re consistently doing more borrowing than saving or investing, you need to make some changes.

 

Typically this is an exercise that business owners and companies do in order to determine the financial health of their organization. I believe that you should begin to think of your finances in a similar way.

You can learn more about your debt-to-asset ratio here.

 

What to Do After Getting Your Results

Take a long, deep breath.

If you’re a recent graduate or still repaying student loans, you may find that you have a negative net worth or high debt-to-asset ratio.

Shooooot, you may also have a significantly lower net worth and higher debt-to-asset ratio if you’re in the middle of your career or a higher income earner with a sizeable amount of debt.

Regardless of your situation, don’t freeze up and don’t panic.

You being here and taking part in this Challenge means you’re already committed to moving in the right direction.

Go you!


NEXT WEEK is all about increasing your net worth. I’m going to give you tools throughout this Challenge that you can use to grow your assets and net worth. Yup!

—————————————————–
Sidebar: Did you know that I have an online school, too?
Yup, the Live Richer Academy.

There I and an amazing group of experts and instructors share much more in-depth tools and courses to help you. 

Resources include classes on repaying debt, saving, starting a business, investing, repairing your own credit, side hustling, couponing, manifesting your dream, and much, much more! You can learn more about the Live Richer Academy HERE: www.JoinLRA.com

———————————————————-

Tomorrow and the next day will be for review and encouragement.

Are you a little behind on tasks?

No worries!

You have two full days to go back and catch up with tasks.

 

How’s your accountability partner(s) doing?

Remember, if you need help during today’s task reach out to them. You can continue the discussion in the comments below as well. I love to read comments!

 

Also, tell the good folks on twitter what you’ve learned today. Let’s get the Challenge trending!

Today, I calculated my net worth and debt-to-asset ratio. Woot woot! Day 5: #LiveRicherChallenge… Click To Tweet

Live richer,

Tiffany

 

You can reach out to me here:

Twitter: @thebudgetnista

Instagram: @thebudgetnista

Facebook: The Budgetnista

Private Forum: Dream Catchers : LIVE RICHER

 

P.S. Don’t forget to get your free Live Richer Challenge: Net Worth Edition Starter Kit. GET IT HERE.

P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.

LRC Net Worth Calendar
Want to work through the Live Richer Challenge: Net Worth Edition in a workbook? It’s part of a bestselling series!

Click the link below and get your copy.

  • Tamara Blackburn

    I was truly dreading this task because I knew my debt/asset ratio would be high. But I’m gonna rock it and look back on this in
    December then cry tears of joy.

    • Exactly!! What you do NOW, will determine how you live LATER

    • Krisna Guyton

      Same here! We’ve got this though!

    • Jeanette

      Amen

  • Denise 84

    This one was really hard for me since I have made some bad choices. I noticed that my debt to assets ratio is really high, but I will keep pressing on with this challenge. Thank you so much Tiffany for sharing this information with us. I desire to be debt free from credit cards and school loans.

    Thanks again!!!

  • Annette Houston

    Thanks Tiffany this has really made me want to do better with the little income I have. I’m 42 and I feel terrible because I have no assets. I hope it’s not to late.

    • Shreta Coleman

      I felt the same way.. I just. turned 42 last week and felt I should be doing better but I ran across this quote from Warren Buffet.. “Switch your mindset from problems to solutions. See blessings instead of lack. When you change how you look at things, your life transitions.” Both of us have taken the 1st step and decided to make changes. Best wished to you on this journey.

      • Exactly! That fact that your here means that change is coming.

      • Annette Houston

        Thank you so much

    • It’s NEVER too late. You’re very welcome. Next week I show you how to increase assets.

      • LaRhonda Turner

        I’m super excited about next week’s tasks! I watched one of your videos where you said you bought a property cash. I can’t wait for you to show me how you did that!

  • Lisa Dent

    My liabilities and assets are close in number so I know my ratio is high… But, I’m ready to exceed my goals this year!
    This quote from above is definitely true for me:
    “If you notice that you’re consistently doing more borrowing than saving or investing, you need to make some changes.”
    Gotta stop spending, gotta learn to invest…

  • Twyla McDonald

    Lawd, this debt to asset ratio is painful, but I’m about to nip this right in the bud!

  • Mara Reid

    This exercise is really an eye opener! I didn’t realize my debt to equity ratio was this high. I’ll consider this my ground zero and my day 1 to building generational wealth.

  • Layla

    Wow, this put my finances in a much clearer perspective. I’m a recent college graduate so it makes sense that my net worth and debt-to-asset ratio are trash lol. But I look forward to learning how to improve them with this challenge.

  • Karin Spratt

    Thank you…I made the decision to get my finances in order. I know its going to hurt and be uncomfortable because it will show how I have been doing with money. I got my copy of the Net Worth edition book and will reading that over the next several days so I can be ready to Live Richer!!!

  • Morgane Bruce

    I’m one year out of grad school, doing the best I can. I’m working until 35 (I’m 27 almost 28) to pay off my student loan debt. I’m sure I can do it in seven years, maybe even five!

    • Remember to focus MORE on growing wealth. With wealth you can get debt free & have financial freedom.

  • onetravelingdiva

    Tiffany, what is a good debt-to-assets ratio?

    • Andrea Tarver

      Great question, I would like to know this answer also.

  • Jay

    Today was a definite eye opener! I will be successful and accomplish this year’s goals without a doubt!

  • Gabby Robinson

    I calculated my net worth which is a small amount but in the positive (Thank you Lord!). But my debt-to-asset ratio is just too high – 80%. However, I know that this is just motivation for me to reduce my debt AND build my wealth. Seeing the numbers on paper makes a huge difference. Great motivator step it up and make a change!

  • Christina Wade

    I finally finished! This was a huge eye opener. I have a lot of work to do!

  • Deborah Ivey

    My liabilities are so high compared to my assets. So that means my debt to income ration is high. I need to do better will getting it down.

  • Aquillin

    I don’t have any assestssssss!!!! 😩😩😩😩 It would be like this for long tho! #fact

    • Aquillin

      wont**

  • Jalisa Ray

    Wow 704% Debt to Asset Ratio… 😳😳😳 Yep, I’ve got to do something different…

  • Pamela Hudson

    My debt to asset ratio is horrible. It is making me feel sick.

  • McKenzie Green

    How do I recover from a -$507,038.80….I’m not panicking, just wanting help on how to get this is the positive and get to financial freedom…I am open to advice…A big chunk of this is a home mortgage and student loans…Actually all of it is…

    • LaRhonda Turner

      Just want to give you a little encouragement. Since it’s all home loan and student loans, maybe you can throw a little more than the required payment at each every month. Even if it’s just an extra $20 or less at first. Throw the most extra to the higher interest loans. These little extra payments help pay down your principle faster, will save you money on interest and will get that negative to a positive faster. As you can contribute more to your extra payments do it. You will get out faster than you know. Be encouraged! You got this!

      • McKenzie Green

        Thanks…I would like to sale my home or use it as rental property..I know I could rent it for 1400-1500 easy because of the area its in. Just throwing out options…That would help me tremendously with cutting down my debt…

  • Nicole Ballen

    This wasn’t a surprise because I knew my debt was high. I am still digging because I think my assets may be higher. I have an old retirement account and I have no idea what’s in it.

  • Coach Duff

    I just finished calculating my net worth and I was surprised at how deep in the whole I am. I’m hoping to climb out of this red whole by the end of the year.

  • Michaela Cornwall

    My debt to asset ratio is very high but that’s why I’m here…to learn how to turn this all around and live the next half of my life better than I have the first.

    • Jeanette

      Yes

  • Nyla K. Moore

    I need help understanding the debt to asset ratio. Mine was 1.6 percent if I did this correctly. What does it mean?

  • Nicole Garris

    dido. a change will come. let’s get it.

  • Jeanette

    Math is not my forte. Just trying to make sure I’m calculating this correctly. Not worrying about sharing the numbers, it is what it is. Just need to make sure I’m doing this correctly. It’s debt divided by assets correct? So 132,113.18 divided by 45,164.63 which equals (based on my calculator) 2.9251469568. Which translates to 292.51%. Is this correct???

  • Lonnie

    Keeping it 100??? I just did my debtassets ratio….I need a drink. And then some cake. I knew I was in debt but not like this!! This put things in perspective. OK big girl panties time, I will make it out of debt and into wealth building with Gods help!!

  • Dorris

    What is an acceptable debt to assets ratio. My assets were 167,500 and my debt is 29,500. When I divided, it came out to .176119…. Am I supposed to move the decimal over. Is my ratio 17.6%. Thanks. .

  • T Beard

    OMG!! My debt to income ratio is very high. A real eye opener. I knew what I owe and what I needed to do but hadn’t quite figured out how to attack this task. Staying positive and praying for Discipline, Determination and Dedication.