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Tracking your net worth can show your progress towards financial independence from "summary" of Playing with FIRE (Financial Independence Retire Early) by Scott Rieckens
By tracking your net worth, you can gain a clear understanding of where you stand financially. This simple act of calculating your assets and liabilities can provide valuable insights into your overall financial health. Net worth is essentially a snapshot of your current financial situation, revealing how much you own versus how much you owe. It serves as a measuring stick for your progress towards achieving financial independence. As you track your net worth over time, you can see whether you are moving in the right direction. By consistently monitoring your assets and liabilities, you can identify trends and make informed decisions about your financial goals. Seeing your net worth increase can be a source of motivation and encouragement on your journey towards financial independence. Moreover, tracking your net worth allows you to set specific targets and track your progress towards achieving them. Whether your goal is to save a certain amount for retirement or pay off a significant debt, monitoring your net worth can help you stay focused and accountable. It provides a tangible way to measure how close you are to reaching financial milestones. In addition, tracking your net worth can help you identify areas for improvement and make necessary adjustments to your financial strategy. If you notice that your net worth is not growing as quickly as you would like, you can take steps to increase your income, reduce your expenses, or invest more effectively. Regularly monitoring your net worth can help you stay proactive in managing your finances and working towards financial independence.- Tracking your net worth is a powerful tool for assessing your financial progress and working towards your goals. It provides a clear picture of where you stand financially and can guide your decision-making process. By monitoring your net worth regularly, you can stay on track towards achieving financial independence and securing your financial future.
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