I hope you have watched my two videos on how you can think about your wealth using toy building blocks. If not, here are the links –
The Money House – Calculating net worth and wealth allocation
If you don’t have building blocks lying around the house, you can use my one page cheat-sheet for The Money House –
Once you have made a list of everything you own and owe, you can use the The Money House calculator under the ‘Plan‘ button/section. As you fill out each one of the four forms, a figure appears showing your ‘net worth’ i.e. your assets minus your liabilities. It also calculates the percentage figure you have in each block – this is your wealth allocation. Note the house gets re-drawn in proportion of how you much have in each block, so you can see if your house looks balanced or not, like we did with the building blocks. (This has been disabled and is being re-built).
At this stage, the aim of the exercise is to know what your net worth and wealth allocation is. Once we go through your goals and budgets, we can re-shape the house to achieve our goals.
Happy building/drawing!
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