What’s Your Net Worth?

We often hear about net worth when it comes to celebrities or billionaires. But the truth is, it’s something we should know about our own financial picture.

Your net worth is like a snapshot of your financial health. It tells you where you stand, helps you set goals, and gives you a clear sense of where you’re going.

What is Net Worth?

Simply put, your net worth is what you own minus what you owe.

Assets - Liabilities = Net Worth

Assets are things of value that you own, such as:

• The market value of your home

• Savings and chequing account balances

• Retirement accounts like RRSPs or TFSAs

• Vehicles, investments, or other property

Liabilities are what you owe:

• Your mortgage balance

• Credit card debt

• Student loans

• Car loans or lines of credit

Add up all your assets, subtract your debts, and boom, that’s your net worth.

Where Does a Mortgage Fit In?

For many of us regular folk, our home is often our biggest asset and that, alongside our mortgage, plays a big part in our net worth formula.

While the outstanding balance is a liability, your home itself is an asset. Over time, as you pay down the mortgage and your property increases in value, your net worth grows. That’s why owning a home can be such a powerful long-term financial move.

If you’re a homeowner, use your Property Assessment with your home’s value every year or two when you calculate your net worth. In recent years, many homeowners have seen a significant increase in the value of their homes which has given more flexibility in their financial preparedness.

Tips to Grow Your Net Worth

• Pay down high-interest debt first to stop it from eating into your wealth

• Contribute regularly to high-interest savings and retirement accounts

• Review insurance coverage to protect the assets you’ve built

• Make a plan to own (not owe) more of your home

• Look for opportunities to increase your income 

Why You Care About Net Worth

As we mentioned before, it seems we care more about actors and top CEOs (we’re watching you, Andy Byron) net worth versus knowing our own. This isn’t a gauge for “how much money you have.” It’s a temperature check for your buying power and how you can use it to plan for the future. 

Your net worth can help you decide when to refinance your mortgage, increase insurance coverage, or shift how you save. Whether you want to grow your savings, pay down debt, or invest in real estate, tracking your net worth shows your progress over time.

And you don’t need to be a financial expert to start tracking your net worth. It’s a critical part of the puzzle to understanding where you are today and where you’d like to be tomorrow. 

If you ever want help figuring out how your mortgage or insurance choices are affecting your net worth, reach out anytime. We’re happy to help you see the full picture.