Considering that the value of housing stock in Britain has almost quadrupled over the past two decades, it’s not surprising that more than half of the nation’s net worth is tied up in property.

With homes likely to be the single biggest purchase someone will make in their life, it’s usually a given that that is where the majority of their wealth resides.

But does it really pay to work hard all of your life to eventually have no mortgage and a big chunk of equity just sitting there, doing nothing?

The answer, in most cases, is no.

Having a significant amount of capital, and most of your net worth, tied up in property can make your net worth seem extremely positive. And this will even increase over any medium to long-term period without you having to do anything at all.

The downside is that all the while, that money is not working for you; it’s not generating any income or revenue and earning zero interest.

So while you might be happy with your net worth balance sheet, it’s unlikely to improve if you don’t leverage your assets.

This brings me onto the question – do you actually know what your net worth is? Property equity included.

Knowing your net worth is key to understanding your current financial situation.

In simple terms, this is the figure you are left with once you calculate the value of all of your assets minus any debts and liabilities. This will often include your properties (investment and home), pension pots, cash savings and other investments minus any credit card, loan and mortgage balances for example.

The most important point to make here, is that you’re not going to sell everything you own. You wouldn’t leave yourself without a roof over your head or vehicle to get to work in unless you absolutely had to.

Which is why it’s important to not only know what your net worth is, but where you can realistically make cut backs or additional investments that can improve it over time.

And it’s not about what you earn. You could be on a great salary, but if that’s being spent each month on expenses, then your net worth will not change.

It’s about what you keep.

Let’s face it – having money is a fundamental requirement to achieving whatever you want to in life. Even if you don’t have extravagant dreams and just want to spend your life travelling around the countryside in a 25-year-old Volkswagen campervan, it still costs money.

On a more serious note, your net worth is often reflective of how comfortable you will be in retirement.

According to ONS data from the last census, 23% of people have nothing saved in a pension. If those people spent their entire working life paying off their mortgage without considering what would happen when they retire, they’d be left with a valuable asset that they would need to sell to give them an income to live off.

On the other hand, a lot of your net worth could be about to mature in the form of a pension.

If you don’t need that money right now, can it be utilised to improve your net worth for when you do need it?

If you don’t know your net worth, then you won’t be able to properly assess any of this.

So regardless of your age or current financial health, taking action now could reap huge rewards in the future in terms of net worth.

And the first step is calculating your net worth, which will enable you to:

– Understand what assets are working for you and which ones aren’t

– See where you are over-exposed

– Establish what you need to do to improve it

– Know what opportunities there are to leverage what you have

Ideally, your net worth should be a positive figure. And if you’ve owned property for some time, then it probably is. So there could be an opportunity to ‘do more with less’ as Robert Kiyosaki says and start making your money work for you.

If it’s a negative figure, it’s not the end of the world. But you have some work to do.

Find out your net worth today. Click here

Net worth personal report