Five years ago I began tracking my net worth since I was starting to feel behind. I scrounged every account that I could find to run up the proverbial score as much as I could. Now I definitely do not think this was healthy, I only viewed money as a simple score for how I was doing in life.
Click here for the Net Worth Tracker Template.
To give myself a break it was in the midst of COVID and I had luckily kept my job so I was just dumping almost half of my income into investments. Yet it did give me insight into how I was doing and showed my hard work was paying off.
I kept it up though, only updating once a quarter. After I got married my wife and I started doing it together. I’ve learned a few things through tracking over the past five years and I’d like to share them.
1. It stops me from compulsively checking my investment accounts.
I used to check my brokerage and Roth IRA accounts multiple times a day but having a built in time to check has me checking less which has greatly reduced my stress of watching the day to day market turmoil.
2. It prevents rash/emotional decisions.
“Try and avoid the worst hazards of behavioral investing. Follow the basic rule that I follow: Don’t peek. Don’t look at your account. Throw the 401k statement in the trash when it comes.” -John Bogle
John Bogle recommends that and I can’t argue. I have my investments that I have chosen and while I do change them on occasion I never change them based on what the market is doing day to day. I have saved myself thousands by not doing anything, the amount of times I would’ve sold at market low when things look dark if I had checked more often.
3. Gives me a clear progress report on my goals.
Like many, I have a lot of financial goals. Some are shorter term, like seeing when my vacation fund can get me to Machu Picchu, others are for the long term like when can I retire. Knowing my net worth allows me to run some quick projections(with my BAII Plus of course) to gauge where I am. Whether I’m trending ahead or behind, having that quarterly baseline gives me the information to decide if I can pull back a bit or if I need to lock in.
4. Honestly, it’s just fun.
Who doesn’t like seeing a chart that goes up and to the right. Especially at the beginning when my contributions made large swings in my total net worth, seeing the large increases felt great and was highly motivating. Also it’s a fun ritual now that we look forward to each quarter end.
I know this isn’t a ground breaking idea, but it took a few years for me to even start. I hope it inspires you to start your tracking journey today. I’ve linked a free, simple template, the same one I still use today.
Alex Bronner, CFA
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