How do I calculate net worth when I can’t even bake a cake?

One of the things I am publicly tracking on my Net Worth / Wall Chart posts is net worth. Here I want to explain what net worth is, and also how you calculate it.

To calculate net worth, all you need to do is add up your total value of your assets, and subtract the total value of your debt.

Why Track Net Worth at all?

Before I go into the details of how you can go about calculating your own net worth figure lets talk about why it’s important to track net worth in the first place!

It gives you an accurate look at what your wealth looks like today.

You might have student loans still, but your checking and retirement accounts are growing because of your great new job. Net worth helps you cut through the clutter and see a simple reflection of your current financial state.

Tracking it over time is a great way to see progress.

If something happens and your net worth number has gone down in the last 6 months, you can figure out what you’ve been doing and how you should best react. Have you taken on new debt but don’t have any assets to show for it? Has the stock market taken a hit? (it has here at the end of 2018!I) But on flip side, seeing positive changes in Net Worth suggest that you’re doing something right…. Or you’re experiencing the benefits of a stock market boom!

It’s not all about income.

Calculating net worth takes the pressure off of securing a high income, and places importance on what you can do to make sure you KEEP that money. That’s really what the margin studies blog is all about!

Puts your assets and debt load into perspective.

You might be proud of your $300,000, but if your mortgage is still $290,000, the house is only adding $10,000 to your total net worth number.

Calculating Net Worth.

Alright, let’s actually calculate this thing. There’s nothing to really worry about here. The number might not be large, but knowing where you are today will help you make decisions about where you move towards tomorrow.

Add up the value of all of your assets.

For me, assets are anything you own that have a monetary value, however some people argue about what’s actually an asset and what isn’t.

Robert Kiyosaki, in Rich Dad Poor Dad, says that an asset is anything that you own that puts money into your pocket. Put a different way, anything that you own that pays you over time or produces cash flow.  This is the definition I like to use as I look to build website properties or look for ways to spend my budget’s margin every month. For calculating net worth, however, I like the expanded definition that calls it anything of monetary value.

Assets are what you own that have a monetary value, that can be broken down into a few different categories.

  1. Cash — Add up the amount of money you have in Checkings, Savings, or CD accounts, as well as any cash you may have in your wallet, or under your mattress.
  2. Physical Assets — Add up the value of the THINGS you own. Things like your house, your car, the gold bullion that your paranoid uncle finally convinced you to purchase, your collectible pokemon cards, beanie babies and old ipods that you never threw away. This category can be pretty expansive, but go ahead and put a rough estimate on these things.
  3. Investments — Add up the value of your investments. This can be your 401k, 403b, brokerage accounts, but also the cash value of your life insurance, failing cryptocurrency coffers, and other business equity investments you may have.

Ok, so add up all of those, and then celebrate. Congrats you have things! Next we get to see how long we are actually able to celebrate.

Adding up what you owe.

So this one isn’t as fun. But it’s time for us to take a look at our debts, and how that’s affecting our total financial picture.

So Add up your:

  1. Mortgages
  2. Student Loans
  3. Car Loans
  4. Credit Cards.
  5. Money you still owe your rich uncle, or your parents.

You did it.

Putting it all together.

So now you have an assets value, and a debts value, so now we can finally calculate net worth.

Asset Value – Debts Value = Net Worth!

Even this lion is excited to calculate net worth

So that was great an all, but is there an easier way to do it?

Funny you ask that…. yes.

Get Rich Slowly

JD Roth, who blogs over at Get Rich Slowly,  has created this spreadsheet that you can use to easily run the calculations that we walked through above. This is actually the tool I use every month to update my net worth, I just have adjusted a few of the columns to reflect my current needs, and also added a section underneath to track the progress.

Personal Capital

I have logged into Personal Capital a few times, however, at this point it isn’t my go-to place to track my finances.  It definitely seems to get the attention of many of the financial bloggers, I intend to look into it further over the coming months, and I will report back to you on what i’m finding!

Mint is a financial software that will look at your transactions and automatically calculate out a sample budget for you, once you’ve connected your bank accounts, as well as information regarding loans,  mortgages and retirement accounts, it will display a pretty simple net worth calculation for you.


If you’re a YNAB user like I am, you will see that there’s a report you can run that will calculate net worth, but in order for that to line up with what we’ve previously calculated, you’ll have to add in the non-account based asset values you have ( Houses, pianos, grandma’s cookie cutters).

If you’re not a YNAB user yet, what’s stopping you?

How to improve your net worth

There are a lot of things you can do to improve your Net Worth, but ultimately it can be distilled to this: Buy more assets and reduce your debt.

If you look at JD Roth’s Spreadsheet, you have a clear breakdown of what goes into the formula as you calculate net worth.

Add more money to an asset category to make your number go up!

Pay off your credit card to make your number go up!

Decide to go around the world vacation without an income in place, and watch your number go down!

When you’re looking for ways to make your net worth improve, I think this is where the Rich Dad Poor Dad definition of asset is most important. Assets are things that put money back in your pocket. Spend your money on things that put more money in your pocket. Examples of Rich Dad type assets are: Paper Stocks, Index Funds, rental real estate, and business ownership.

I hope that this was helpful for you! It’s important to recognize that this isn’t a race, and even if you aren’t happy with your current net worth, at least now you know where you currently stand. From here you can start making the right decisions that lead to a greater net worth.  Continue to calculate your net worth over time to track your progress!

It’s a process. Whether you’re currently at day zero of the process, or 15 years in, cheers to you and cheers to the process.

November Wall Chart and Net Worth Report

November's Wall Chart and Net Worth Report

Last month, I kicked off my first ever Wall Chart Report on the Margin Studies Blog. These reports are modeled after the simple personal finance system found  in Vicki Robin’s Your Money or Your Life. This month i’m going to publish my first ever Net Worth Report so that I can remain accountable both to my self and to you all!

According to the book, each month, you track the money you make and the money you spend. You then take those numbers and plot them on a graph that you hang prominently on the wall so that you can see them and are reminded of your progress every time you see them. I have roommates, so I’m hesitant to actually hang up a physical chart.

I use the YNAB software for all of my budgeting, and I LOVE it. If you haven’t heard of it, or decided on how you want to track your finances, I have it on my list to create a full review for you, don’t worry.

November’s Wall Chart Report:

So this was another big month for my income- but I threw a majority of the extra income at a credit card balance that got a little out of hand this summer. I think my income will cool off for a few months, as I had an extremely busy summer, and being self employed definitely has periods of feast and famine! I felt that I could have reduced some of my spending, as I traveled and ate out pretty frequently, but I guess there’s always next month?

The numbers:

Income: $15,460.30

Spending: $2139.99

Margin: $13,320.31

Margin Studies November Wall Chart
Now that there’s more than one point, lets actually publish a graph 🙂

Net Worth as of December 2018: $75870.79

This number is an increase of $9,816.61 over what I had calculated in on November 7. It’s quite the jump! I don’t anticipate these kinds of months being the norm, but having more of these months would certainly put me on the fast track to being debt free and later financial independence!

November Net Worth
If only i would have kept track of this monthly the rest of this year, this chart would actually be helpful…

How did November go for you? How are you going to continue to work towards your goals even though the holidays can be expensive?




Am I still playing catchup?

So at this point, I’m taking one afternoon a week, to dedicate time in within the business day to work on the Margin Studies blog. It’s been a BLAST so far. My work is in digital marketing, so sometimes it’s hard to force myself to productively stare at a screen when it’s time to head home for the night, but by carving out an afternoon and dedicating it to me and my my own side project, I’ve been able to remember that i LOVE doing this kind of thing, and learning ways to build out this project has been fun.

Letting the guilt creep in.

Last week, I wrote out a bit of my money journey, and it was very hard to do. I guess I’m not trying to parade myself as a guru on this website, but to clearly lay my cards on the table and talk about shortcomings isn’t easy! I also found that revisiting some of the bodies in my financial closet made it easy to feel a sort of imposter syndrome to write for this website. Who would want any sort of financial advice from me? … Well…. carrying on.

While I was writing out last week’s article, I went to look up a statistic that I had heard while i was in my post-graduation slump. The one where it said that half of the students of the university class of 2010 were either unemployed or unemployed.  I ran into this article.

Many college grads from the Great Recession are still trying to catch up

In the article, Tami Luhby talks about the fact that many college grads that graduated during the Recession following the financial crisis of 2008 still feel like they fell a little behind. Some of us still feel like we’re just playing catchup

I’ll admit, while reading it, it brought back a lot of my hard feelings around the job search market. I didn’t like the way it made me feel. It validated a lot of the victim mentality I had from 2011 through 2014.

Life was hard, but we’re past that!

I’ve been fully supported by my own business for just over a year and a half, and I can safely say that I’m further from needing a new job than I was when I started.

Do I feel like I’m behind my peers? or the people a few years younger than me? Sometimes! I tend to relate well with people younger than me anyway, so I tend to think of them as peers anyway.

The Great Recession may have made it hard for my generation to get their start, but diving into the fundamentals of personal finance will help us finish well ahead of the pack. That’s why this website exists!

Let’s work on ways to improve our skills and make more money.

Let’s take an active look at our spending regularly and find ways where we can save.

Let’s create a big margin between what we make and what we spend every month, and then let’s do smart things with that money, so that money can work for us.

If we work hard at this, it will be everybody else will be playing catchup to us!


online banking gave me a panic attack: my money story

I didn’t exactly burst onto the success train after college graduation.

In fact, I feel like we can safely say that didn’t happen.

It was summer of 2010 and I was leaving a prestigious school and a well laid-out path for the next leg of my journey into adulthood. I wasn’t sure whether I was ready or not, but either way i was going. I had been hearing rumblings about the financial crisis and that the job market wasn’t going to be easy, but I figured that the fancy name on my degree was going to more than make up for it.

Bring it on world.

‘Successful’ College Grad Living at home. AKA: here’s where I sound like the Milennial that all the baby boomers like to bash.

So I moved back home for what I was hoping would be a couple of months and started the job search. It wasn’t easy. but I also had no idea what i wanted to do when i ‘grew up’… I had a broken up college experience: two years at the local university, and then two years at the larger fancier school. I ended up with an economics degree, but also with no real desire to work in economics. My college was financed with a couple small merit scholarships and student loans, and graduated with about 45k worth of debt.

2010 ended up being one of the worst times to ever be a fresh college graduate. I think a year or so after i was out of school, I remember reading an article about 50% of the Class of 2010 was either unemployed or underemployed, and though right out of school, I wasn’t unemployed, I definitely remained under employed for a couple years.

Bank Teller Job. Aka:  here take all this money, don’t ask me about how much is in my accounts tho 🙁

That fall was rough for me, and even though I didn’t really know it at the time, some of those early rejections found me diving into a bit of a depression. I took a job as a bank teller, and was excited to move into that environment. I was excited to learn about money and start making some. A couple months into it, we received a new manager, and that manager started drastically reducing my hours and soon i found myself making barely enough to pay my student loan payment every month.

And that’s when I first started carrying a credit card balance.

I didn’t want to change my lifestyle. My depression was stopping me from making sound decision both with my money, but also with how i was spending my time outside of work. I was addicted to a video game, and also grossly overweight, which caused me to eat WAY more than i should have.

That credit card balance slowly started to grow.

Local Sales Guy aka: plez buy all my products!

In fall of 2013, I left the bank to take a sales job at a local business. They were excited to have me come in because I was going to be their first outside sales representative. Things were starting to go well for me, but a mistake made by our order fulfillment caused the entire office staff to need to be laid off in order to make payroll for the production floor.

When I found myself without a job, I felt pretty burned by sales. The message I internalized was: If you had been a good enough sales rep, you wouldn’t have ever been fired. While I was out looking for work, I continued to spend the same amount of money on video games, on huge meals, and on various things. Oh yeah, I’m still living at home at this point.

That credit card balance was really growing now.

The job search wasn’t very fruitful. I had 6 months of benefit, but I was using the time to see if i could get a freelance business to support me. I had been learning HTML and CSS and WordPress development during the course of the previous couple years, and I wanted to see if i could make that into a career. But it didn’t work.

Meanwhile, i’m avoiding going on the banking website, because even though my checking account was remaining around the same, my credit card was creeping closer and closer to the limit, and I didn’t want to get the card declined at all, I always made my payments… but they were always small payments. I was the bank’s best friend. and they made a lot of money on my interest. However, I remember very clearly one day logging into the online banking and nearly having a panic attack because I didn’t want to see what all was going on with my money.

I was a wreck.

One day, in the mail, I received a letter from the bank congratulating me on my good credit card behavior and that they had extended my credit limit. I know that seems like a ridiculous thing to the FIRE community, but that was GOOD news to me in the current state i was in.

Blue Collar aka: you WILL eat your humble pie and you will LIKE IT

In the fall of 2014, I had run out of unemployment benefit, and my checkbook was running out of money. Doing the web design thing wasn’t working. Getting another job in an office wasn’t working. So I finally decided to eat my slice of humble pie, and started working a job in a factory.

Honestly,  swallowing my pride and taking a job that was ‘beneath me’ was the best thing that ever happened to me.

My coworkers weren’t exactly America’s Finest, but I wasn’t automatically better than everybody else.

I started losing a lot of weight (by fall of 2015, I had probably lost 100 pounds).

I started getting my finances in order and started using a budget for the first time.

In summer of 2015, i was able to buy my first house (also the first time I moved out my parents house since college… I was 27. thanks mom and dad, I owe you)

My side hustle as a web designer had started to gain some momentum too. I think the old adage of “if you want to get something done, ask a busy person to do it” really applied here.

The rest is history, really. It’s the story I’m living now.

I rebuilt from that factory job, I started getting really busy with websites. I finally quit the factory job in the spring of 2017 to go full-time building websites. My credit card was paid off in 2017… only to have the balance shoot back up this last year because I didn’t prepare well for taxes this last spring… I think that’s a post for later.

My money story is turning around, and I have my sights set on a big goal: financial independence. I’m not 100% on the right track yet, but I’m on my way.  That’s what this blog is about: Learning how to earn more. Learning how to spend less. And learning what do with the difference.  View my first wall chart report here.

I hope you’ll follow along on the journey.

October Wall Chart Report

In August, as I reported an earlier post, I started reading Your Money or Your Life, by Vicki Robin, and I intend on sharing my monthly updates with this. So here’s my wall chart report for October.

In Your Money or Your Life, Vicki Robin outlines a step by step program to repeat on your way to financial independence. One of those steps is simply tracking your income and expenses and then recording the two numbers on the same graph that you hang on the wall so that you can see it over and over. I live in a house with roommates. I haven’t fully decided where I will post this, but it’s my intention to start the chart officially today.

I’m currently working as a self employed contractor for a large organization, so I definitely have a seemingly large income this month, and I’m hoping that it’s a trend that I can continue in the coming months.  I plan on investing my time on building out a social media agency as well as really dive into some GaryVee-inspired garage sale  and craigslist flipping.

The numbers:

Income: $10,078.05

Spending: $2365.80

Margin: $7,712.25

One note on October’s margin number. I generated these numbers using a report from my budgeting software that i’ve been low-key obsessed with over the last month, YNAB. I’m not immediately able to send 7700 dollars over to a vanguard account…  There’s taxes to account for, there’s house repairs to save for, and there are debts to begin to pay down.

I will look to writer further about the impact of using a budgeting app and the way it’s affecting my financial behaviors. However, one thing worth mentioning today is that tracking my income/expenses has become a daily activity for me. I actually look forward to opening up the app and organizing the transactions!

This blog is still new to me, and I’m still developing what a set of posts will look like in a given month. But, the wall chart will be a great way to keep things open and transparent.