Pod Insights The Personal Finance Podcast How to Do a Net Worth Audit (And Why It’ll Motivate You) About this episode Get Your Networth Audit Checklist here.
Join the community built to help you master your money, stay accountable, and reach financial freedom. 👉 Join Master Money Academy today!
In this episode of The Personal Finance Podcast, Andrew reveals why tracking your net worth is more powerful than budgeting and shows you exactly how to perform a net worth audit step-by-step. He breaks down what to include and exclude in your calculation, common mistakes people make, why tracking this one number automatically makes you better with money, and the seven high-leverage actions you can take over the next 12 months to grow your net worth faster than ever before.
Listen to The Business Show here.
Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here!
Partner Deals
Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance
Get 50% Off Monarch, the all-in-one financial tool at www.monarch.com/PFP
Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/
DELL: Get a new Dell AI PC starting at $749.99, at Dell.com/ai-pc.
Policy Genius: Go to policygenius.com to get your free life insurance quote.
Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at shopify.com/pfp
Wayfair: Shop outdoor furniture, grills, lawn games, and WAY more for WAY less
DeleteMe: Go to https://joindeleteme.com/PFP20/ and Use Promo Code PFP for 20% off!
Resources Mentioned
How to Automate Your Finances (Money on Autopilot!)
The 1-3-6 Method For Building & Managing Your Emergency Fund
5 Side-Hustles That Can Turn into a Full time Income!
5 Side-Hustles That Can Turn into a Full time Income! (Part 2)
5 Side Hustles That Can Turn into a Full Time Income! (Part 3)
Connect With Andrew on Social Media:
Instagram
TikTok
Twitter
Master Money Website
Master Money Youtube Channel
The Master Money Newsletter
Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Andrew Giancola? When I started the Personal Finance Podcast, I had no idea how big it could become. I just knew I had something I wanted to share, so I started putting it online. And looking back, I definitely wish I would have started a decade earlier. One of the horror parts about building something online, though, is making it look professional. A website used to mean hiring a developer, figuring out design, and potentially spending thousands of dollars. In fact, on my website, I spent tens of thousands of dollars. That's what impressed me when playing around with Hostinger's AI Website Builder. I told it what kind of website I wanted, and I built the first version in minutes. No coding, no designer, or developer needed. And Hostinger doesn't stop at launch.
0:44 Andrew Giancola? Their AI can help with SEO, website copy, email marketing, and more. Plus, your domain, website, email, and marketing can all live in one account, with plans starting at just $3 every single month. Hostinger builds your vision step by step. Create your website today. Go to hostinger.com/pfp and use code PFP for 10% off now. Now, if you watch this podcast on Spotify, Apple Podcasts, or YouTube, you've probably noticed the wood slat walls behind us. We wanted this podcast set to look professional, but also not be a project that was overly complicated. And I found these slat walls on Wayfair, and it completely changed this space. And it's now basically the background that you see in every single podcast
1:29 Andrew Giancola? or piece of content that we record. And that's one of the things that I love about Wayfair. You can shop thousands of products across different styles and budgets, use customer photos and reviews to see how things actually look in real homes, and find something that fits your space. They also have Wayfair Verified Products that are hand-vetted by product specialists using a 10-point quality inspection. And with more than 20 million verified 5-star reviews, you can feel a lot more confident about what you're ordering. I've used Wayfair for this studio and our home, and I absolutely recommend them for your space. So transform your space with pieces that hold up to real life. Join Wayfair Rewards today and get 5% back on every single purchase.
2:14 Andrew Giancola? Head to wayfair.com or shop the Wayfair app for all things home. That's W-A-Y-F-A-I-R.com. Wayfair: Every Style, Every Home.
2:28 Andrew Giancola? On this episode of the Personal Finance Podcast, how to do a net worth audit and why it'll change your life.
2:43 Andrew Giancola? What's up everybody and welcome to the Personal Finance Podcast. I'm your host Andrew, founder of MasterMoney.co. And today on the Personal Finance Podcast, we're going to talk about why you should do a net worth audit and why it'll change your life. If you guys have any questions, make sure you join that Master Money newsletter by going to MasterMoney.co/newsletter. And don't forget to follow us on Spotify, Apple Podcasts, YouTube, or whatever podcast player you love listening to this podcast on. And if you want to hop out the show, consider leaving a five star rating and review on Apple Podcasts, Spotify, or your favorite podcast player. Now today, we're going to be diving into how to do a net worth audit. And I'm going to teach you how to increase your net worth dramatically
3:27 Andrew Giancola? over the course of the next 12 months. See, most people think that they need a budget to turn their finances around, but that's not necessarily true. What they really need is to learn how to do a net worth audit and then develop a system and put this system into place that is going to help you increase your net worth over time. Because here's the crazy thing. You can budget for 20 years and never build wealth because you're focusing on the wrong things. If you're not looking at the scorecard, which is your net worth, this is what's going to make the dramatic changes in your financial life. And really wealthy people are the folks who are actually monitoring their net worth, not just their income, not just their savings rate, but really what direction is your net worth going in? And why is it so important? Because your net worth is the truth. It's your financial scorecard.
4:12 Andrew Giancola? It tells you, are you winning the game? Or are you losing the game? Now today, I'm going to show you exactly how to run net worth and how to audit it step by step so that you are not confused whatsoever. And then I'm going to show you the exact moves that you need to make over the course of the next year to make sure that this time next year, you have a net worth that is way higher than it currently is. We'll break down what a net worth audit is, why it is the single best metric for you to be tracking. We'll talk about exactly how to do. Do it step by step. So you don't have to worry. I'm going to give you some of the tools where you can track your net worth automatically. But in addition, if you want to do it on a spreadsheet, you can absolutely do that as well. I'm going to talk about the major mistakes people make when they're calculating their net worth. I'm going to talk about what to do with the results and the high leverage activities that you need to take action on
4:55 Andrew Giancola? so that you can increase your net worth. So this is an action packed episode. So if that's something you're into, let's get into it.
5:04 Andrew Giancola? So first, let's talk about a net worth audit. What actually is a net worth audit and why should you actually be considering doing this? So your net worth is your assets minus your liabilities and whatever that number comes out to be, that is where you stand and that is what your net worth is. Now, a net worth audit is just a structured way for you to look at your net worth in a very strategic manner. Meaning we are going to go through our network and actually strategize. How are we going to increase this thing? What a lot of people do is they track their net worth and they say, oh, that's nice. That number got a little bit higher this year. But instead, if you get real strategic about this number, you can build a tremendous amount of wealth just by being intentional. Intention is the name of the game when it comes to the big numbers. Now, you may have heard me talk about this in the past.
5:48 Andrew Giancola? Some of the biggest numbers that you need to be tracking out there are your savings rates, your net worth, how much income you have coming in, in addition to how much debt you have, and where your net worth stands. And so today, we're going to be diving deeper into this. We're going to list every asset. We're going to look at your debts. We're going to calculate the difference and we're going to start to do comparisons quarter after quarter, month after month. Now, for most people, they like to track their net worth once every single year and that is absolutely fantastic. But if you are in the phase where you are trying to get out of a negative net worth or you're trying to accelerate your path to wealth, then tracking your net worth a little more frequently could be beneficial as well. And one of the cool things that you can do is you can begin to spot trends and make adjustments.
6:32 Andrew Giancola? And so because we can spot these trends, we could say, hey, some of this stuff is not working for me and I want to make an adjustment or I want to spot this trend so I can make a move. It is the single biggest indicator of how well you are doing financially. It's not your income. It's not your expenses. It's not your budget. Is your net worth because if that number is ticking up and you're seeing your assets grow exponentially, that is going to have a dramatic impact on your long-term wealth building. And here's the big secret, people who track their net worth, they grow wealth faster. Why do they grow wealth faster? Because they are tracking the right things. They are not worried about the things that don't matter as much. They are instead tracking the right things that truly are going to make a big impact on their wealth. Now you may be saying to yourself, well, I'm not convinced yet. Why do I need to be tracking my net worth? Why is this so incredibly important?
7:17 Andrew Giancola? Well, I'm going to tell you exactly why this is so important and why it is the number one metric that you need to be tracking. Number one is it forces clarity. There is no vague considerations or wondering, am I on track or am I making progress with my money? No, your net worth is going to tell you exactly what is going on. You see the actual math of your true assets minus your liabilities. Let me give an example of how clear this can make it. Let's say, for example, you have a hundred thousand dollar net worth. You have a full hundred thousand dollar net worth and you decide to yourself, hey, I'm going to go out and buy myself a brand new car. I'm going to take on an eight hundred dollar car payment and I'm going to go buy a brand new car. And when I do this, I'm going to see what the impact is. And so you go out and buy a brand new car for forty thousand dollars. Guess what's going to happen?
8:01 Andrew Giancola? If you finance that entire car, if you finance forty thousand dollars, your net worth will drop forty percent down to sixty thousand dollars. And this shows the true impact of your decisions. Every single decision that you make is going to have an impact on your net worth, no matter how small or how big that decision is. Number two is your net worth is going to expose problems instantly. A lot of folks out there have issues when it comes to your finances. Maybe your debt is creeping up. And if your debt is creeping up over time, you may be seeing that number or your net worth increase shrink, or it's going backwards, meaning you're falling backwards and going negative, just like in our car example. Secondly, as you could see, cash thinning out. If you are spending a lot more cash than you need to be, or you're overspending in a specific category,
8:46 Andrew Giancola? you could see your cash start to thin out and it could cause problems within your finances. Number three is your investments are not moving. And if you have an investment portfolio put into place and you go back over the course of the last couple of And it's not growing as fast as it should be. That is going to give you a big indicator and your net worth is going to have a big indication. Also, one thing I want to note, and I'm going to talk about this a lot in this episode. Is one reason why your net worth could be going down is if the market is having a rough time. Let's say you're in a rough patch in the market and the market takes a dip. Well, that could have a big impact on your net worth. And if that stuff bothers you, then maybe tracking your net worth on a monthly basis or a more frequent basis is not best for you. The psychology behind your net worth is also a very important thing. And so for folks who actually get emotional when they see their net worth go down,
9:31 Andrew Giancola? it is worth it for you to track it less frequently because the less frequent you track it, the less the market is going to dictate what direction that net worth is going to be. But another thing that you would be able to figure out and expose these problems instantly is if big expenses are draining you. For a lot of folks out there, maybe you took on a mortgage that was too big for your britches. Or maybe you took on some sort of car payment that was way too big. If those expenses are draining you, it can allow you to make educated decisions with your finances that makes you move the needle in different directions. So doing a net worth audit becomes obvious when something is off. Now, number three is what your net worth does, and this is a big thing for me, boy. I love this part of your net worth is it builds up motivation. I get motivated when I look at my network.
10:16 Andrew Giancola? Sometimes if it gets cut back or goes backwards in any way, shape or form, I get ticked off and I'm ready to go after it again. I'm ready to grow that net worth to make sure it is going in the right direction. And you should feel the same way. Maybe you're thinking to yourself right now, man, I have a negative net worth. I am in debt. I have credit card debt or I have student loans and I don't really have many assets saved up at this point in time. This is something where I'm going to turn this entire situation around. And you know what I'm going to do? I'm going to pay off this debt. I'm going to start investing my money so my money can grow for me. I know that my dollars can work so much harder than I ever could. And this is a great reason to start tracking your net worth because it's going to help motivate you. When you see it grow even by 200 bucks, 400 bucks, it is going to start to motivate you.
10:59 Andrew Giancola? And once you start to see those big net worth chunks change, it is a huge, huge difference maker. Now, this is something we talk about when it comes to saving up your first 100K. Started to talk about saving your first 100K back in 2020 is when we did our first episode on talking about this. And when we started to talk about it, all of a sudden, we see other people starting to bring it up as well. Now, one big thing I want you to note is saving your first 100K is one of the most important milestones you can get to. Why? Because your net worth is going to grow dramatically after that timeframe. So for example, let's say you have $100,000 invested. Well, if you get a 10% rate of return on that $100,000 invested, guess what? Next year, you're going to have $110,000 within your net worth. But let's say you have a million dollars invested. Well, if you get a 10% rate of return every single year on that million dollars, guess what?
11:44 Andrew Giancola? You're making $100,000 increased to your net worth in your bottom line. That is the big power of making sure you get more money invested is you're going to see a big, big difference. And when you get to your first million, your first five million, your first 10 million. I want to see all of you become multimillionaires. And that's part of the goal of this podcast is we want to create a million millionaires. But once you get to that first million and you start to see it grow, it is amazing how much faster it can grow because of that. Now, number four, one big thing that that worth also does is beyond motivation, it creates accountability. You must be accountable to the number because that number is the real math of what's going on in your financial situation. You could be making tons of money. You could have a super high income, but you, if you don't have a high net worth, that money is just getting thrown out the window.
12:28 Andrew Giancola? You are literally draining all the hard work you are doing if your net worth is not growing. And so this is where we want to make sure that we are keeping ourselves accountable to the real numbers that actually matter. There's a lot of people in this world, there's a lot of people in this country who are making a lot of money. And guess what? There are most of them are not actually utilizing those dollars for the right things. And we want to make sure that we are doing that. Also, number five is every wealthy person I know, they do this religiously. They have their routine and they have their net worth audit routine where they are tracking this stuff. So they are going through this and they don't just track their budgets. They don't just track only their assets and not think about their liabilities and they're trying to get all their wins, but they're not thinking about the losses that they have. Instead, they are tracking their net worth religiously and making sure that they adjust accordingly.
13:14 Andrew Giancola? The goal is to win at wealth building, and this is the number that you want to make sure that you have in place. That is going to help you do that. Now, in this episode, I am going to give you a step-by-step checklist on exactly how to do a net worth audit. And I'm going to show you exactly how to do this net worth audit that every millionaire that I know and every really wealthy person that I know does. We're going to go through the net worth audit checklist. And I'm going to also give you a bunch of tools on how to set this up so you can do it automatically. Automating your finances is a big thing here at the Personal Finance Podcast and Master Money. And we want to make sure that you know exactly how to do this automatically and you know which tools to use when you set this up automatically. So really, really important to note that. And so we're going to get into that right after this break.
13:58 Andrew Giancola? If you want to finally master your money and build wealth with confidence, then you're going to love Master Money Academy. This is the membership that I created to give you a step-by-step roadmap to get your financial life completely organized and working for you. So inside Master Money Academy, you're going to get the full roadmap that takes you from zero to financial independence, plus video lessons, worksheets, calculators, deep dive trainings, in addition to weekly coaching calls with me. You're going to learn how to automate your money, invest long-term, negotiate your salary with no guesswork or overwhelm. And you'll get access to our private community of wealth builders where you can ask questions, get clarity, and surround yourself with other people who are building wealth. One of my favorite parts about Master Money Academy is we have these things called Master
14:40 Andrew Giancola? Money Masterminds, where it's people who get together who are working on a common goal and they help support each other and they help learn from each other. So if you've been wanting a simple system, a clear plan, and support from a community that actually cares, join us inside Master Money Academy. Click the link below to get started at Master Money Academy and I can't wait to meet you inside.
15:03 Andrew Giancola? All right. So step one to setting up your net worth audit is to list all of your assets. And so listing all your assets is first, starting out with things like cash. So cash could be things in your checking account, money that you have in your high-yield savings account, money that you have in CDs, any cash on hand that you have set aside. This is going to be a place where you're going to list out that cash. In addition, we're going to list out investments. So your 401K, your IRA, your HSA.
15:28 Andrew Giancola? Your taxable brokerage account, your Roth IRA, bonds, index funds, cryptocurrencies, no matter what you have, when it comes to investments, you want to make sure that you list all of those out and you want to add it up. I don't care if you have $500 at some random brokerage somewhere, or you have 200 bucks somewhere that your grandpa gave you a long time ago. You want to make sure that you list all of those different cash items, so that you can have an accurate depiction of where your net worth stands. Then we want to think about real estate. So let's talk about real estate for a second, because if you have rental properties, obviously, we're going to add those in. And if you have land, you can add that in as well. But one big thing I want to talk about is your personal residence. Now, your personal residence is a fantastic asset, and most Americans out there hold a
16:08 Andrew Giancola? big portion of their net worth in their house. If a big portion of your net worth is in your house, but a very small portion is in assets, things like rental properties, or index funds, or all these other things, then we want to make sure that we flip that equation. I am never comfortable when too much of my net worth is all equity in my house. And now, a lot of you may have bought homes over the course of the last decade, and if you have, you probably have some great appreciation in there, and it could be a big chunk of your net worth. You might have a lice little net worth, but a lot of it is in your home's value. And so, we want to make sure that we flip the script on this, and ensure that we have more assets building up over time, because those are what are going to help us retire. Now, your home is absolutely an asset. I'm not going to argue against that, but it is something where you don't want the
16:52 Andrew Giancola? majority of your net worth to be in your home. And it's something, if you're just starting out, you know, it may happen. It may happen where you had some good appreciation, you maybe had a little bit of luck in the market, and so, your home has appreciated a lot, and so, you have your, a big portion of your net worth in your home. But let's focus on trying to get our assets up over time. Now, how do you value your home? Do you look at the zestimate? You can do that. And that's something where, like, if you use a tool like Monarch Money, for example, they actually allow you to hook up Zillow in Monarch Money to your net worth statement, so that you can get an accurate depiction, and it's going to move and fluctuate based on whatever the Zillow zestimate is. Now, obviously, Zillow's not that accurate, and if you want a real accurate depiction of what your home value should be, there's a couple of things that you
17:33 Andrew Giancola? can do. You can slowly move it up, based on the price that you paid. So if there's been a lot of appreciation, being conservative over time is really important. Number two is you're going to look at the assessed value. So the tax appraiser or the property appraisers are going to be much slower to move up the home value than would be a Zestimate, for example. So they are going to be slower to move up the exact value of your home because they are typically trying to be as conservative as possible. And so you can use that value. If you don't know how to find that number, you can just go to your property appraisers website. And if it's county, it could be city, it depends on where you live, but find your property appraisers website, mine specifically where I am in Florida is in county. And then you can go look up your home's assessed value and see where they have that number. That's a very conservative number.
18:16 Andrew Giancola? That can help you not overinflate based on the home because if you overinflate your home and then the market pulls back, which homes don't go up forever, news flash. And so if the market does pull back, that's going to allow you to ensure that you're just not over inflating your net worth and then you have to have a negative year. Because the market pulled your home back so far. So that's how I would think about your home. Now, if you want to be extra extremely conservative, you can just utilize the number that you bought the home for. That'd be another place that is really conservative, but you can absolutely do that. Again, Monarch Money uses Zillow and his estimate and they link that up that way. You can do that if you want to. Nothing wrong with that whatsoever. Just be, just note that, you know, if the market does pull back, the housing market, then you would just have to
18:57 Andrew Giancola? kind of adjust your net worth accordingly. So that's another thing that I want you to think about as we go through this. So it is very important to also think through some of your other assets. So you can think of things like cars. If you have precious metal, if you own gold or silver, if you own collectibles, maybe you own some expensive sports cards or Pokemon cards. I just read an article, by the way, that Pokemon cards are outpacing the S and P 500. It's a crazy metric, but there are some valuable things out there. Like sports cards, like Pokemon cards. I've seen Michael Jordan cards going for over a hundred grand as of late. I've seen Tom Brady rookie cards going for over a hundred grand as of late. So a lot of crazy things that are there. There can also be cash value. If you have life insurance, don't like cash value life insurance whatsoever.
19:39 Andrew Giancola? So if that is something that you do have, I do not recommend it, but that is something that you could have within your net worth numbers. And I want you to use conservative numbers when you do this. I don't want you to try to overinflate your net worth. No, we want to make sure that we are conservative with this. Because if there is some adjustments, we want to make sure that it does not impact our net worth too much and cause us to fall back. Now, one thing I want to say is that if you use some of these automated tools that we'll talk about, Monarch Money is a great one. Another one that we'll link up down below is Personal Capital. That is a free net worth tool that you can use that helps you track your net worth over time. That's a great one. I've been using for over a decade. Personal Capital is one that is also fantastic. So you can use either one of those tools. Monarch Money is just included in your budgeting subscription.
20:22 Andrew Giancola? If you use code PFP, you get 50% off of Monarch Money over the course of the next year for 12 months. So it's a really, really good deal and a lot of people will use that link. A lot of people in Master Money Academy, for example, have used that link for Monarch Money and when they do that, they're just shocked at how cheap Monarch Money is when you get the 50% off code. So use code PFP. At the time of recording this, that is good for 50% off your membership at Monarch Money if you want to utilize a automated tool. Now, the automated tools are great for a number of reasons, one of which is you don't have to keep going back into a spreadsheet over and over again, but you can use a spreadsheet too if you want to. Nothing wrong with that whatsoever. Some people like updating your net worth manually and I don't blame you because I think it is something that you could
21:04 Andrew Giancola? stay more on top of it if you do update it manually, but I like Personal Capital, Monarch Money and/or you can utilize a spreadsheet. Now let's talk about liabilities.
21:15 Andrew Giancola? So next we are going to list our liabilities and the most common liability for most people is their mortgage balance. That's going to be the big, big difference between how much liabilities that you have on hand. So your home is going to have a specific value and you're going to subtract the liability, which is your mortgage balance from that home. So let's say, for example, you bought a home for $400,000 in 2020 and it has gone up being worth $800,000 over the course of the last five years. But you still have a $300,000 mortgage on that home. That means you're going to have $500,000 with the equity that is going to go towards your net worth. But you're going to have to subtract out that mortgage. That's one of your liabilities. In addition, we have car loans. Car loans are going to be another liability that
21:58 Andrew Giancola? A lot of people are going to have and that's going to pull your net worth back. Another big one, especially for millennials, Gen Z is going to be student loans where student loans are prevalent and they are heavy hitters for a lot of folks right now. It is one area where a lot of people are struggling and so it's going to be big in 2026 to make sure that we have a plan put together with all the new rules surrounding student loans to get those paid off, but that's another thing we want to have on there. Credit card balances, this is one where this is going to be high interest debt. We want you to pay this off as fast as you possibly can. That is going to be a great area to help increase your net worth is getting credit card balances paid off. We also want to include personal loans, things like Klarna, buy now, pay later, all those different things and that number is growing. We want to make sure that we get that done.
22:40 Andrew Giancola? Helox, business loans, any other loans that you have, medical debt, those would all be part of your liabilities. Anything that you are borrowing money, that is part of your liabilities and this is where a lot of people are having issues. Now, then what we're going to do is we're going to take your assets minus your liabilities and a lot of the automated tools will do all of this for you. They'll ask you about your liabilities, what loans you have. You can even connect your loans to these automated tools and they are going to allow you to, hey, your net worth is going to go up or down based on you paying down that debt. And then we are going to figure out where our net worth stands. Now, for some of you, it could be positive and you may have a really strong net worth. We have people who listen to this podcast with tens of millions of dollars in net worth. We have people who listen to this podcast with hundreds of thousands of dollars in net worth.
23:23 Andrew Giancola? We also have people who listen to this podcast who are just getting started and their net worth is break even. And then you have another thing that could happen, which is your net worth could be negative. And if you do have a negative net worth, never fear because your boy is going to show you how to get out and increase your net worth over time dramatically. And that's what we want to make sure that we are doing. But if you do have a negative net worth, don't worry. A lot of people start there and they still build a tremendous amount of wealth. And so I want you to focus your time and energy on figuring out why that net worth is negative and then we're going to work on a plan to get you out of that situation. And so as you're setting up your goals over the course of the next year, I want you to make sure that you have a goal in here and figuring out how long it's going to take you to get away from that negative net worth and go into the positive. And it is one of the best feelings that you can ever have is
24:08 Andrew Giancola? Working towards that positive net worth. And so your assets minus your liabilities is gonna give you the number that is your net worth. So that we know where we stand. Now here's where the magic happens is for those of you who are really tracking your net worth. If you have a negative net worth or you're just getting started, there are areas that I want you to track it more frequently. And specifically, I want you to track it month to month or even quarter to quarter, especially as you get started. And you're trying to get out of having a negative net worth. And so here's where the magic happens. And here's where the auditing is going to happen even more frequently. If your net worth goes up, you're building wealth. If your net worth stays flat, you are obviously not really going in any direction. And we need to either focus on paying off more debt and/or we need to start to buy more investments. And if it goes down, that means you're taking on more debt, you're spending too much.
24:53 Andrew Giancola? And/or your income just isn't high enough for your expenses and we need to focus on growing our income. So this is going to give us a bunch of different indicators on what we need to do next. And this is why in Master Money Academy, we built the wealth builder's journey in a very specific way to ensure that you go through the proper steps in the proper order to make sure that you make that net worth number go up. Because net worth is so important that we want to make sure we see that trend line go up over that timeframe. And so whatever happens to your net worth is going to give a big indicator of what you need to do next. And that wealth builder's journey is going to guide you through that process. And so here's what I want you to do is as you start to do your net worth audit, we're going to look for the red flags. We're going to start to wave those red flags and make sure that we are getting after it when we see the red flag.
25:38 Andrew Giancola? So I want you to ask yourself a number of different questions. One, is your debt rising? Have you taken on more debt? Maybe you're taking on more personal loans just to get by. Maybe you just bought a brand new car. Maybe you just bought a house and so you have this mortgage debt on hand. And so you're going to see a difference in your net worth every time you buy a house. Maybe you are draining your cash every single month because you have a job loss or a different situation came up. And so you're having to deplete your emergency fund sum. Nothing wrong with any of these situations. We just need to know how it impacts our net worth and what's going on there. Maybe you're overspending. Maybe you need to automate your money. Maybe you need a higher income. All of these are going to be indicators and questions that we need to ask ourselves as we do these net worth audits. Again, I told you, your net worth is going to make you get real with yourself.
26:21 Andrew Giancola? And some of these questions here are going to give you the priority and the order of operations that you need to think about this. So again, make sure you download the checklist down below. It's going to have some of these questions for you that you need to be asking yourself as you start to do this net worth audit. Now, I want to talk about a couple of mistakes that people make when they run the numbers on their net worth, because these are something that I really should not, don't think you should be counting as assets, okay? So some of the things are going to be things like jewelry beyond the melt value. So you want to look at jewelry as if I melted this down, what would it be worth? A lot of people overvalue their jewelry because it's sentimental, or they think it's beautiful, or all these other things. But what is it actually worth if you melted it down? That's the value that I want you to put for jewelry if you're putting it on your net worth statement. Again, some other people like to classify depreciating assets that are really falling
27:06 Andrew Giancola? quickly, things like boats or RVs, things like clothes, things like future inheritance. All of these are great, but I don't like putting them on my net worth statement because they go down in value over time and your future inheritance is not guaranteed. And so these are just different areas that I don't want you to think about. Also, future bonuses should not go on your net worth statement until it hits your bank account. So the inheritance and the bonus need to hit your bank account first before you count some of those things. If you can't sell it for material value, then it does not need to be counted in that net worth statement. And so what I want to do here is I want to do an example of a net worth audit. We're going to just give an example of someone out there who has, is looking at their net worth and they're trying to figure out exactly where they stand. So let's take a look at someone here. We're going to call them Avery.
27:51 Andrew Giancola? And Avery has assets in their checking, so they have $2,000 in their checking account. They have $6,000 in their savings account. Their Roth IRA has $35,000. Their 401K has $60,000. Their home's value is at $350,000 and their car value is at $10,000. So their total assets, if you added all those things up, are $475,000. Now Avery has a mortgage of $250,000 on her house. She's got a car loan of $7,000 and student loans of $11,000 and a credit card of 1,500 bucks. So the total liabilities is going to be $269,000. And so Her total net worth is going to be $205,500.
28:33 Andrew Giancola? And next month, if she looks at it again and she's really trying to structure this, maybe it's going to be $206,900 because she started to pay down some of that debt. And so you can see a big difference there of how powerful tracking can be and how you can check and see the differences. Because if you set up a goal and say to yourself, well, I want my net worth to go up 10% this year. I want to see a 10% difference and I'm going to pay down some debt. I'm going to make sure I have my, some money invested and I'm going to make sure I'm tracking this very, very specifically. You could actually achieve that goal. Maybe it's 1% a month. Maybe it's 1% a quarter. It doesn't matter what it is, but having that progress is really, really important. Now next, I want to talk about why it's so important to do these net worth audits. And most people don't do them the right way and we're going to talk about why.
29:20 Andrew Giancola? It's kind of amazing how much can change in just a single year. Every summer, the kids are a little bigger, a little more independent, and life looks a little different than it did the year before. And it reminds me that while we can't predict the future, we can prepare for it. That's one of the reasons I like PolicyGenius. See, PolicyGenius isn't an insurance company. They're an online marketplace that lets you compare life insurance quotes from some of America's top insurers, side by side, for free. And their licensed team helps you compare coverage, prices, and terms, answers your questions, and even handles the paperwork so you can get the right policy without the hassle. For me, having life insurance isn't about expecting something to happen.
30:02 Andrew Giancola? It's about knowing my family is protected so I can actually enjoy these moments together instead of worrying about what comes next. And with PolicyGenius, you can find 20-year life insurance policies, starting at just $276 a year for $1 million of coverage. Head to PolicyGenius.com to compare life insurance quotes from top companies and see how much you can save. That's PolicyGenius.com. If you've been listening to this show for a while, you know it's not just me anymore. It takes a great team behind the scenes to make everything happen. And if I had to hire someone tomorrow, I'd want someone who could Jump right in and make an impact. That's why I'd use Indeed Sponsored Jobs.
30:43 Andrew Giancola? When workplace chaos hits, Indeed Sponsored Jobs helps you reach qualified candidates faster. Your job gets boosted in search results, so you're spending less time searching and more time interviewing the right people. Plus, you only pay for results, which I absolutely love. Sponsored jobs posted directly on Indeed are 95% more likely to report a hire than non-sponsored posts. That's a huge advantage when you're trying to grow your business. Spend less time searching and more time actually interviewing candidates who check all of your boxes. Less stress, less time, more results. When you need the right person to cut through the chaos, this is the job for Indeed Sponsored Jobs.
31:23 Andrew Giancola? And listeners of this show will get a $75 sponsored job credit to help get your job the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed Sponsored Jobs. If you've heard any recent episode of Health Corner, you know that I have spent the last few years trying to optimize my sleep. I've tried sleep trackers, cooling my room, changing my nighttime routine, all the different things, but nothing really matters as much as having the right mattress. And that's one of the reasons I love Leesa.
32:07 Andrew Giancola? A great mattress is one of those things that you use every single night and you spend a third of your life sleeping, and it can make a huge difference on how you feel the next day. Leesa has mattresses designed for different sleep positions and comfort preferences. And their sleep quiz can help you get matched in less than two minutes. Plus, they're designed and they're assembled in the USA, and they come with free shipping, easy returns, and a 120-night free sleep trial. So go to leesa.com for up to 30% off mattress plus and get an extra $50 off with promo code PFP. Exclusive for my listeners. That's L-E-E-S-A dot com.
32:48 Andrew Giancola? Promo code PFP for 30% off mattresses plus an extra $50 off. Let them know we sent you in the survey after checkout. Leaseit.com promo code PFP. One thing I've learned from running multiple businesses is there's usually a gap between how you think work is getting done and how it's actually getting done. And we've had times where we thought we knew the bottleneck, only to realize later, the real issue was somewhere completely different. That's exactly what today's sponsor, Scribe, helps solve. Scribe is a workflow AI platform trusted by 94% of the Fortune 500. And Scribe Optimize turns real workflow data into decisions your AI strategy actually
33:30 Andrew Giancola? needs, automatically capturing how work happens across approved apps, surfacing inefficiency and opportunities with no interviews and no manual discovery and no extra work from your team, which is the key. And the live dashboard shows where work is happening, how much time it's taking and where the biggest opportunities are right now. It automatically discovers workflows across multiple tools, then highlights your biggest inefficiencies and gives AI-powered recommendations with estimated time-saving. You know, I love saving time. It's also built with privacy in mind. It only runs across approved business applications, user-level data is anonymous by default, and sensitive information is automatically redacted and never leaves your firewall.
34:12 Andrew Giancola? To see, optimize in action, head describe.how/pfp and mention PFP for a 30-day risk-free trial. That's S C R I B E dot H O W slash P F P. There are two psychological reasons why your net worth makes you better with money automatically. And number one is because what gets measured gets improved. I want you to make improvement year in and year out on your net worth. And when you track your net worth, you naturally are going to spend a little less, you're going to invest more because you are tracking this, you're going to pay off debt faster, and you're going to make smarter decisions. And this is the area that I think a lot of people just do not track enough of their metrics, but once you start tracking, you're going to see a massive, massive difference overall in your financial picture.
34:58 Andrew Giancola? Because you started to track your money. Also, it makes wealth feel real, not abstract, not some random number. Where there's a lot of people out there who are a little more wealthy than they think they are. Because they don't track these numbers, they don't know that. Or there's other people out there who are way less wealthy than they think they are because they don't track these numbers. They don't know that. And so when you are someone who is spendy, maybe you have the Mercedes. Maybe you have all the designer clothes, but you don't have the assets on hand. Your net worth is going to be a lot lower than you actually think it is. Whereas someone who has a lot of assets, but they live frugally. May feel like they're not as rich as they actually are, but they really do have a much higher net worth. Than they once attributed to themselves. And so this is something that I think most people need to understand. Is that this is going to make a big difference overall.
35:43 Andrew Giancola? Now let's dig even deeper here because I want to talk about how to grow your net worth fast. Over the next 12 months and some of the things that you need to be doing. In order to make sure that you can accelerate your path to getting a higher net worth. Now for those of you out there who do not think about this stuff. And do not have goals associated with your net worth, I highly encourage you. To start setting up goals over the course of the next 12 weeks to grow your net worth. Now I like to set goals in 12 week increments and the reason for that is multi-fold. But this is something where we can set up the next 12 weeks to see exactly where our net worth is going to land. And we're going to start to track this and see where our progress is going. Number one, one of the fastest ways to increase your net worth is to increase your income.
36:24 Andrew Giancola? Why? Income is the fuel to the fire that is going to allow our net worth to grow. Because if we earn more income and if we increase our income and we take the increase. And we put it towards wealth building activities, our net worth is going to start to skyrocket. So if you think about a fire, for example, and your income is a small campfire. And then all of a sudden, you start to make a lot more money. And when you start to make a lot more money, your investments and your income are part of that fire. And you take that money and you put more of that money towards your investments. All of a sudden that fire is going to grow and it's going to grow even more and more and more over time. And the more money you throw, the more Kindle you throw into that fire. The larger that fire is going to get. And once that fire is large enough, you don't have to work anymore.
37:08 Andrew Giancola? And so your goal is to try to make that fire as big as you possibly can. Income is the catalyst. It is the gasoline that you can pour on financial independence. And for every single person out there who is listening to this podcast, who is interested in financial independence, I want you to take your income and pour it on that fire like gasoline. When you think about every single dollar that you're going to put towards that wealth building activity, this should be firing you up right now because this is exactly what is going to get you to exactly where you want to go. The difference between your income and your expenses is the gap. And in that gap is where wealth is built. And I want every single one of you to make sure that you are pursuing that gap, taking that gap and putting it towards wealth building activities. Now, ways to increase your income is one, after day job, learning to ask for a raise.
37:53 Andrew Giancola? We have a free ebook. Now, if you follow this ebook, I promise you, you're going to get an increase in your income. We have a free ebook. If you go to mastermoney.co/resources where you can download step by step exactly how to do this. Two is if you have no more income potential at your day job, changing jobs could help you earn more money. Three is to start a side business. Now, we have a bunch of episodes talking about side hustles that could turn into a full time business. Check out that series of episodes if you have not already. It is a very, very powerful series that can help you come up with ideas for side hustles. You could also do things like freelance or consulting in an industry that you know a lot about, and you can get certifications to increase your earning power over time.
38:37 Andrew Giancola? If you're a nurse and you become a nurse practitioner, you can make a lot more money. And so there's things like that that you could be doing to increase your earning potential. Number two is to automate your investing. Now, we just did an episode on how to automate your money. We will link it up down below in the show notes that you can check that episode out. But I want you to learn how to automate your investments. Why it removes willpower from the equation, meaning that you can get more money into your investments without having to worry. And this is a really powerful place to be because you can do Roth IRA contributions, 401k contributions, HSA contributions, taxable brokerage account contributions. This is the area where your wealth is going to grow the fastest. We're going to be building up wealth and buying more assets that are going to increase your net worth. Over time, this is going to make sure that you, your assets are growing in the area that we want them to grow.
39:22 Andrew Giancola? Not in the housing category, not in your personal residence category, but in the, all the other areas. Number three is you can pay off high interest debt. So if you have debt above a 6% interest rate, then we want to make sure that you pay off that high interest debt to increase your net worth over time. That is going to help you dramatically when it comes to getting out of a negative net worth and/or just making sure your net worth starts to tick up faster, and that's pouring fuel on the fire. Also, making sure, number four, that you have a cash buffer. Follow the 136 method. We have an entire episode on exactly how to save up for your cash buffer in your emergency fund so that you have that on hand. This is going to help you when anything in life comes up. Number five is to improve your savings rate by 1% every month. So we call this the 1% rule, but every single month, if you're starting with a low savings rate that's below 20%,
40:06 Andrew Giancola? we want you to make sure that you are increasing your savings rate by 1% of your income every month. This is going to have a dramatic impact on your long-term wealth building ability. And then, once you get to 20%, then you can make a decision, do I want to keep going? Or am I okay at this 20% number? Next is use raises and bonuses to help increase your net worth. Every time you get a raise, every time you get a tax return, every time you get a bonus, use the 50/50 rule. Spend 50% on things that you want to go out and do. Spend 50% on things that you value and take 50% and put it towards wealth building activities so that you can increase your net worth. This makes it a balanced way to enjoy life, but also use your money to fuel the fire, which is exactly what we want to do. And then, we want to also utilize this to protect our assets.
40:51 Andrew Giancola? So things like making sure we have the correct insurance on hand, making sure we have the correct life insurance, disability insurance, whatever else you need, those are going to help protect your income so that you don't have to worry later on down the line and your net worth goes backwards because you had to take on debt because you didn't have the right protections in place. Always, always, always have the right insurances in place. What should you do with your net worth over this timeframe? Now, there's a couple of things that will happen to your net worth as you start to track this. One, it could go up, and if it goes up, you're trending in the right direction. That means you're winning. Two is it could be flat and you're maintaining, but you're not building wealth. And so you have to make some tweaks or adjustments in order to ensure that you're building wealth. And three, what could happen is it could go backwards and you need to make some real adjustments. If it does go backwards, this is not to make you freak out whatsoever. Your job is not to freak out.
41:36 Andrew Giancola? Your job is to adjust and so don't get emotional about this. Instead, let's start to make adjustments so that we can get our net worth going in the right direction. So I want you to download the free checklist again, so you can do your very own net worth audit. Make sure you're utilizing personal capital, monarch money and/or a spreadsheet if you want to, in order to make sure that you can track your net worth over that timeframe.
42:01 Andrew Giancola? And so now you know how to do a net worth audit and this is going to completely transform your finances over the course of the long run. And if you want to build wealth, you need clarity. This is going to give you clarity with your money. You're going to understand where your assets are. You're going to understand where your liabilities are. You're going to understand why you want to actually get out of debt and why you want to make sure that you are paying off those liabilities. You also want to make sure that you are automating your money. The more that you automate your money, the higher you're going to see your net worth go up over time as long as you are making progress on those debts and increasing those assets in your timeframe. And so this is something where I would love to invite all, each and every single one of you. If you want to increase your net worth, I would love for you to join Master Money Academy. That is the place in the community where we have a group of wealth builders who help people every single day.
42:45 Andrew Giancola? So we do weekly calls with me where I answer all your questions. That is where we have the Wealth Builders Journey, which is our 25-step system that tells you exactly what to do next with your money. In addition, we have all our courses, everything else in there. We have a book club. We have small master money, masterminds where there are small groups of people who are working on common goals like investing or travel hacking. All these different areas that you can use to progress on your financial journey. Again, I would love to invite you to join us in Master Money Academy where you're going to get real help from me and my team. And we'll be able to help you throughout your financial journey. Things to do is to get to spend time with community members inside Master Money Academy. Again, if you made it this far, I invite you to join us in Master Money Academy.
43:25 Andrew Giancola? Again, thank you so much for being here. Our goal is to bring you as much value as possible in every single episode. If you got value out of this episode, share it with a family member, share it with a friend. It would mean the world to me and leave a five star rating review or a thumbs up on YouTube. If you got a lot of value out of this, thank you again so much for being here. I truly appreciate it and I will see you on the next episode.
43:47 Speaker 01 When you shop Kroger delivery, you can expect the savings you love and fresh groceries delivered right to your door. From delicious produce to everyday essentials, enjoy the convenience of delivery and the trusted selection you've come to know from Kroger. Because bringing you fresh, quality groceries is what we do best. Right now, enjoy free delivery on orders of $50 or more with your digital coupon. Restrictions apply. See site for details. Kroger, fresh for everyone.
Previous How Millions Retire With Nothing in Savings Next He Achieved Financial Independence in 2 Years! (Here's How!) With Justin David Carl Page updated October 31, 2026 · transcript and summary are machine-generated