Do you feel like you don’t know where to start with your finances? Ex-Marine David Pere is here to help. In this video, he explains why you absolutely need to track your net worth.
No time to watch the video? No problem! Here are the highlights.
Your net worth is the value of everything you own minus your debt. Even if you buy a property worth millions, if you have debt on that property, your net worth reflects that debt.
Track your net worth to control your spending
Net worth is one of the most useful methods for tracking your personal finances. Knowing your net worth can help you determine where you are spending too much money. For example, if your net worth is dropping, you will need to figure out why.
Net worth is more than just income
Income is not the only factor in your overall wealth. It’s also how much you spend and how you spend it. Not all debt is bad. Getting into debt that ends up making you more money is good debt. Bad debt includes things like car loans and consumer debt. Spend your money wisely to stay in control of your net worth.
The Baader-Meinhof phenomenon
When you increase your awareness of something, you begin to see it around you more frequently. This is why it’s so important to write down your goals. The more you focus on your vision, such as increasing your net worth, the more your brain recognizes the opportunities to get there. Want to know more about this phenomenon? Check this resource.
Track your net worth every quarter
What gets measured gets managed, so track your net worth often. If you track your net worth quarterly or more, you’ll better understand what’s affecting it. You will notice which stocks are increasing your net worth and can put them to work. Use a spreadsheet or app to more easily track your net worth.
Factors that increase your net worth
Your net worth will generally increase as you increase your assets and decrease your liabilities. For example, if you get a huge bonus and spend it on vacation, your net worth will not increase. But if you use that bonus as a down payment on a house, your equity will improve. Plus, every time you repay a loan, your net worth increases.
Improve your financial preparation
David Pere is a former active duty Marine who is on a mission to educate the military community about financial preparedness. Most people hear the term and roll their eyes, but Pere wants everyone to know that readiness can be achieved – without too much effort. He teaches personal finance and real estate investing to service members to help them increase their savings and increase their chances of achieving financial freedom.
Want to know more about Father? Discover the soldier to millionaire websiteand connect with him on instagram Where Facebook. Subscribe to his YouTube channel here! Take a look at David’s book – The No BS Guide to Military Life here.
Looking for other ways to be financially strong? Check out what’s new on our Mighty Money page.