Marcus is 36 and earns a salary most people would envy. The pay lands, the bills clear, there’s usually something left over, and yet a low, persistent question follows him around: am I actually getting ahead, or just spinning faster? He could tell you his income to the dollar. Ask him what he’s worth — what he’d have left if he sold everything and paid off everything — and he goes quiet. That blank is the whole problem, because income is the number we obsess over and net worth is the one that actually keeps score.
The two get confused constantly, but they measure completely different things. Income is the water coming through the tap. Net worth is the level in the tub. You can have a fire-hose income and a tub that never fills, because the drain — spending, debt payments, lifestyle — is wide open. Plenty of high earners are quietly treading water, and plenty of modest earners are quietly getting rich, and the only way to tell which one you are is to stop staring at the tap and measure the tub.
Measuring it is refreshingly simple. Net worth = everything you own (assets) minus everything you owe (liabilities). Assets are the real things of value: cash, investments, registered accounts, your home, your vehicle. Liabilities are the debts: mortgage, car loan, credit cards, lines of credit, student loans. Add up one side, add up the other, subtract. The number you get can be a pleasant surprise or a sobering one — and both are useful, because for the first time you’re looking at the actual scoreboard instead of guessing from the size of your paycheque.
Here’s the part that does the real work, though: it’s not the number, it’s the trend. One snapshot tells you where you stand today; a line tracked over time tells you whether your choices are working. So you check it quarterly — four times a year, same routine — and watch which way the line moves. And the moment you start watching it, something shifts in how you decide. A purchase stops being just “money spent” and becomes “net worth moved.” Paying down the card isn’t a chore, it’s the line ticking up. Tracking the number is what quietly changes the behaviour, long before any budget does.
Marcus sat down one Saturday and listed it all out — the savings, the RRSP, the condo, the car, against the mortgage and the line of credit. The number was lower than his income led him to expect, which stung for about a minute and then turned into the most motivating thing he’d seen in years. He set a reminder to redo it every quarter. Three quarters later the line was visibly climbing, and the nagging question had a real answer at last: yes, he was getting ahead — and now he could prove it.
Calculate your net worth — everything you own minus everything you owe — and track the trend every quarter. It’s the real scoreboard, not your income; a fat paycheque and a flat net worth means you’re treading water. Watching the line move is what changes behaviour, because a purchase stops being “money spent” and becomes “net worth moved.” This weekend: list your assets and your debts and write down today’s number.
FAQ
How do I calculate net worth?
Add up everything you own — cash, investments, home, vehicle — and subtract everything you owe, like your mortgage, loans, and credit cards. The difference is your net worth.
What counts as an asset?
Cash and savings, investments, registered accounts (TFSA, RRSP), your home, vehicles, and other things of real resale value. Skip the trivial stuff — you’re after the big picture, not an inventory.
Is my house part of net worth?
Yes. Include the home’s market value as an asset and the outstanding mortgage as a liability. Your home equity — value minus mortgage — is often a big share of net worth.
How often should I track it?
Quarterly is enough to see the trend without obsessing. Four check-ins a year shows you whether the line is climbing — which is the part that actually matters.
Next weekend — the smartest order to wipe out the debts dragging that number down: The Right Order to Kill High-Interest Debt (link goes live Oct 3).