How do I calculate my net worth, and why does it matter?<\/p>\n
If net worth<\/a> sounds like something only the uber-rich have to think about, it\u2019s time to think again. Everyone has a net worth \u2014 though some are certainly higher than others \u2014 but you might be surprised to learn that you\u2019re worth more than you think. More importantly, your net worth is one of the clearest snapshots of your overall financial health<\/a>.<\/p>\n<\/p>\n For You: 4 Secrets of the Truly Wealthy, According To Dave Ramsey<\/a><\/p>\n Learn More: 3 Advanced Investing Moves Experts Use to Minimize Taxes and Help Boost Returns<\/a><\/p>\n Dr. Preston D. Cherry<\/a>, a financial planner who calls himself \u201ca life designer in the world of wealth,\u201d is the founder of Concurrent Wealth Management<\/a> and author of \u201cWealth in the Key of Life.\u201d He explains how to calculate your net worth, why it matters more than you might realize, and how tracking it over time can help you achieve your biggest financial goals.<\/p>\n Calculating your net worth doesn\u2019t require any complicated technology or sifting through boxes of paperwork; it\u2019s a lot simpler than people think, Cherry said. \u201cIt\u2019s just what you own minus what you owe.\u201d To calculate your net worth:<\/p>\n Then subtract your liabilities: These include credit card balances<\/a>, student loans, auto loans, your mortgage or any other outstanding debts.<\/p>\n Read Next: You Worked Hard To Build Wealth \u2014 Use This 3-Step Checklist To Protect It<\/a><\/p>\n Once you calculate that number, Cherry encouraged a mindset shift: don\u2019t think of it as a static figure, but as \u201ca snapshot of your financial story.\u201d In his words, \u201cIt gives you a sense of where you are and a guide to where you\u2019re going.\u201d<\/p>\n Think of your net worth as your personal financial narrative. \u201cIt tells you where you stand, how far you\u2019ve come, and your aspirational future,\u201d Cherry said. In other words, don\u2019t use it to compare yourself to others, but to measure your progress against your own goals.<\/p>\n Tracking your net worth regularly, such as quarterly or annually, can reveal whether you\u2019re headed in the right direction. It can also highlight blind spots, like lingering debt or underutilized savings opportunities, and bring clarity to future decision-making.<\/p>\n Another way to think of net worth, according to Cherry, is as \u201ca reflection of how your financial choices support your well-being.\u201d If your net worth is on the low side, that may show up as struggling to make ends meet or falling short of your goals.<\/p>\n Story Continues <\/p>\n The good news? You can set more aspirational goals and create concrete plans to raise your net worth<\/a>. \u201cAnd when you see that number grow, you gain confidence \u2014 not just in your finances, but in your future,\u201d Cherry said.<\/p>\n Growing your net worth doesn\u2019t happen on its own unless you already started with millions. Instead, Cherry suggests taking the following steps:<\/p>\n Automate and activate saving and investing: Your contributions add up with time and compound growth. Use both employer-sponsored<\/a> and brokerage accounts<\/a>. Also, don\u2019t be afraid to take calculated risks at opportune times.<\/p>\n Invest in yourself: Money invested in your own education, health, skill-building or personal growth often translates into long-term financial growth.<\/p>\n Remember that net worth isn\u2019t built overnight. \u201cSometimes it\u2019s boring,\u201d Cherry said. \u201cIt\u2019s the result of aligning your habits with your values \u2014 and doing so consistently.\u201d Over time, those daily choices can add up to financial clarity and freedom.<\/p>\n This article is part of GOBankingRates\u2019\u00a0Top 100 Money Experts\u00a0series, where we spotlight expert answers to the biggest financial questions Americans are asking. Got a question of your own? You could win $500 just for asking \u2014 learn more at\u00a0GOBankingRates.com<\/a>.<\/p>\n More From GoBankingRates<\/p>\n This article originally appeared on GOBankingRates.com<\/a>: Are You Worth More Than You Think? A Wealth Expert Shares How To Calculate Your Net Worth<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"How do I calculate my net worth, and why does it matter? If net worth sounds like something…\n","protected":false},"author":2,"featured_media":84335,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,50362,133,9042,48020,131,132,50361],"class_list":{"0":"post-84334","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-concurrent-wealth-management","12":"tag-finance","13":"tag-financial-goals","14":"tag-net-worth","15":"tag-personal-finance","16":"tag-personalfinance","17":"tag-preston-d-cherry"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/84334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=84334"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/84334\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/84335"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=84334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=84334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=84334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}