Knowing your is step one. Tracking it over time and understanding what drives changes is how you accelerate wealth building.
Why Track Over Time?
A single net worth snapshot tells you where you are. Tracking over time tells you:
- Are you making progress?
- How fast are you growing?
- What's driving your growth (or decline)?
- Are you on track for your goals?
Setting Up Your Tracking System
Frequency
- Monthly: For active wealth builders
- Quarterly: For established wealth
- Minimum: Twice per year
What to Track
| Category | Include |
|---|---|
| Cash | Checking, savings, money market |
| Investments | 401(k), IRA, brokerage, HSA |
| Property | Home equity, vehicle value |
| Debt | Credit cards, loans, mortgage |
Tools for Tracking
- Spreadsheet (most control)
- Personal finance apps (automated)
- Our Net Worth Tracker tool (progress visualization)
Understanding Net Worth Changes
Your net worth changes from two sources:
1. Savings (What You Control)
Income - Expenses = Savings
If you earn $5,000 and spend $4,000, you add $1,000 to net worth.
2. Market Returns (What You Don't Control)
Investment gains and losses, home value changes.
The Wealth Equation
Net Worth Change = Savings + Investment Returns
| Month | Savings | Returns | Net Worth Change |
|---|---|---|---|
| Jan | +$1,500 | +$2,000 | +$3,500 |
| Feb | +$1,500 | -$3,000 | -$1,500 |
| Mar | +$1,500 | +$1,000 | +$2,500 |
Early on, savings drive growth. Later, investment returns dominate.
Pro Tip
When your investment returns exceed your savings, you've reached a major wealth milestone. Your money is working harder than you are.
Key Metrics to Track
Net Worth Growth Rate
(Current Net Worth - Previous) / Previous × 100
| Period | Growth Rate | Assessment |
|---|---|---|
| 20%+ yearly | Excellent (aggressive growth phase) | |
| 10-20% yearly | Good (steady building) | |
| 5-10% yearly | Moderate (may need adjustment) | |
| Below 5% | Investigate what's happening |
Savings Rate
Savings / Income × 100
- 10% = Average
- 20% = Good
- 30%+ = Fast track to wealth
Debt-to-Asset Ratio
Total Debt / Total Assets
- Below 0.3 = Healthy
- 0.3-0.5 = Moderate leverage
- Above 0.5 = High debt burden
Net Worth Milestones
Celebrate these milestones:
| Milestone | Significance |
|---|---|
| $0 (Zero Net Worth) | Broke even—all debt paid! |
| $10,000 | Solid emergency fund |
| $50,000 | First major milestone |
| $100,000 | "The hardest $100K" is behind you |
| $250,000 | Quarter millionaire |
| $500,000 | Halfway to millionaire |
| $1,000,000 | Millionaire status |
"The first $100,000 is the hardest to save. After that, your money starts doing more of the work." — Charlie Munger
Analyzing Trends
Green Flags (Healthy Growth)
- Steady upward trend
- Savings consistently positive
- Debt ratio decreasing
- Emergency fund maintained
Red Flags (Needs Attention)
- Declining for 3+ months
- Savings rate below 10%
- Debt ratio increasing
- Drawing down investments for expenses
Monthly Net Worth Review
Spend 15 minutes monthly:
- Update all account balances
- Calculate new net worth
- Compare to last month
- Identify the drivers (savings vs. returns)
- Note any unusual items
- Adjust plan if needed
The Bottom Line
Quick Win
Set up a simple spreadsheet or use our Net Worth Tracker. Log your net worth today. Set a calendar reminder to update it monthly. In a year, you'll have a clear picture of your wealth trajectory.
Tracking net worth transforms abstract "saving money" into concrete progress toward goals. When you see the number grow month after month, staying disciplined becomes easy.