Let’s talk about net worth! I want to make this as fun as possible so you don’t get stressed out so here goes!

Donald Trump’s net worth has been much discussed lately so let’s use him as an example. When The Donald says he’s worth $10 billion that does not mean that he’s got $10 billion worth of gold coins in a vault that he can swim in like Scrooge McDuck. It means he would have $10 billion if he sold all of his assets and paid off all of his debts.

Your net worth is what you and your family are worth based on what you own and what you owe. You calculate this with a document called a Balance Sheet. Here’s the calculation:

Your Assets – Your Liabilities = Your Net Worth

This number may not mean a whole lot to you today but if you track it every year like a good CHO, then you will become aware of the slow and steady growth of your family’s wealth. That’s why we do this: to monitor and ensure progress! 

And do I have a spreadsheet to share with you to calculate your net worth? Baby, you know I do! I (heart) spreadsheets! Click below and I will email you a template to create your very own Balance Sheet! Get the download, pour a glass of booze, and let’s get all number-y!

And now for a funny net worth story. I have been tracking my net worth since I was 12. My father, a small business owner, was a firm believer that what gets measured gets done. Every summer he required me to create a Balance Sheet and submit it to him. Back then, my net worth looked something like this:  Please don’t be impressed that a 12 year old had $15,000. My parents were great savers and that money was technically theirs but my name was on it too so my dad let me count it.  Over the years, my liability rows have swollen considerably. Mortgage payments, car loans. You know. Thankfully my assets have swollen too. (There’s a good dirty joke in there somewhere…)

I’d love to tell you that my net worth has grown steadily over the years and that is mostly true but not always. Finances follow the natural rhythms of life: peaks and valleys. But the point is that I can track and usually explain to myself when we are up and when we are down in the net worth department and I can compare to years past to get a sense on general growth and portfolio performance.  So, dear CHO, your mission, should you choose to accept it, is to calculate your net worth using the Balance Sheet I have provided. You do this for yourself if you’re single or for the entire family if you’re in one.

For Extra Credit, you must revisit your Balance Sheet at regular intervals. The SEC requires public companies to disclose net worth quarterly but thankfully CHOs are unregulated so you can do this whenever you want. I do mine 2-3 times per year because I’m obsessive but I advise you to do it at least once per year.

Now before I leave you, a a few tips for filling in your spreadsheet:

• Don’t get hung up on real estate value. Use Zillow and use that as a ballpark. If you’re not selling your house anytime soon, don’t freak out. Your home value is not money in your pocket. It’s just an estimate of what your home is worth.
• Use Kelly Blue Book to get the current value of your cars.
• You can get your liabilities from your online accounts. Login to your mortgage, car loans, credit carts, etc and see what the balances are. That’s all. Not hard.
• Your children, spouse, in-laws, and pets are neither assets nor liabilities. Slavery has ended so they can neither be bought nor sold. They may feel like a liability but they are not. They do not go on this spreadsheet unless you own a trademark on their body parts like J Lo’s butt.

Okay now! How was that? Any questions? You know how to find me! I’ll gladly help you get started because we’re in this together!