Why Net Worth?
This Net Worth series of posts helps me keep track of the progress I am making towards my goal of financial freedom and early retirement. Net worth is the sum of all the assets you have, minus the liabilities. Your assets include investment accounts, savings accounts, and property, while your liabilities include debts such as mortgages, student loans, or car payments.
I do not include my car (or a house, as I am renting) for two reasons: first, I intend to drive my car as long as I can safely hold on to it. Secondly, my main goal for tracking my net worth is to save up enough for early retirement. For early retirement purposes, I only want to include assets that will continue to produce passive income.
My goal net worth is $1,000,000, which is 25x my annual expenses. This will allow me to withdraw at a generally accepted “safe rate” of 4%. If you have any goals around money, I highly encourage you to track your net worth as well! It’s a great way to see how you are moving closer to your goals each month. Posting my net worth every month is a great way to stay accountable to my goals.
Net Worth Series 2017
Net Worth Series 2016