Increasing your net worth can only be done by consistent tracking over time.
As T. Harv Eker states, “Where attention goes, energy flows, and results will show.”
So, the short answer to the above question is a resounding—YES!!!
We usually hear the term Net Worth mentioned in the movies when the characters are seated at a very, very, very long conference room table in the middle of a super, serious corporate meeting.
Or, sometimes, people at country or yacht clubs will be overheard discussing their net worth numbers while ingesting their spicy shrimp cocktails and dry Martinis.
However, when “SHOULD” we hear the term used?
In all reality, it “SHOULD” be a term any one who wants to be rich someday (in a slow-go way) should use and track on an almost, daily basis.
It is sad to say, but 73% of 18-34 year-old adults (according to a Harris Poll) have no idea what the definition of net worth even is?!?!?
How to calculate net worth?
Our net worth is calculated by adding together all of our assets. (Assets are the things you own like: your car, house equity, savings, cash value on life insurance, individual stocks, 401Ks, IRAs, ROTH IRAs, municipal bonds, pensions, jewelry, precious metals, business equities, campers, boats, etc.
(You get the idea.)
To find your net worth, subtract the liabilities from the assets.
That’s your bottom-line number.
The true name of this net worth game is “Keep the Liabilities Low.”
A negative net worth (your liabilities are higher than your assets) would mean that if you died today (morbid, I know) someone else would have to pay for your debts AND funeral expenses.
The New York Federal Reserve reported 15% of American households currently have a negative net worth….
NOT a good memory to leave behind…
So, how can you begin to increase your net worth?
Here Are 5 Sure-Fire Steps to Get Started Tracking Your Net Worth.
- Start saving. This has NOTHING to do with your income level. Just start. (A great number to shoot for is 10% of your earnings.)
- Start investing. This, also, has NOTHING to do with your income level. If your employer offers a Retirement Savings Plan (usually a 401K), sign up and aim for the highest amount to have matched. You can, also, get connected with a certified financial planner and set up some individual retirement accounts (IRA, ROTH IRA).
- Make more money. You can: ask for a raise, get a second job, start a side hustle… The key here is to focus on making more to SAVE and INVEST MORE.
- Make a plan. Probably the most important thing to do to increase your net worth is to make a plan and stick with it. Remember the “Keep the Liabilities Low Game” from above. Here is where the rubber meets the road. Decrease your cost of living expenses to see an increase in the money to invest/save.
- Stick to your plan. You MUST be consistent and disciplined in tracking your net worth. Many people track it on a monthly basis. (Some of today’s money gurus tell us to track it by the second. You can decide the frequency, but STICK WITH IT!)
There are also many on-line net worth calculators to choose from, as well as, apps on your phone.
The most important thing you can do is start tracking-TODAY.
You can become a wealthy person with slow and intentional progress.
It has been said, what we track in this life increases.
So, download your EASY NET WORTH TRACKING SYSTEM and get started increasing yours-TODAY.
Much love to each of you-
Here are a few related post links to get you faster and further on your way to “Living a Life, YOU designed.”
Eker, T. H. Secrets of the Millionaire Mindset. (2005).