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The Importance of Tracking Your Net Worth
When measuring your financial success, it’s essential to start by monitoring your net worth. This is the sum of all assets (bank accounts, retirement accounts, investments) minus liabilities (student loans, mortgages and auto loans). While compiling all this information into one spreadsheet may seem overwhelming at first glance, doing so is absolutely essential if you want to reach your objectives.
Your net worth is an invaluable tool for planning and achieving your financial objectives, especially when you’re young and just starting out. It can help determine where to focus your efforts and prevent overspending on unnecessary items.
Wise Pocket Products
The Wise Pocket Company is a startup that creates socks with built-in pockets to hold phones, keys and other belongings. Founded by 13-year old Sofia Overton in Bentonville, Arkansas by chance, this business venture has taken off since.
Sofia was spurred to create her product after watching Shark Tank with her cousin. Observing how her cousin kept her phone in her boots, Sofia felt it was an unnecessary waste of space and decided to design a solution that was comfortable, user-friendly, and budget friendly.
She then created socks with a 6 inch pocket on top, big enough for holding her phone or other valuables. To raise money for her startup business, she launched an IndieGoGo campaign.
Once her campaign raised over $10,006, she received her first orders of socks in white, black, and “splatter paint.” Each pair cost $15.
Her mission is to give back by shipping socks to homeless children’s shelters across America. Additionally, she plans to produce pocketed leggings in the near future.
Many young entrepreneurs have an excellent idea that needs to be carried out correctly. The wise ones take the time to ensure their products are as perfect as possible before they hit the market.
Entrepreneurialism can often lead to debt, making tracking your net worth an even more critical task. Knowing your assets and liabilities allows you to monitor how much money is going toward bills and other expenditures.
Your assets are all the things you own, such as a home, car and stocks. On the other hand, liabilities refer to debt obligations like credit card debt, student loan payments or mortgages.
Your net worth can fluctuate over time as you pay off debt and increase earning potential. For instance, if you’re paying off a mortgage and increasing contributions to a retirement account, expect your net worth to increase over time as well.
As a general rule, the higher your net worth, the better off you’ll be financially in the long run. It is also wise to keep track of all assets so that you can maximize savings and investments as you age.