Summary
Your income shows activity. Your net worth shows progress. This guide explains why tracking net worth matters, how to set it up, what to include, and how to connect it to your corporate and personal finances.
1. What net worth actually measures
Net worth is the simplest measure of financial health:
Assets – Liabilities = Net Worth.
It’s a moment-in-time snapshot of what you truly own after debt. Salaries fluctuate, business cash flow swings, and investments move—but your net worth trend tells you whether you’re moving forward overall.
“Tracking your net worth is like a report card for your financial life—it doesn’t lie.”
For many corporation owners, this number combines both the corporate and household sides of the balance sheet.
2. Why most people don’t track it (and why they should)
The most common excuses:
- “I don’t have time.”
- “My finances are complicated.”
- “It’s just depressing.”
But these are precisely the reasons to track it. Without measurement, financial planning stays reactive.
Net worth tracking:
- Simplifies complexity. You see the big picture in one line.
- Reduces anxiety. Uncertainty shrinks when you quantify it.
- Motivates discipline. It turns saving and debt repayment into a scoreboard.
In the episode, Tré said:
“You can’t manage what you don’t measure.”
That principle applies equally to businesses and families.
3. Building your first net worth statement
Start with a simple two-column sheet:
| Cash & savings | Credit cards |
| Investments (RRSP, TFSA, non-registered) | Lines of credit |
| Real estate | Mortgages |
| Corporation shares / retained earnings | Business debt |
| Vehicles / valuables | Loans |
Steps:
- List estimated values (round to nearest $1,000).
- Subtract total liabilities from assets.
- Record the date and save the file.
This becomes your baseline. Update it at least once a year. I keep a net worth statement for my clients.
If you own an operating corporation, select a reasonable valuation method and stick to it. (I suggest a multiple of your EBITDA.) This ensures your corporate value is reasonably reflected.
4. What to watch over time
The absolute number matters less than the trend.
Aim for consistent upward movement—whether by reducing debt, increasing savings, or growing your business value.
Look for:
- Asset growth (investments, retained earnings).
- Debt reduction.
- Shifts in ratios—for example, assets becoming more liquid as you near retirement.
“When you track your net worth, short-term market noise stops feeling personal.”
5. Connecting business and personal finances
For corporation owners, net worth tracking highlights how intertwined your business and household are.
Use two layers:
- Corporate net worth: retained earnings, investments, business value.
- Personal net worth: everything outside the corporation.
The goal is coordination. Your corporate surplus can be intentionally moved into your personal balance sheet—through dividends, investments, or insurance strategies.
“You run financial statements for your company. Why not for yourself?”
6. Making it a habit
To make tracking sustainable:
- List your data sources (download account balances from your bank or investment platforms).
- Block time every year.
- Review progress, not perfection.
- Celebrate milestones (like paying off debt or crossing a net-worth threshold).
Consistency compounds clarity.
7. What to do next
- □ Create a basic spreadsheet today.
- □ Add assets and liabilities, total the difference.
- □ Save and date the file.
- □ Schedule a 6-month check-in.
- □ Review trends, not just numbers.
- □ Discuss results with your planner to align tax, investment, and debt strategies.
Tracking your net worth isn’t about chasing a number—it’s about awareness. For corporation owners, it’s also about control: knowing how your business and personal finances interact.
If you haven’t started yet, this week’s episode walks you through the framework, common mistakes, and practical examples in this episode of The Plain English Finance Podcast.