Friday 30 Dec 2022

Net Worth

Image copyright

Every quarter I complete my net worth statement. This weekend we approach Q4. I like to track my net worth to make sure it is going up. Otherwise, if it’s going down I need to make adjustments. To complete this task, I list all my assets (house, stocks, cash) and liabilities (mortgage, debts, budgets) then calculate my net worth = assets – liabilities. It's satisfying to see my net worth increase overtime and is motivating to continue saving and investing.

If I spend money on the house, such as renovations, I add this expense to my fixtures and fittings account, then list this as an asset; therefore this will increase my paper networth instead of decreasing if I put work into the house. To ensure my net worth is increasing, I compare my stock portfolio quarter-by-quarter to ensure it's increasing.