Question

Scenario: You are 30 years old and feel like you are getting nowhere with your financial goals. At the end of each month, you have a hard time understanding where all your money went. You have decided it is time to take a hard look at your current financial status. You currently have $80 of cash on hand, a checking account with a balance of $600, and a savings account containing $1,500. You own a small condo currently worth $120,000 with a mortgage on which you still owe $100,000, and on which you pay $600 per month. You own personal property (furniture, television, computer, etc.) worth $8,000. You have inherited Treasury bonds from your late aunt worth $12,000. You participate in a 401(k) retirement plan, now worth $30,000, in which you are 100% vested. You own a car originally valued at $28,000, now worth $12,000, on which you still owe $1,200, and make monthly payments of $250. Finally, you have credit card debt of $2,500 on which you pay a constant $125 per month.

Answer 1

Answer:

Monetary assets = Cash + Checking account balance + Savings account balance = $80 + $600 + $1,500 = $2,180

Tangible assets = Condo + Personal property (TV, television, computer etc.) + Car

= $120,000 + $8,000 + $12,000 = $140,000

Investment assets = Treasury bond + 401(k) retirement plan =$12.000 + $30,000 = $42,000

Short term liabilities = Credit card debt = $2,500  

Long term liabilities = Mortgage balance + Car loan balance = $100,000 + $1,200 = $101,200

Personal balance sheet is as follows:

Net worth = Total assets - total liabilities = $184,180 - $103,700 = $80,480