{"id":2049,"date":"2008-09-11T12:00:03","date_gmt":"2008-09-11T19:00:03","guid":{"rendered":"http:\/\/getrichslowly.org\/blog\/?p=2049"},"modified":"2023-09-24T09:58:17","modified_gmt":"2023-09-24T15:58:17","slug":"why-i-dont-track-my-net-worth","status":"publish","type":"post","link":"https:\/\/www.getrichslowly.org\/why-i-dont-track-my-net-worth\/","title":{"rendered":"Why I don’t track my net worth"},"content":{"rendered":"
Earlier today I described net worth<\/a>, and asked if it were the most important number in personal finance. Many people believe that it is. For them, it acts as a motivator, a sort of “life scorecard”. For others \u2014 and I’m one of them \u2014 net worth is just another number.<\/b><\/p>\n As I do my finances, Quicken computes my net worth, but it seems largely irrelevant to me. I don’t even know what the number is at the moment. (I’d have to open Quicken to check.) There are two main reasons I don’t track my net worth more closely:<\/p>\n I recognize that net worth is an important part of my personal finance toolbox, but to me, it’s just one tool of many.<\/p>\n For net worth to be meaningful from one year to the next, it must be calculated the same way each time. But what’s the best way to calculate it? Here are just a handful of the dilemmas I face personally when trying to generate the number:<\/p>\n I don’t know the answer to these questions. As a result, I don’t track my net worth except for the Quicken auto-computation. I do look at that number every few months, but more out of curiosity than for any real purpose.<\/p>\n Don’t get me wrong \u2014 I’m not dissing net worth. For many people \u2014 perhaps for most<\/i> people \u2014 it’s a great way to “keep score”, to track progress while accumulating wealth<\/a>. But I feel like it doesn’t do a good job for me and for my situation.<\/p>\n If I find net worth inadequate, then what numbers are important to me?<\/p>\n Compared to these four numbers \u2014 numbers that measure my immediate needs and goals \u2014 net worth seems secondary.<\/b> I recognize that it’s an important reflection of my overall financial health, but I believe that if I focus on these smaller things, my net worth will take care of itself.<\/p>\n\n
<\/span>Learning the Rules<\/span><\/h2>\n
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<\/span>Keeping Score<\/span><\/h2>\n
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<\/span>My Advice<\/span><\/h2>\n