Net Worth and Cash Flow Statements

Net Worth and Cash Flow Statements

October 2020 Ecomonic Update photo 2-trimmed
Reviewing and coordinating your assets with your financial plan is part of the financial planning experience. It can give you a higher sense of confidence and economic well-being. Your net worth and cash flow financial statement becomes a part of this experience. 
Reviewing and coordinating your assets with your financial plan is part of the financial planning experience. It can give you a higher sense of confidence and economic well-being. Your net worth and cash flow financial statement becomes a part of this experience. 
October 2020 Ecomonic Update photo 2-trimmed

A personal net worth statement is a snapshot of your current assets and liabilities. 

Assets include investment accounts, retirement accounts, real property, and personal property. Assets also include cash value in a life insurance policy, bank accounts, and private debt you own.

Liabilities include mortgages, personal property loans, personal uncollateralized loans, private debt, and credit cards. Each asset and liability is part of a net worth statement. 

Clients entering retirement generally have a positive net worth, which means that assets exceed liabilities. 

A net worth statement can represent a sense of accomplishment for many clients. For others, it could feel like more work is needed and that they are far from ready for retirement. 

Cornerstone will help you assess your assets and liabilities’ strengths and opportunities during the financial planning experience and what it means to your retirement picture.

Your cash flow statement becomes the backbone of your success in retirement. A cash flow statement is an annual snapshot of your income and expenses. The difference in your income and expenses will result in a household with positive yearly cash flow (you have more income than expenses) or negative annual cash flow. 

Negative cash flow is typical for retirees who no longer have earned income. 

Most times, Social Security income is not enough to alone cover retirement expenses. To cover this retirement “expense gap,” retirees will need to draw income or capital from assets they own, which will impact their net worth. Although these are separate documents, they are equally crucial to your retirement future. 

Financial statements are excellent tools in the financial planning and plan review process. We often introduce financial statements to our clients for their first time. 

A regular review of these statements can benchmark your plan’s progress and serve as a useful tool for accountability.

Financial Statements might seem like a “big boy pants” activity. When you work with Cornerstone, you are indeed working with the big boys, figuratively speaking.

Let's Talk.

Get your complimentary appointment with one of Cornerstone's professional financial advisers today, and get real clarity on the most important money decisions you may ever make.

Looking for Financial Confidence in Retirement?

Contact us for your complimentary consultation today, and take control of your financial future in retirement

Good Things Come to Those Who Click!

Financial Guidance

Cornerstone Wealth Management is recognized for its delivery of independent, comprehensive financial planning. This essential work goes beyond traditional investment planning.

In Search of Financial Guidance for Life Transitions?

Contact us for your complimentary consultation today, and take control of your financial future in retirement.