Your net worth is the difference between everything you own (assets) and everything you owe (debt)1 (Ryan Haiss, Twitter Aug. ‘25)
Assets include: Cash, investments, real estate, business ownership, and valuable personal property.
Debt includes: mortgage owing, credit card debt, line of credit, student loan, car loan and any other personal debts or loans.
Net Worth = Total Assets – Total Debts
Why should you care about your net worth?
- It tells the real story behind your financial life, beyond your paycheque and monthly bills
- It represents your financial position
- It helps measure progress toward financial goals (i.e. retirement)
- It shows how well your money is working for you over time
- It highlights problem areas you might overlook
How often should you calculate it?
- Ideally quarterly or annually
- Doing this exercise will enable you to adjust your budget and savings plan. It also keeps your goals top of mind and even a simple review builds awareness
What does your net worth number really mean?
- Positive net worth: You own more than you owe (this means you are building wealth) Keep it growing by saving and investing
- Negative net worth: You owe more than you own. This is common, especially if you have a mortgage, but it’s a signal to prioritize debt management and asset building
- Neither is permanent. Net worth fluctuates with market changes, debt paydown and new purchases
How to boost your net worth?
- Pay down high interest debt
- Build a cash reserve – this prevents new debt when life surprises
- Invest using accounts such as TFSA’s and RRSP’s
- Increase your income, this accelerates growth
- Be mindful of spending: track and reduce unnecessary expenses without sacrificing quality of life
- Reevaluate big assets: keep tabs on home equity and business value etc.
Pitfalls to watch for
- Forgetting to update assets values regularly
- Ignoring liabilities like small loans or credit card balances that quietly add up
- Not coordinating your net worth tracking with your overall financial plan
- Letting emotions drive financial decisions
Tracking your net worth isn’t about obsessing over numbers – it’s about gaining control and clarity. Remember, wealth isn’t just income, it’s what you keep and grow over time.
Sincerely,
Mike Busby
THE COMMENTS CONTAINED HEREIN ARE A GENERAL DISCUSSION OF CERTAIN ISSUES INTENDED AS GENERAL INFORMATION ONLY AND SHOULD NOT BE RELIED UPON AS TAX OR LEGAL ADVICE. PLEASE OBTAIN INDEPENDENT PROFESSIONAL ADVICE, IN THE CONTEXT OF YOUR PARTICULAR CIRCUMSTANCES. THIS ARTICLE WAS WRITTEN, DESIGNED AND PRODUCED BY MIKE BUSBY FOR THE BENEFIT OF MIKE BUSBY WHO IS A FINANACIAL ADVISOR FOR BRANDON LINDSAY INSURANCE AGENCIES, A TRADE NAME REGISTERED WITH INVESTIA FINANCIAL SERVICES INC., AND DOES NOT NECESSARILY REFLECT THE OPINION OF INVESTIA. THE INFORMATION CONTAINED IN THIS ARTICLE COMES FROM SOURCES WE BELIEVE RELIABLE, BUT WE CANNOT GUARANTEE ITS ACCURACY OR RELIABILTY. THE OPINIONS EXPRESSED ARE BASED ON AN ANALYSIS AND INTERPRETATION DATING FROM THE DATE OF PUBLICATION AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. FURTHERMORE, THEY DO NOT CONSTITUTE AN OFFER OR SOLICITATION TO BUY OR SELL ANY SECURITIES. MUTUAL FUNDS OFFERED THROUGH INVESTIA FINANCIAL SERVICES INC.
