Why do I track my net worth?
- What gets measured, gets managed
If there’s a goal you want to reach (losing weight, saving money, meeting people) the best thing to do is to track it. You’ll notice your habits and see if you’re getting closer or further away from your goal.
- It’s fun
I treat this like a game. It’s like when I played Lemonade Stand as a kid and became the world’s greatest lemonade entrepreneur. It’s fun to see this number go up.
I want to reach 1 million dollars!
- I want to be able to financially independent and not have to think about money at all
I don’t particularly enjoy thinking about money. It makes me anxious.
The ultimate goal is to be financially independent, meaning you can go through the rest of your life without ever having to “earn” another dollar.
For example, if you need $1 a year to live and you have $100 saved, you’re financially independent. Even if you never made another dollar you’d be good for the next hundred years.
Why do I share my net worth?
The current savings rate is just 3.4%! This is ridiculous. We don’t talk about this enough.
Well, for one thing, the culture we have does not make people feel good about themselves. We’re teaching the wrong things. And you have to be strong enough to say if the culture doesn’t work, don’t buy it. Create your own. Most people can’t do it. –– Mitch Schwartz
Tracking your money is healthy and necessary.
Hopefully this motivates you in some small way to start (or continue) tracking and increasing your net worth.
How do I calculate my net worth?
Current value of: savings account + checking account + 401(k) + VTSAX investments.
Net Worth = Assets (savings, investments, property, etc) - Liabilities (debt, mortgage, etc)
Different people calculate their net worth differently. Some people like to include the current value of their car, for example. I prefer to keep it simple.
The point is keep track of this number. Decide for yourself what you want to count as an asset or a liability.
How do I track this?
Once a month I input these 4 numbers (and a few others) on my “Net Worth” spreadsheet. Here’s the template I use (link goes to Google Sheets) - Gonzalo’s fantastic net worth spreadsheet
2018 Net Worth:
- March: $42,756.30 (+$3,906.28 – 1st time posting my net worth online!)
- February: $38,850.02 (+$6,971.70)
- January: $31,878.32 (+$5,603.75)
2017 Net Worth:
- December: $26,274.57 (+$7,219.93)
- November: $19,054.64 (First month I started tracking my net worth)
Inspired by J. Money