How to REALLY Track Your Net Worth (3 Stages)

How to really track your net worth. There's a lot of rubbish out there about net worth and what it really means and what's the true definition of, you know, a millionaire, or what really, what you're actually worth in pounds and pence, dollars and cents, and not just all on paper. Well, I became a net worth millionaire age 30. 30 to 31, but it was a lot less than I thought it would be when I got there, and it was very underwhelming. And having gone through the journey of net worth millionaire, then liquid millionaire, and then TML, which I'll mention to you in a moment, um, or FYM, I realize that you want to track and measure properly. So the first stage of tracking your net worth is to know what all your assets are and all your liabilities are, and you minus your liabilities from your assets. Now, in financial terms, a balance sheet has the assets on one side and the liabilities on another. And a positive balance sheet will have more assets than liabilities. A negative balance sheet will have the opposite. So you want a, a positive personal balance sheet, which means you want to know what all your assets are and all your liabilities are, and you want to know the real value of your assets and liabilities. So a lot of people overestimate their assets and underestimate their liabilities. So I track my asset value as the market value minus 15% because you've got costs of sale. You may even have taxes. And, you know, when you sell an asset, usually you have to sell it for less than it's worth for speed. Now, when you have got assets minus liabilities realistically valued of more than $1 million, then you are a net worth millionaire. But you could— you're also a paper millionaire. So, you know, many of these billionaires, you know, who have a net worth of billions, they're not liquid billionaires. They are paper billionaires. Millionaires. Now that can have great value, it can have tax savings, and often it's better to have your net worth in assets than it is in cash, because if you've got a billion in cash going down 5% a year, that's what, 50 million a year you are losing? So that's a lot of money. So there's nothing— it's not that it's wrong to be a paper millionaire, it could be better than being a liquid millionaire, but it's not liquid. And the first goal you should have in increasing in your net worth is number one, accurately tracking it, and number two, having assets minus liabilities of a million or more, then you're a net worth millionaire, but you're not a liquid millionaire. And that's stage two. And stage two is liquid millionaire. Now, by the way, a lot of people say, oh, well, you're not a millionaire unless you're a cash millionaire. You don't want to be a cash millionaire. Why would you want to? Have a million in cash. That's 50 grand a year minimum that's going down in value. Plus, because it's there and it's the most liquid form of money, you'll end up spending it. You'll have lifestyle creep and your expenses will go up, and you'll end up pilfering all of that money. You probably know that lottery winners end up going bust sometimes as quickly as 2 years after they've won many millions. In fact, many of them are in a worse financial position 2 years later And many of them wish they hadn't won the lottery in the first place. So being a cash millionaire isn't necessarily the goal. Although when you're worth so much, you can just access millions in cash and it doesn't really matter. So your second goal is to be a liquid millionaire. And a liquid millionaire means you've got that many millions in net worth that if you needed a million in cash liquid, you could get it in 3 days or 5 days. You know, you could sell a million or two of stock, sell a million or two of Bitcoin, sell a million or two of gold and access that really quickly. So becoming a net worth millionaire is pretty cool. Like I said, I did it before the age of 31. And it's a tick, but it doesn't feel, you don't feel really rich. It's not enough. Then when you're a liquid millionaire, then you know you have real wealth because, you know, if there's a major event, a revolution, you need to elope to another country, you can access money fast. Then the third type of net worth is the FYM, the fuck you millions. You know, where literally your assets are worth tens of millions and you've got so much in income it's very difficult to spend. Now, people have often asked me how much is enough. Because they're worried that, you know, you earn a million, it's not enough. When does it ever end? Well, it depends on who you are and what your lifestyle is and if you've got a humble lifestyle or an extravagant one. But I live pretty extravagantly. I like to spend a lot of money because there's things in life that I like that cost a lot of money. I put my kids through really good education. I have 7 supercars. I like to travel well. I like to eat really good healthy foods. And these are all very expensive. But I found that once you get to TML, and TML is 10 million liquid, then that could be enough. That even with inflation starting to chip away at that, you can use that TML, 10 million liquid, to beat inflation, to continue to grow. And even your 20s and 30s, and you've got 50 years left, that's probably enough. But much less than that probably isn't enough. And then the fuck you millions is where you can do what you want, where you want, when you want, with who you want, and that's probably more like 50 million plus. So you've got 1 million on paper, TML, 10 million liquid, then 50 million plus. These are probably the 3 stages and levels of net worth, and how you track it is you invest in assets and you minus off your debt from your assets and what you're left with is your net worth. Now a couple of things to add. Some people when they say their net worth, they've put all their companies or their company on it and they've given their company some ridiculous multiplier valuation. So when I'm tracking my net worth, which I do every year, I've been doing it every year for about 15 years, I have two different valuations. One is my personal net worth and two is with my company or companies added on with a realistic sale valuation. And so obviously with my companies added on, my net worth is a lot more, but being able to sell that company for the right money at the right time, there's a lot of variables and it depends on the earnings multipliers and the EBITDA, earnings before interest, and etc. So I track both because what's real is what you can actually get in your hand, but you may not ever want to get it in your hand. So the paper valuation does have a bearing. Also for things like getting credit and debt and also for raising money for your companies, these paper valuations do have some merit as long as they're real and they're realistic. So I've not really done a video like this before, but hopefully it gives you some clarity on, you know, how to track and measure your net worth. Now, I remember a mentor of mine saying, you cannot master what you do not measure. And if you think about it, how do you know you're losing weight? Because you weigh yourself, you track your weight, or you measure, you know, your stomach, your waistline. And if it's going down, you know you're creating progress. So it's the same with your money. You cannot master it if you do not measure it. And I always say that there are different levels to building wealth is making it, managing it, maintaining or multiplying it. And if you measure your net worth like you measure, you know, your health and your fitness, you will be more— your— the health of your wealth will be much better. And a great way to improve your wealth is to join Rob.team. So Rob.team is my digital financial freedom platform. To help you start and scale a business, make, manage, and multiply money, to help you get your tax bill down and your income streams up. It costs less than 20 pence a day to join. You can cancel anytime. There's no ongoing contract, and there's hundreds of hours of courses, resources, masterclasses, and information to help you become an entrepreneur and build personal wealth. So the link, you just go and type into any webpage right now, rob.team. It's as simple as that. rob.team. rob.team is essentially my global money school. My mission is to help as many people on this planet get better financial knowledge. I now own the domain money.school and will be transferring that domain over. So rob.team is a global money school. To help you make, manage, and multiply money. Now I've had this platform for what, more than a decade, and when lockdown happened, I reduced the price by 80% to make it virtually free to help people through difficult financial times. And I said, I'll put the price back up when we're out of, you know, we're out of lockdown. Well, we're not out of the problems in the world with the soaring taxes and you know, high inflation and the soaring cost of living crisis. And now with Labour coming in, doesn't look like it's going to get any easier or better. And so this is why Rob.team is only still 20p a day, and you can cancel any time, and there's no ongoing contract. So just type in Rob.team. You can immediately start consuming the content from anywhere in the world, and the information starts very simply teaching you the fundamentals of building wealth and making money and launching a business. There's also an upcoming masterclass series on getting your tax bill down because actually your biggest expense is not food, it is not transport, and it is not housing. Food 11%, transport 16%, housing 28%. That's the total of the average amount of your income is spent on those. Source: Grok and data: American. However, a divorce is 50%, but tax is about 70% of what you earn and what you spend, including taxation and inflation. So these kind of lessons you're not taught in school, but you're taught in my money school, which— and the link is rob.team. So if you want this tax-saving masterclass, The 12 main ways to save, you know, a decent amount of that money in tax from my tax specialist. That, uh, Module 1 is already in rob.team. Modules 2 and 3 are coming in the next few weeks. That's all in my money school and the link is rob.team. So go now, join, claim that special bonus. There's also a 15-hour money mastermind university. So everything that should be taught in schools but isn't, I share as a bonus masterclass series, like I said, 15 hours of content. I had to keep it private within my money school because the system doesn't really want you to know how it makes money on you. Because when you know how it makes money on you, you can make money on it and you all of a sudden become empowered and you're not as easy for the system to earn money on, you know, on you. But I created that. I mean, that's what I would teach in schools and colleges if I were given the free rein, which of course I wouldn't be because— although I am speaking at Eton College soon, in about 3 or 4 weeks' time. So anyway, that's all in rob.team. R-O-B dot T-E-A-M. So remember this: you cannot master what you do not measure. There are 3 stages of developing your net worth. Net worth is assets minus liabilities. There's paper net worth and then there's real net worth. And the 3 stages are net worth millionaire, which is 1 million of assets after liabilities on paper. Then there is liquid millionaire, which is when you could draw within 3 or 5 days a million or more liquid. Cash millionaire is a completely irrelevant metric and target. People just, "Oh, it's about being a cash millionaire." Like, cash is a problem because of inflation, because of taxation, etc. So liquid millionaire is where you want to be. And then there's TML, which is 10 million liquid. And once you get to 10 million liquid, that's probably enough. You know, you're rich then. And then 50 million plus is the FYM, the fuck you millions. Thanks for tuning in. I hope you found it useful. Thanks for supporting me, by the way. It's been a bit weird on Facebook the last few months. I've had a couple of blips on getting some temporary bans. I still keep putting my work out there. I'll still keep working with Facebook to make sure that, you know, the content I bring follows their guidelines, but also helps you make, manage, maintain, and multiply money. So see you in Rob.team. Just type in Rob.team right now.