Getting Smart with Money: The Net Worth Edition

This may be an uncomfortable question, but here goes…
 
Do you have a system for tracking and monitoring your net worth?
 
The equation is simple:  your net worth is the number you get when you take the things you own (your assets) minus what you owe (your liabilities). If the difference is a positive number, congratulations—you have positive net worth. If what you owe is greater than what you own, your net worth is negative.
 
Why is this an important metric?
 
Akin to how your weight is one indicator of your physical health, your net worth is a quick, easy measure of your personal financial health. There are, of course, going to be some fluctuations and changes in both of these figures; but they can be tracked over time to see if you’re moving in the right direction toward your goals. An increasing net worth represents how much of the income you retain from years of hard work and how much you have to work with for things like retirement, giving, wealth building, purchases, or investing in a business.
 
Think about how much money passes through your hands over your entire working career—for the average American, this number is anywhere between $2-10 million dollars.

WHAT???
 
If you’re like me, you find that number shocking. If you’re advanced in your career, you might feel like you should have held onto more of this money. If you’re just getting started, hopefully you see just how much wealth-building potential you’ll have in your working life.
 
If you’re interested in learning how to speed up the growth of your net worth, give this article a read. I think you’ll find some great tips on how to get startedand stay on track while tracking your financial health. If you need a system to track your net worth, hit “reply” for a copy of my favorite net worth tracking spreadsheet.