What is your net worth?

A simple guide to help you calculate your net worth

How to calculate your net worth

Your assets-your liabilities = your net worth.

Positive net worth

If your assets minus your liabilities equals a positive number, you have a positive net worth. Example: $6,000-$4,000 = $2,000

Negative net worth

If your assets minus liabilities equals a negative number, you have a negative net worth.

How to track your net worth

1. Set a calendar reminder

One of the things that makes life easier and helps in solidifying positive habits is using Google calendar to set up reminders. How is tracking your habits coming along btw?

2. Update your spreadsheet regularly

I save and invest on a monthly basis but I don’t update my net worth excel sheet every month. I do it every 2 months or when I ask for statements from companies I invest with/in.

A simple spreadsheet to track your assets
A simple spreadsheet to track your liabilities

3. Have specific financial goals

Saying ‘I want to be rich’ or ‘One day I will be rich.’ is not a goal. Fantasizing about your future wealth (as much as I do it a lot too) is not a goal. Sorry! To be worth an X amount by 31st December 2020 is a goal.

Key tips and lessons on growing your net worth

1. Don’t worry if your net worth is 0 or negative especially if you’re still in your 20s

The book A Simple Path to Wealth by JL Collins taught me that there are two stages in our investing lives. The Wealth Accumulation stage and The Wealth Preservation stage.

Don’t judge each day by the harvest you reap but by the seeds you plant. — Robert Louis Stevenson

2. Cultivate an attitude of deservedness

One of my favourite personal finance podcasts is Mastercard’s Fortune Favours the Bold hosted by Ashley C. Ford. In one of the episodes, one of her guests said…

3. Work on reducing your liabilities

Budgets are liberating. They allow you to prioritize and tell your money where to go.

4. Increase your ability to earn more

Take a new course. Upgrade your skills. Negotiate for a raise. Start a side hustle.

A pitcher can be filled drop by drop and so is the case with your wealth. Acharya Chanakya

5. Be consistent, be patient

Your net worth is dependent on how much you save and invest. And the growth of your investments is dependent on the magic of compounding. Don’t interrupt your compounding.

6. You are a business one one

Remember that you can’t manage what you can’t measure. You should be able to say what your net worth is to know if you’re making progress or not.

You’re so broke you don’t think you should budget and bookkeep? False. You gotta value your brokenness the same way the rich value their wealth. Don’t take pride in it, but value it and take accountability for why you’re broke and how you gon climb out of it. — Financial Philisopher on Twitter

7. Avoid big financial losses

I got conned $300 in November last year, a story for another day. It took me a while to recover emotionally.

Rule number 1: Never lose money.

Rule number 2: Don’t forget rule number 1.

- Warren Buffett.

Once you make tracking your net worth a habit, it becomes a rewarding experience to look back on your journey. It’s also exciting to watch as the figures go up and down.



Your voice of reason before you blow all your money this weekend! www.thewealthtribe.com

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store