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Here’s every single month of tracking my net worth, going back over
5 6 7 8 9 years to the very first one I did in February, 2008. Complete with links to all blog posts where I broke down the month in detail – daddy don’t play around! ;)
If you’re asking yourself why someone might do such a thing, here are three reasons for you:
I highly encourage you to do the same if you haven’t started already (if you’re a regular reader of this blog you better be! ;)) There are a billion ways to track it, but I prefer using a plain ol’ Excel spreadsheet that I manually update at the end of every month. This forces me to stop and soak things in before moving on to the next shiny thing.
Here’s the exact template I use – complete with budget built in and all: J’s Financial Snapshot. If you’re not a spreadsheet guy and prefer something more automated (which is fine, whatever gets you to take action), you can try your hand with a free Personal Capital account.
Personal Capital is fantastic tool that connects with your bank/investment accounts to give you an automated way to track your net worth. You’ll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it’s super easy to use.
It only takes a few minutes to set up and after that everything is automated, so if you’re serious about tracking your net worth as you build your first million, you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of PC – check it out: Why I Use Personal Capital Almost Every Single Day.
(There’s also Mint.com too btw which is also free and automated, but its more focused on day-to-day budgeting rather than long-term net worth building)
There’s a ton of different ways to calculate your “net worth,” but technically speaking it’s:
All your Assets (savings, investments, property, etc) minus all your Liabilities (credit card debt, student loans, mortgages, etc) – that’s it.
Whatever number that equates to is your net worth. If you’re not sure what you should include and what you shouldn’t, just start tracking the parts that are important to you and you can tweak it over time. You can also check out this list of Blogger Net Worths I put together on my other site too, which will give you a good idea of how others calculate it (and even more juicier – what *their* net worths are ;)).
But again – this number is for YOU. Nobody cares as much about our money as you do, so always make that #1 priority. Include whatever makes the most sense to you!
Okay. Enough jabbering… Here is my complete list of all net worths I’ve tracked going back to February of ’08. The good, the bad, and even the most ugly months ;) But we “started from the bottom now we here!” – Drake.
How’s your journey coming along? You tracking YOUR money too, right?
Again, the point of this isn’t to brag or show off numbers, but to hold our selves accountable and to continue REACHING for our next higher goal. And the only way to do that is to know where you stand at all times! So please please PLEASE start tracking where all your money’s at. You don’t have to share it with the world like us crazy bloggers, but do keep it somewhere so you can access it (and update it!) with each passing month.
Good luck! :)
PS: After spending some time soaking all this in, I realized a majority of the success here came from only focusing on one main thing: Retirement accounts. Yeah I hustled my ass off and got lucky here and there too, but the bulk of this success was maxing out both my Roth and my 401k/SEP every single year. You invest $20,000 a year and your wealth will explode too! Even if you never did anything else.
Investing in retirement accounts works because tax deferment/tax reduction lets the power of compound interest work on a bigger chunk of your money. On the other hand though, a lot of institutional retirement plans are loaded with hidden fees. Even tiny fees have a massive impact, because you end up with the power of compound interest working against you. That means those fees can reduce your lifetime savings by hundreds of thousands of dollars.
Its pretty mind-boggling how tiny %s can compound into life changing amounts of money when you let it grow over the years. You can use this free fee analyzer tool to analyze your retirement accounts and figure out if you’re paying any hidden fees.