Determining Your Net Worth Before Purchasing a Franchise | VetCor
If you are in the process of researching what franchise might be right for you and determining what investment you feel comfortable making, one of the first things you will need to determine is your overall net worth.
Your net worth is a way to provide franchisors with a complete overview of your financial status, taking both your assets and liabilities into account to determine your financial health. Thankfully, you can determine your net worth with a few simple calculations to know where you stand.
How to Determine Your Net Worth
Your net worth can be simplified into your basic monetary value. You will start by adding up your assets—these will be things such as:
- Cash on hand and in bank accounts
- Personal property such as homes, cars and boats
- Retirement savings such as pension plans, 401(k) accounts and IRAs
- Investments, bonds and real estate
- Valuables such as furniture, art and collectibles
Once you total these things up, you will then total up your liabilities and subtract that number from your assets. Your liabilities will include things like credit card debt, your mortgage or car loan, and any other outstanding balances you have across your financial portfolio.
The number you arrive at after this will be your approximate net worth.
How to Improve Your Net Worth
While many people may feel like they are in a good fiscal spot, doing the math on their actual net worth may be surprising. Admittedly, there are many things that the strict analytical method of net worth calculations does not take into account, but it is a good financial overview overall.
If your net worth number is not in your target range, you still have some options to improve your financial health.
The most important thing you can do is to pay down debts. Even paying a little extra each month on credit card and loan balances can add up. Additionally, implement a savings plan so the balances on your accounts and investments are higher, and slowly but surely, you will tip the net worth calculation in your favor.
Are you ready to sort your finances and take the next step toward buying a franchise? We are here to help! Get in touch today to learn more about franchising opportunities with VetCor.