I started tracking my net worth 6 years ago
This simple exercise changed everything for me
On the 1st of every month, it takes 15 minutes to update the spreadsheet with my bank accounts, investments, real estate, business, and debt.
Here's an example of the layout (link to template at bottom)
If something looks off, I dig in until I find out why.
But the biggest impact is how I viewed investing in my own business.
Before this sheet, I gauged my success by my bank and brokerage account balances. I only looked at the cash
This meant I was mentally rewarded every time I took money out of the business to juice my personal accounts.
I didn’t realize how big a problem this was causing.
The business had plenty of cash to operate but it slowed my growth.
Yes you want a safety net of cash saved.
But once that’s covered, saving cash actually loses value due to inflation. Stocks only grow at 10% per year over the long term.
That same cash invested into a new location does three things:
1/Cash-on-cash return - I can usually generate a 100% return on that investment in the first 12 months.
Example: invest $100k into a new shop. I make back $100k in the first 12 months, returning all my capital PLUS I still own the shop
2/ Cash flow - each month the shop generates new cash flow
Example: it continues to add $15k to my business account every month.
3/ Spreadsheet equity - the shop becomes more valuable the more money it makes.
Example: that shop is now worth $600k.
Old Brian takes out $100k, puts it into Vanguard; 3 years later, it’s worth $133k
New Brian invests $100k into another shop; 3 years later, it’s worth $1M ($400k cash flow + $600k equity)
This strategy of recycling my money back into my business has made me millions.
It all started with a simple spreadsheet
You can get a copy of my template here