Listen,
If you’re trying to get better at managing your monies, you’re probably ALWAYS checking your finances:
✅ Bank accounts
✅ Credit cards
✅ Loans
And if not, you BETTER BE.
>:(
But if you really want to see where you’re at financially, you should be tracking your net worth.
No, it’s NOT how much cash you have.
People get that confused all the time.
Your net worth is a collection of how much money you have, own, or borrowed between all your assets and liabilities like:
- Cash
- Stocks
- Real estate
- Credit card debt
- Mortgages
I’ll use Elon Musk as an easy example. His net worth is $100+ billion but he doesn’t have that much money sitting in a bank account.
Instead, he owns stock in Tesla, SpaceX, and Twitter (I’m NOT calling it X lmao) which are super valuable companies.
When they go up in value, so does his net worth.
Every big business owner’s net worth works like this – and yours does too with the assets you own like your car, stocks, etc.
Tracking your net worth helps a toonnnn. It’ll give you an idea of how much you own and it’s a great way to track your progress no matter your financial goal.
I personally like to track my net worth 1-2x/year to measure my progress and see what’s going up or down.
Here’s how you can start tracking yours:
- Cash
Ohhhh yeahhh. Cold hard cash monies.
Start by counting how much you have in your checking and savings accounts.
- Assets/Investments
Next is looking at what you own.
This includes assets and investments like:
- Real estate
- A car/motor vehicle
- Roth IRA/401k accounts
- Investment portfolios
A few things to keep in mind:
- Your assets ARE NOT your clothes, computer, TV, etc. They technically count, but I personally don’t recommend including them.
- The value/worth of real estate and motor vehicles is always changing due to market conditions but you can find estimators online which are good enough for a baseline. I use them and have no problem with it.
- Don’t try to calculate how much you paid off your assets yet if you have a car loan or mortgage. We’ll calculate that in the next section.
- Debt
Ok, once you have your total cash/asset value BEFORE debts, it’s time to add up all the DEATH you’ll have to pay off like:
- Student loans
- Mortgages
- Car loans
- Credit card loans
Now, this might set you back HARRDDDD. If you have bad student debt loans, you might even have a negative net worth.
But don’t worry, it happens.
You’ll just have to work for the rest of your life without Starbies, McDee’s and TAQUITOS or else die on the Walmart floor (kidding but not kidding).
A good trick I like to use is when adding up your debt from some assets (like a mortgage or car loan), put the value of the asset and the debt of your asset side-by-side so you can see the difference.
So if you’re home is worth $300,000 but your debt is $235,000, you can easily see how much you have in value if you decide to sell it.
- Celebrate or Cry
Now that you know your net worth, you can either:
🎉 Celebrate with some ice cream and know you’re in a good place
😭 Cry, mope with some ice cream, and hold yourself while you fall asleep
Then rinse and repeat 1-2x/year.
You know you’re doing a good job when you’re celebrating more than crying.
All jokes aside, your net worth isn’t a reflection of your internal worth. Don’t let it dictate how you’re feeling about yourself. Just use it as a measuring stick and know that you’re a ✨ star ✨ in my eyes.
Taquitos,
Caleb Hammer
P.S.
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Terms and Conditions apply to the free stock bonus; please visit Moomoo.com/us/support/topic4_410. Neither Moomoo Financial Inc. nor any of its affiliates are banks. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. Securities are offered through Moomoo Financial Inc. Member FINRA/SIPC. The creator is a paid influencer and is not affiliated with Moomoo Financial Inc. (MFI) Moomoo Technologies Inc. (MTI) or any other affiliate of them. The experiences of the influencer may not be representative of the experiences of other moomoo users. Any comments or opinions provided by the influencer are their own and not necessarily the views of MFI, MTI, or moomoo. Moomoo and its affiliates do not endorse any trading strategies that may be discussed or promoted herein and are not responsible for any services provided by the influencer. This advertisement is for informational and educational purposes only and is not investment advice or a recommendation to engage in any investment or financial strategy. Investing involves risk and the potential to lose principal. Investment and financial decisions should always be made based on your specific financial needs, objectives, goals, time horizon, and risk tolerance. Any images shown are strictly for illustrative purposes. Past performance does not guarantee future results.
