Tracking your Net Worth will make you rich!

Tracking your Net Worth will make you rich!

Want a tip on growing your Net Worth?

I’m obsessed with monitoring my net worth. That is I’ve been tracking it monthly for the last three years. I believe the constant attention has helped in it increasing over the years. Its just like anything else in life, if you give it attention you’ll see improvement. Because as I made purchases throughout the month I always had a voice in the back of my head saying, how will this affect my net worth when I punch it in at the beginning of the month. If you have ever tracked your calories it the same concept.

Tracking your net worth, Net Worth, Personal Financial Statement
Donnie on the first of the month! It’s time to see where we are at financially.

I believe your net worth is a real measure of your wealth for one simple reason. This is the real cushion you can fall back on if times ever get tough and you no longer had an income coming in. I’ve seen and have met countless people who earn $200,000 or more a year that had a net worth of $300,000. This means if for some reason they stopped making money they could only live 1.5 years on their assets.

What is net worth?

This is simply a measure of all your assets minus your liabilities.

Assets - Liabilities = Your Net Worth
Negative net worth?

Don’t be scared. Not only was mine negative, until exactly three years ago when I started tracking it religiously, but many americans have a negative net worth. This is mainly attributable to student loans because the loans have no real assets backing the liability, like a house or a car loan.

In order to track my net worth I use a simple excel spread sheet. But recently I’ve been using an actual personal financial statement I have revamped from a bank personal financial statement. I only going into this kind of detail every quarter (every three months). This allows me to see the progress on my investments and all the small details of my financial picture.

Below is the Net Worth Statement I fill out every three months: But now I do it every month.

Personal Net Worth Statement
In summary

Tracking your net worth is the same as tracking your weight or fitness level. Therefore, if you want to improve your fitness level you must measure your progress over time in order to see the improvements, finance is no different. Your net worth is your financial health and its time to jump on the scale and begin to make improvements.

I challenge you to fill out the form I provided today! And please leave a message below and let me know how it turned out. I’d love to hear from you.

Websites that will help you track: I’ve personally used all three.
  1. Mint
  2. Personal Capital
  3. Dinky Town

 

 

About Donnie Gardner

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