wealth tracking system

Wealth Toolkit: Wealth Tracking System

Wealth Toolkit:
How to Create Your Wealth Tracking System

A wealth tracking system is essential for building wealth. 

It allows you to keep track of your progress and organize your financial accounts in one place. An advanced system will let you do lots of other cools things too (see Bonuses below).

I'll show you the system I use for myself and clients. And I'll show you how to do the basics with free tools.

The Basics

At a minimum, your wealth tracking system needs to provide 3 values:

  1. Your assets - all the accounts, real estate, vehicles and other stuff you own.
  2. Your liabilities - all of the mortgages, car loans, student loans, credit card debt and other money you owe.
  3. Your net-worth - this is your assets (stuff you own) minus your liabilities (money you owe).

Over time your net-worth should increase.

As you pay down debts (liabilities), the "money you owe" side gets smaller. And as your assets grow overall, the "stuff you own" side gets bigger.

At least that's the way you want it. ๐Ÿ˜€

Here's a quick overview of the Wealthific system. Below that I'll show how to do the same thing with free tools.

The Wealthific Wealth Tracking System

Let's look at the Wealthific wealth tracking system. We use the most advanced, yet easy to use tracking software available.

This is available to all levels of Wealthific membership.

Adding assets and liabilities

The Wealthific system allows you to add your assets and accounts in two ways:

  • Automatically - by linking your secure account (recommended)
  • Manually - by entering the current value by hand

To add an account automatically, you simply look up your provider and then enter your secure username and password.

You may also need to use second factor authentication (2FA), which is recommended for important accounts. This is where an authentication code is sent via email or text, or using an authentication software like Google Authenticator.

This screen let's you search for your account provider:

Once your account is linked, the values are updated automatically.

While it's a good idea to consolidate accounts where possible, having accounts at different places is ok. 

The Wealthific tracking tool will combine the values of similar accounts for an easy overview.

For example, all your bank accounts (bank, credit union, savings, checking, etc.) will be combined for a total value. You'll still be able to see the details of each one when needed.

Here's what that looks like:

Investment accounts linked automatically will provide a bunch of really cool information for you. Way beyond just values and totals (see Bonuses below).

If you don't have secure online access to your accounts (wait, what?), you can still enter them manually.

You'll just have to set a reminder to update them each month or quarter.

Tracking net worth

The Wealthific tracking system will automatically calculate your net-worth. By subtracting your liabilities from your total assets, you'll get a running total over time.

The dashboard screen will show your net-worth when you log in.

You can also see the details as well as a net-worth history by using the tabs on the upper right.

This is one way the software keeps it simple while allowing you to dig deeper if needed.

I hope you can see how easy it is to keep track of your wealth with our system. Seeing everything in one place and updated automatically is great.

And that's before we look at the bonuses with this system. ๐Ÿ˜€

Creating Your Own Wealth Tracking System Using Free Tools

Now I'll show you how to do the same wealth tracking with free tools.

In this case I'm using Google Sheets, but it could be any free spreadsheet.

Setup sections for Assets and Liabilities

First create a new sheet. Name it "Wealth tracking system" or something similar.

Add columns for these types of assets:

  1. Bank accounts
  2. Property
  3. Investments
  4. Other

Then add the following liability types:

  1. Credit cards
  2. Loans

Here is a picture of what it should look like.

You can color code it to make it easier to see. I have assets in green and liabilities in read.

At the bottom of of each type I have a total of that column. You do this using the "Sum" function and highlighting the cells you want to total.

Next total assets and liabilities separately.

Finally I subtract (assets - liabilities) to get the net-worth in yellow.

Rename the sheet for the current year and month

At the bottom is a tab where you can rename the sheet. Make the name the current year and month (or quarter).

Then when it's time to update, just right-click and select "Duplicate" to copy the sheet. Then rename it to the new date.

You could even create a separate sheet where you track your net-worth over time. The charting function can give you a picture of your progress.

Just start simple and make wealth tracking a habit. Set a calendar reminder every month or quarter to duplicate the sheet and update the values.

Bonuses: 3 Cool Things You Can Do With The Wealthific Tracking System

The Wealthific tracking system is powerful. It can do a lot.

Here are 3 bonus features that you may like.

1) Investment Asset Allocation

Asset allocation means how your investments are divided between stocks and bonds, international vs U.S. based stocks, and big companies vs small companies.

Your allocation determines the amount of risk you're taking as well as your expected future returns.

The Wealthific tracking tool makes this information easy to see. No matter where your investments are, the tool will give you a picture of everything.

If you don't know what your allocation is, you may be taking too much (or too little) risk.

That means you may not reach your financial goals. Or cause you extra heartburn when things get rocky in the stock market.

You can then adjust your allocation to match a target risk and return.

2) Retirement Analysis

When will you be able to retire?

What if you could take your financial info and find out?

Using your income, savings, investments, Social Security, and goals, the Wealthific tool can look forward and tell you the probability of success.

Plus you can change the assumptions to see what effect they have.

If you're not at 80% or above, you can see which changes will get you closer to 100%.

That is cool.

3) College Funding Needs

No parent wants their kid to graduate college with huge student debt.

If you're saving for your child's (or grandchild) college, it would be good to know how much is enough.

In the Wealthific tool you can look up any specific college and get the most recent costs. Or pick the average cost if you're not yet sure.

With the College Funding Analysis you can see if there is a shortfall.

Then you can ask your rich uncle to help! ๐Ÿ˜‚

Summary & Your Next Steps

Having a wealth tracking system is essential for staying organized and keeping up with your personal finances.

Knowing where you stand and where you're going (financially) allows you to take the necessary steps to improve. And to gain confidence in what you're doing.

Remember, your system needs to provide 3 things at a minimum:

  1. Value of assets - A way to update the things you own
  2. Liabilities - The values of money you owe
  3. Net-worth - Your assets minus your liabilities

If you keep track of those values each month or quarter, you'll be doing great.

For easier tracking and more advanced tools, look at a software like our Wealthific wealth tracing system.

You can do a lot of really cool things and automate the data and tracking. And see details of your investments and financial future that is nearly impossible to do on your own.

Your Next Steps

Now that you know the basics of setting up your wealth tracking system, it's time to get to work.

Gather your financial information over the next week or so and start tracking!

If you need help or have questions, leave me a comment below.

Thanks for reading.

About the Author Tommy Sikes

Tommy is the founder of Wealthific. He's passionate about helping middle class Americans master their money and finances. When not helping people build wealth, Tommy can be found playing soccer, traveling and cheering on the Tar Heels. โšฝ๏ธ๐Ÿงณ๐Ÿ๐Ÿ˜€

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