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In keeping with my little Road Map theme, it's now time to figure out where you are financially. Kinda like those little maps at the rest area with a dot showing where you are.

In other words, it's time to figure out how much money you have and what you buy with it.


Exercise 3: What are your assets?

An asset is a fancy accountant word for anything you own that has exchange value. This exercise basically asks: if you sold all your worldly possessions, how much would you have? Bean-counting geeks divide assets into three types:

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1. Cash and cash equivalents

This is basically money that is readily accessible. Let's hope you have one or two of these. If not, we'll get you set up a little later. The Notes area is for things like interest rates, and to indicate if it's a joint account with a spouse or partner, just theirs, or just yours.

Cash & cash equivalents Amount.... Notes............................................
Cash on hand . .
CDs less than a year before maturity . .
Money market accounts . .
Savings accounts . .
Checking accounts . .
Subtotal . .

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2. Invested assets

Most of us have few (if any) of these things. The more common ones are listed at the top. These items are generally used as long-term investments, often for retirement. Your employer may offer one or several of these, and you probably get an annual report showing your account value. If you aren't sure, talk with the people who handle benefits where you work.

If you have some of these through your employer, you may not be fully vested. That means you haven't been at the company long enough or met other requirements to be entitled the full amount of your plan. For instance, I have about $10,000 in a work profit sharing plan, but I'm only 40% vested. If I quit and cashed out today, I'd only get $4,000, and that would be taxable. If you cashed in an IRA, the government would take over half in excise taxes. That's the sort of thing they mean when they say "substantial penalty for early withdrawal." So, when you figure your assets, keep in mind that the cash value may be less. Again, if you aren't sure, talk with the people who handle benefits where you work.

Invested assets Amount.... Notes............................................
401(k) or other retirement plans (pensions, etc.) . .
IRAs (individual retirement accounts) . .
Profit-sharing plans . .
Stock bonus plans or ESOPs (employee stock ownership plans) . .
Keogh plan (for self-employed) . .
Vested pension benefits . .
Stocks . .
Life insurance with cash value . .
CDs more than a year before maturity . .
Corporate bonds . .
Federal agency investments like Ginny Maes . .
Precious metals and gems . .
Collectibles bought as investments . .
Investment real estate/land . .
Limited partnerships . .
Municipal bonds . .
Ownership interest in a business . .
Pending gifts or inheritance . .
Real estate investment trusts . .
Tax-sheltered annuities . .
Unit trusts . .
U.S. savings bonds . .
U.S. treasury securities . .
Other (like loans owed to you, etc.) . .
Subtotal . .

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3. Use assets

As the name indicates, these are things that get used rather than set aside to increase in value. Basically, it's everything in your house. Many use assets change in value, so you must find out their fair market value today, and not when you bought them.

Use assets Amount.... Notes............................................
Home/condo . .
Art and antiques . .
Boats and other vehicles . .
Cars . .
Collections . .
Computer and accessories . .
Home furnishings (appliances, furniture, etc.) . .
Personal property (clothing, jewelry, etc,) . .
Small business equipment . .
Vacation property . .
Subtotal . .

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4. Totals

This last part's kinda fun!

Assets

...Amount....

Cash/cash equivalents .
Invested assets +
Use assets +
Total assets =

Order the interactive spreadsheet of this financing information.

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