Friday, August 8, 2008

Another Way to Look at Net Worth

I've been using NetworthIQ to calculate my net worth on a monthly basis, and it's an excellent tool: free, easy, and helps me see my progress (stumbles and all) visually. You can see my graph on the sidebar. Here is the most recent version when you click into my profile:

This graph shows how my net worth is generally increasing over time, but it doesn't tell the entire story. I decided to plot a "crossover" graph with my assets and debt amounts plotted monthly:

This tells the same story, but from a slightly different perspective. As you can see, my assets jumped up from $0 to close to $3,000 fairly quickly, then dropped a bit and have recently started gaining slowly. My debts have reduced slowly, then increased, then decreased slowly, then increased again, and now are decreasing again, slowly.

Here I can see quite clearly the "flattening" of both my asset and debt lines. This is bad! My net worth won't be positive until the lines intersect - when I have more total assets than total debt. I need to work on increasing the slope of that green line while causing that red line to fall precipitously.

Hard work, as always. But eminently doable. Simply a matter of discipline.

No comments: