How to track your net worth, and what to include
Net worth is the total of what you own minus the total of what you owe, measured on one day. Own $8,000 in cash, $22,000 in savings, $46,000 invested, and $15,500 in other assets, and owe $8,400, and your net worth is $83,100. The trend from month to month tells you whether your plan is working.
What to include
| Own | Owe |
|---|---|
| Cash in current and cash accounts | Credit card balances |
| Savings and emergency fund | Loans: car, personal, student |
| Investments at cost or market value | Mortgage balance |
| Income-producing assets: a channel, a site, a rental | Buy-now-pay-later plans |
| A home, if you choose to count it | Money you owe friends |
How to value things
- Cash and debts are exact. Use the balance on the day.
- Investments: market value is truest; contribution cost is stabler. Pick one and stay consistent.
- Assets without a market price, such as a channel or a website, get an estimate from earnings multiples, updated when the earnings change.
- A car or a home: include only if you would actually sell, and use a conservative figure.
Why the history matters more than the number
A single net worth figure is a snapshot with no direction. Twelve monthly snapshots show whether savings are growing, whether debt is shrinking faster than you thought, and whether a market dip is noise or a trend. Month-end is the natural cadence: after salary, after bills, before the new month begins.
Common mistakes
- Counting money twice: cash already moved to savings is savings, not cash.
- Forgetting debts because they feel separate from the picture.
- Valuing a business or channel at a hopeful price rather than one a buyer would pay.
How Worth Clarity does it
The net worth page sums cash available, savings, investments, portfolio holdings at live prices, and assets at their last recorded value, minus open debts, with a composition bar and a twelve-month chart. Asset and debt values write their own history whenever they change, so the chart improves the longer you track, and the FIRE calculator sits alongside it.
Common questions
- Should I include my pension or retirement account?
- Yes, as an investment. It is money you own even if you cannot touch it yet. Some people track it separately from accessible investments so the FIRE maths stays honest about timing.
- How often should I update net worth?
- Monthly, at month end. More often adds noise from market swings; less often hides trends. If your ledger is up to date, the update is automatic.
- Is negative net worth bad?
- It is common early on, especially with student loans or a new mortgage. What matters is the direction: a negative figure rising toward zero is a plan working.
