As we’ve talked about in the past, the best indicator to determine your current financial status is your net worth.
If you want to manage your money like the rich, worry more about your net worth than your salary. As professional athletes have taught us, just because you make a lot of money doesn’t mean that you’re on the right track to financial success.
By calculating your net worth, you’ll have a complete picture of your finances and know whether or not you’re going in the right (or wrong) direction.
But while it’s important to know your net worth, it may not be the best idea to track it everyday — even if account aggregators make it easy to do.
So, I want to know: how often do you calculate your net worth?
Answer the poll below and then let me know why in a comment.
[poll id=”27″]
{ 5 comments… read them below or add one }
Being a lover of all things using an Excel spreadsheet, I have debit/credits listed as well as “very pretty” graphs showing the growth (and decline) of our net worth among other financial minutiae.
I don’t think my vote worked, but I calculate my net worth at the end of each month. It just seems like a nice arbitrary time period that’s easy to remember. It also allows me to see the trend over time and to recognize seasonal variations.
Seldom ever, b/c your Net Worth Is An Illusion! I write about it in one of my posts in the Net Worth category.
I mean, when Zillow says I’m $400,000 richer since this summer, I just have to laugh. I’ve got several posts highlighting the fallacy of net worth.
The only thing that matters is how much cash and LIQUID assets you have. That’s it!
FS
I calculate my net worth every month, like Jackiw. BUT I agree with Financial Samurai in that it doesn’t really say much. I go by another metric that I picked up from the oft-criticized Robert Kiyosaki. I know he has his flaws, but I’m absolutely loving his metric for wealth.
He measures it in how long you can survive if you lost your salary. To me that’s a much clearer measuring stick of your financial shape. And since I’m currently developing a couple of sources of passive/residual income, this is the perfect way for me to measure my progress.
I chose weekly as an average, though sometimes it?s almost daily. I have my debt balances in Excel and as I update them, my net worth calculated automatically.