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WHEN KIMBERLY SUGGS' RETAIL COMPANY, RIGHT ON Casual, announced that it would be ending its 401(k) plan in early 2001, Suggs knew her life was in store for some changes. Right On had a large number of longtime, high-ranking employees, and the percentage of money in the plan allocated to that Soup exceeded the legal limits. Suggs and the other employees were forced to find other ways to enhance their retirement savings. She used the opportunity not only to think about what to do with her retirement savings but also to evaluate where she was in life.

"I had bought my apartment for $120,000 in June 2000, so I had a mortgage and my priorities were shifting," says the 20-year retail industry veteran. Although she was a senior buyer earning $90,000, Suggs didn't feel her career was on the right track. A job change was imminent. Suggs, 39, and single, enjoyed a lifestyle filled with leisure activities and travel. She put away $120,000 in her 401(k) but knew that wouldn't be enough money to retire on, so she reached out for help.

In April 2001, Suggs decided to place her 401(k) savings in the hands of Anthony G. Epps, CEO of A.G. Epps Financial Group in Rye, New York. Epps' 17-year-old firm specializes in the wealth counseling of individuals with a net worth of $5 million or more. "I had a thorough interview with Mr. Epps to get a handle on what my future possibilities were," Suggs says.

The interview between Suggs and Epps established the types of assets and liabilities Suggs had, and the two used that information to determine how to best invest her money to reach her retirement goals. The $1,572 monthly mortgage payments on her two-bedroom North Bergen, New Jersey, apartment, and about $5,000 in credit card debt accounted for her liabilities.

With her retirement account, $2,000 in savings, and her apartment (which had appreciated in value to $150,000), Epps estimated her net worth at about $200,000. After expressing her goals to buy a house in two years, retire with enough money to travel frequently, and maintain her current lifestyle, Suggs was ready to invest. "Once we established my net worth number, it was the basis for how I was going to invest my money, where I would ultimately end up when it was time for me to retire, and what I would need to do to get there," she says.

"We set her up with an IRA variable annuity to give her a portfolio that will allow her flexibility for change without incurring any additional expense for transferring money between accounts or transferring across investment classes with different companies," explains Epps. "After retirement, she can annuitize it and receive monthly benefits if she wants to, or she can pull out a lump sum. There are a number of different options."

Suggs chose six of the 30 mutual funds Epps' firm offers to invest: 20% of American Century Income & Growth; 20% of Mainstay VP Growth Equity; 20% of Janus Aspen Series Balanced; 20% of Fidelity VIP Equity Income; 10% of MFS Growth with Income; and 10% of Mainstay VP Value.

She also made some life changes. In September, Suggs took a pay cut to start a new job as an associate buyer with Ashley Stewart, a company that offers a 401(k) plan with a dollar-for-dollar match--something that will improve her retirement savings and her net worth while at the company. She says, she'll consider selling her apartment in 18 months and use the profits to buy a large home. And she admits now that being more aware of her net worth has helped her to curb spending and reach her financial goals faster.

"I feel good that I started a base for more potential growth," says Suggs. "I hadn't been involved with the stock market, nor do I understand it well, but this is the type of information that gives me more options to improve my life."

So how can you calculate your net worth? Over the past two years, through our Black Wealth Initiative, BLACK ENTERPRISE has stressed the importance of DOFE principle No. 4: to measure my personal wealth by net worth, not income. It's a principle Suggs has now embraced. To resolve questions about calculating net worth, we asked, Mark Mitchell, a registered advisor with AXA Advisors in San Juan Capistrano, California, to help.

Simply stated, what you own minus what you owe equals your net worth. When you begin to calculate a person's net worth, Mitchell says you must first determine "how each asset is held." It is best if each asset is solely held (or owned) by the person calculating the net worth. If the asset is jointly held in any way, "This will make a difference in how net worth shakes out," says Mitchell. For example, "In a community property state, you are entitled to half the assets of anything acquired after marriage, even if you didn't help pay for it." (There are 10 community property states: Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.)

* REAL ESTATE

Over the past year, we've received a number of questions about the net worth of individuals who owned property. We, at BE, have not counted the value of a home as a full-fledged asset in the past because, as Mitchell explains, "Personal residence real estate is an illiquid asset. The only way to liquidate that asset is by selling it. Or, you can get a new mortgage, equity line of credit, or refinance an existing mortgage--but that's the only way you can get cash out of it, other than a sale. The reason is, if you're trying to show the value of equity in the property, the lender will discount the value of the property because it's not liquid."

However, the value of real estate in building wealth is unquestioned, so in our future calculations of net worth we will count the fair market value of the home as an asset against the cost of the mortgage as a liability.

* STOCKS AND BONDS

Securities are assets whose value changes everyday. "The fair market value is good only for the day in question," says Mitchell. When calculating these into your net worth, count only the portion of the portfolio that has not been "margined," where a brokerage firm allows customers to use securities they own as collateral for a loan to purchase more securities.

* BUSINESS INTERESTS

Mitchell explains that if you own a business, or do consulting on the side, this can become an asset to you because it's going to generate revenue, which will produce earned income that can be calculated in your net worth.

For example, substantial assets, such as a building that you own, can be added to net worth. You may also want to have your business appraised to see how much it's worth.

* CASH

Cash is simple: Any money market accounts, certificates of deposits, bank bonds, Treasuries, and savings are assets. And, Mitchell says, if you've given money to a friend or relative to help start a business and, "If you are expecting to get principal and interest in return, it's a receivable--an asset to you." However, if the borrower defaults on the loan, you may be able to deduct a portion of it as a bad debt.

* AUTOS AND BOATS

Leased property is typically not considered an asset because the ownership interest rests with the lessor not the lessee. "However, collectible cars, motorcycles, etc., are booked as assets because they have some significant, tangible value in certain instances," says Mitchell. "My personal cars may be treated as such if I'm making payments on them or if I own them outright." Personal vehicles could also be counted as a business asset if they help you earn income.

* FURNITURE AND FURNISHINGS

Mitchell believes that to consider anything in this category an asset (including furs, jewelry, art, etc.), it must have a certified appraisal by someone who is credible. "It's hard to get the net value of these things," says Mitchell. "A certified appraisal gives you a better stand."

* RETIREMENT PLAN

For employer-sponsored retirement plans, ask: How much of your money and your employer match will you walk away with when you leave?

Only count the vested portion of your retirement plan assets toward your net worth. Also, if your 401(k) is pretaxed, "the liability is the tax because you only take away what's left over after taxes are finally taken out."

As far as insurance policies go, Mitchell says you cannot list a life insurance death benefit as an asset, "because you'll never see the benefit--your beneficiaries will." However, he says, "In those cases where a person purchased life insurance with the intent of using it as part of their retirement planning strategy, and [it] has a lot of cash value, then I would book the cash portion as an asset, not the death benefit."

Knowing and boosting your net worth should be your goal. To do that, for Suggs and many others like her, Epps says the answer is simple: "We need to spend less than we make."