Ep 555 | The Power of Tracking Your Net Worth

Thank you for joining me today. It's Brian Gubernick, and welcome to the No Days Off podcast, where we believe that every single day brings a new opportunity to get better. Today's episode is about one of the simplest, most powerful financial habits that I think you can implement, and that's tracking your net worth. It's not complicated. It doesn't have to take you a long time, but I think it'll change the way you think about money, think about your future, and maybe most importantly, think about freedom. Let's dive into this. Let's talk about this subject a bit. So first, what is the net worth tracker? What is net worth, right? The tracker is usually a spreadsheet. Or some sort of software that, that helps you calculate your net worth. Now, your net worth is everything you own minus everything you owe. So, in other words, it's your assets minus your liabilities equals your net worth. Now, your assets probably include cash and bank accounts, investments, retirement accounts, cars, real estate, business interests, just anything that has value. And then the liabilities are going to be things like your credit card balance, your student loans, your mortgages, car loans, just any sort of personal debt or line of credit. Now, once a month, or maybe once a quarter— and we'll talk about that here in a moment— you're going to update these numbers, the assets and the liabilities. You total the value of all those assets, you subtract all the liabilities, and now you have a snapshot of where you stand financially. It's your personal financial scorecard. It's not how much you make, but it's how much you keep. That's a message we have here at No Days Off. And when you're aware of this personal number, this scorecard, you could be more strategic. You could be a bit wiser as you're building. Now, this net worth, why are we even tracking it, right? We've established what it is, but why track it? This has been my experience over time. First, the accountability. I think that when you track these numbers, it forces you to face reality. There's not hopes or guesses, but actual data. Where do I stand, right? Number 2, I think it creates awareness, and arguably this is the most important component of all this. It creates awareness. You, you start to understand your assets, your liabilities. Maybe you uncover hidden liabilities or unused accounts or forgotten assets, but it creates awareness as to where I, where I'm at today and gets me thinking about where I want to go, which kind of leads to the next benefit. It brings alignment. It keeps your day-to-day decisions aligned with those long-term goals. Now, for me, another big reason to do this is to align or keep the, keep the spouse, uh, uh, side by side with you here, creating clarity, creating some unity in your household. I think it could actually turn money from a stressor that many relationships have into a shared project. I think we're also tracking if we intend to build a legacy or generational wealth. I don't think you're tracking this just for you. You're laying the foundation for others who come after you. Now, this This doesn't necessarily mean we're tracking a number so that we can hand it over to the kids per se, but we're tracking a number so we know what we have if we chose to hand it over in any capacity down the road. And then the last couple reasons why to track it, I think it's to measure your passive income target. If you want to retire or at least have the option to do so, and you know the number that you need each month to live the life that you want to live, you can figure out what your net worth needs to be and then look at the, you know, 4% rule, which we've talked about here at No Days Off. You look at your passive income from real estate investments and you can figure out, you can more or less reverse engineer that net worth total that you must have to create the passive income that you desire. And then the last thing, I think it's just to gamify the process. I mean, hey, you're here listening to the No Days Off podcast. Because, because you're a gamer, because you compete, because you're a business person and you like the sport of it all. And I think gamifying this process makes wealth building fun. You see progress, you set milestones, you celebrate wins. Now, I think this exercise should be done monthly or quarterly. I think if I'm earlier in my wealth building journey, I may be doing it monthly. So I'm, I'm, so I'm learning, I'm more in tune with what's going on. And then as you progress, maybe you scale back to quarterly so as to give a little bit more time for, for fluctuation. Monthly is going to give you more rhythm and faster feedback. Quarterly is going to give you, you know, a financial picture that may not change as much day to day. My belief is that either is fine. It's entirely up to you. The key here though is is consistency. Tracking once is interesting. Tracking regularly, regularly though, in my opinion, can be transformational. I don't think it's about obsessing though. This isn't about to be stress. It's about awareness and it's about intention. I'll also say that I have found that as, as great as it is to track when things are going the right direction, it's even more important to track when things are flat or potentially going the wrong direction. So, one thing to note, don't shy away from this when times are hard. It's when you lean in more, create even more awareness. So, what are your steps? If you're already doing this, then check what you're doing against the steps I'm about to give you. If you're not doing this yet, take these steps. Now, real quick, there will be a link in the show notes here today for, for a net worth tracker. That I borrowed from my buddy Ben in his, in his podcast, Win Make Give. And you can plug into that if you don't already have a spreadsheet or a tool of your own. So number 1, step 1, gather your data. Log into all of your accounts, your bank accounts, your investment, mortgage, credit cards, business value, whatever it is you have. Gather all of your data. Then list, number 2, list your assets. Include everything that you have that has real-world value. Then number 3, make a list of all of your liabilities, every debt, every obligation. Number 4, do the math, subtract those, subtract those liabilities from assets. That's going to be your net worth. And then number 5, track it over time. Use the Excel document or Google Sheet that, that we'll provide in the show notes, or create your own Excel sheet that's just got some sort of tracker to it. And it has dates, or you set quarterly targets, and you can record it side by side by slide. Now, if you're married or you have a partner, start to review this stuff together, because I think this conversation could lead to incredible alignment and peace of mind. Now, as you start tracking, as you start going through these steps, you start tracking, you're going to gain confidence. Because you're going to know where you stand. And you're going to build urgency because you're going to be able to spot maybe red flags faster or opportunities faster. You'll unlock different momentum because every increase is going to give you energy. You'll build this discipline around money because you'll be making decisions based on, you know, things like what compounds over time and most improves the net worth. And then lastly, for many, I think this could change your identity. Because you become someone who builds wealth on purpose and not by accident. You stop reacting and you start leading your financial life. So this one habit, in my opinion, becomes your financial GPS. I think you stop chasing some vanity metrics like revenue and you start focusing on true wealth because now you're thinking in terms of ownership, leverage, liquidity, long-term freedom. It's just a different mindset, the mindset that what most have. You begin to see money for what it is, not, not as a goal necessarily, but as a tool. And that tool happens to create time and space, opportunity, impact. So your action steps: download the net worth tracker within the show notes, or just create one of your own. Then put aside some time Maybe it's 30 minutes to an hour to complete it. Just get it started. Then put a recurring reminder on your calendar every month or every quarter to go through it again. I then share kind of where you stand with your spouse or a business partner or some sort of accountability partner. And then lastly, if I'm you, I'm going to set a goal. I'm going to set a long-term goal, but I'm also going to set a short-term, more specific goal for, say, the next quarter that's going to grow my net worth. If you've already been tracking, then take 5 minutes to reflect on this question: what's your biggest opportunity to improve this quarter? And if you're new to this, start asking yourself that question as you build this rhythm. Net worth tracking, in my opinion, is not about obsessing over money. It's about just taking ownership, ownership of your freedom, because wealth, in my experience, is not built in a day. It's built Daily. It's not built in a day. It's built daily. I promise you the single greatest thing that I believe that anybody could do to begin to improve their, their wealth is to start tracking regularly their net worth. The simple act of bringing more awareness to what it is you have and do not have that then prompts you to ask questions like, how do I make improvements? That single act will change the game for you. If you do nothing else, then do this one thing. I assure you, you'll look up in a year or so and your whole world will look dramatically different. The way you think about money will look dramatically different. Thanks for listening to today's episode of the No Days Off Podcast. We really appreciate everybody here at the No Days Off Nation plugging in, doing the work. That's all I have for you today. Remember, every single day brings a new opportunity to get better. So let's get after it.