Episode Summary: How to Do a Net Worth Audit (And Why It’ll Motivate You)

Podcast: The Personal Finance Podcast
Host: Andrew Giancola
Date: December 10, 2025

Main Theme & Purpose

Andrew Giancola hosts a comprehensive episode focusing on the transformative power of performing regular net worth audits. He makes a compelling case that tracking and strategically adjusting your net worth—not just budgeting—is the essential driver of true wealth creation. Andrew provides listeners with detailed, actionable steps for conducting a net worth audit, highlights common mistakes, suggests tools for automation, and reveals the psychological effects that make this practice so motivating.

Key Discussion Points and Insights

1. Why Net Worth Is the True Scorecard

• Net Worth Defined: Your net worth equals your assets minus your liabilities. This number reveals your true financial status.
• Tracking Net Worth vs. Budgeting: Many people focus on creating budgets, but Andrew stresses that “you can budget for 20 years and never build wealth because you’re focusing on the wrong things” (03:17). Tracking net worth is direct, honest, and shows whether you are winning or losing the money game.

The Power of Regular Audits

• Frequency: Annually is good for most, but Andrew recommends monthly or quarterly audits for those working to dig out of negative net worth or accelerate wealth.
• Spotting Trends: Regular tracking lets you identify positive or negative financial trajectories, prompting timely action.
  • “You can begin to spot trends and make adjustments. 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…’” (05:41)

2. Five Motivational Factors of Net Worth Auditing

Andrew identifies five reasons net worth tracking is powerful:

• Clarity: It "forces clarity," making your financial progress concrete rather than abstract.
  • Quote: “There is no vague consideration or wondering, am I on track or am I making progress?” (06:13)
• Identifies Problems Instantly: Exposes growing debts, shrinking cash, or investments not growing as expected.
• Builds Motivation: Seeing improvement, even minor, boosts your resolve.
  • Memorable Moment: “When you see it grow, even by 200 bucks, 400 bucks, it is going to start to motivate you.” (10:09)
• Creates Accountability: You must face the real math—high income means little if net worth isn't rising.
• It’s a Habit of the Wealthy: “Every wealthy person I know… they are tracking their net worth religiously…” (12:21)

3. Step-by-Step: How to Conduct a Net Worth Audit

Step 1: List All Assets

• Examples: Cash (checking/saving/CDs), investments (401k, IRAs, taxable accounts, crypto), real estate (including guidance on valuing your home—Zillow, assessed, or purchase price for conservatism), vehicles, collectibles, precious metals, and, if any, cash value life insurance (though Andrew does "not recommend" cash value life insurance) (16:50–19:32).
• Caution: Don’t overinflate asset values. Use conservative estimates.

Step 2: List All Liabilities

• Examples: Mortgages, car loans, student loans, credit cards, HELOCs, personal loans, business/medical debt, "Buy Now Pay Later" balances.
  • “We want to include personal loans, things like Klarna Buy Now Pay Later…business loans, any other loans that you have, medical debt, those would all be part of your liabilities…” (21:30)

Step 3: Subtract Liabilities from Assets

• The result is your net worth.
• Automated tools can streamline this process:
  • Monarch Money
  • Personal Capital (now known as Empower)
  • "Some people like updating their net worth manually, and I don’t blame you… But I like Personal Capital and Monarch Money…” (19:53)

Step 4: Review, Compare, and Take Action

• Compare audit results over time—look for positive/negative trends and identify problems (rising debt, declining cash, big new expenses, etc.)
• Ask probing questions:
  • "Have you taken on more debt?"
  • "Are you draining your cash every month?"
  • "Are you overspending or do you need a higher income?"
    (24:45)

Step 5: Common Mistakes to Avoid

• Overvaluing jewelry (should be melt value only), counting rapidly depreciating assets (boats, clothes), including future inheritance or bonuses before receiving them.
  • “If you can’t sell it for material value, then it does not need to be counted…” (27:10)

Step 6: Set Clear, Measurable Goals

• Set targets for net worth increases, e.g., 10% per year or 1% per month/quarter.

Step 7: Example Walkthrough

• Andrew gives a sample calculation for “Avery,” showing line-by-line how to total assets and liabilities (26:45).

Memorable Quotes & Moments

• On Clarity:
  “Your net worth is the truth. It's your financial scorecard. It tells you are you winning the game or are you losing the game.” (03:41, Andrew)

• On Motivation:
  “I get motivated when I look at my network. Sometimes if it gets cut back…I get ticked off and I'm ready to go after it again.” (09:09, Andrew)

• On Wealth Building:
  “The difference between your income and your expenses is the gap. And in that gap is where wealth is built.” (35:55, Andrew)

• On Starting from Negative Net Worth:
  “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're here to make sure that we are doing.” (22:55, Andrew)

Recommended Tools for Tracking Net Worth

• Monarch Money: Automatically connects accounts, can sync Zillow values for home. Use Andrew’s code “pfp” for a discount.
• Personal Capital (Empower): Free tool Andrew has used for over a decade.
• Spreadsheet: Manual but keeps you closely engaged with your numbers.

Timestamps for Important Segments

| Timestamp | Segment/Topic | |------------|--------------------------------------------------| | 02:08–04:28 | Why net worth is the ultimate metric | | 04:28–08:20 | What is a net worth audit and why do it | | 08:22–11:32 | Problems a net worth audit reveals; motivation | | 11:32–13:22 | Accountability and habits of the wealthy | | 14:26–20:39 | Step-by-step: Listing assets | | 20:39–24:45 | Step-by-step: Listing liabilities | | 24:45–28:44 | Using audit results, red flags, common mistakes | | 26:45–28:44 | Example net worth audit (Avery) | | 32:45–35:53 | Psychological effects; why audits work | | 35:53–40:21 | Action steps to grow net worth fast | | 40:21–end | Recap, invitation to Master Money Academy |

High-Leverage Actions to Grow Net Worth

1. Increase your income:

   • Ask for raises, change jobs, start side hustles, do freelance/consulting, get certifications.
   • “Income is the fuel to the fire that is going to allow our net worth to grow…” (34:18)

2. Automate investing:

   • Automate contributions to IRAs, 401ks, HSAs, etc.—removes willpower from the equation.

3. Pay off high-interest debt:

   • Target debts over 6% interest for payoff, as this rapidly increases net worth.

4. Build a cash buffer:

   • Follow Andrew’s “136 method” to ensure emergency reserves.

5. Increase your savings rate:

   • The “1% rule”—raise your savings rate by 1% of income monthly until reaching (or exceeding) 20%.

6. Use windfalls wisely:

   • Apply the “50/50 rule”—split bonuses, raises, tax returns for enjoyment and wealth-building.

7. Protect your assets:

   • Have the proper insurance (life, disability, etc.) to prevent setbacks.

Takeaways & Final Thoughts

• Regular net worth audits give you clarity, highlight opportunities for improvement, and serve as strong motivation on your wealth journey.
• Use conservative asset valuations and avoid accounting for hypothetical future money.
• Use the audit findings to adjust your strategy: increase income, automate investments, pay off debts, and steadily improve your savings habit.
• “What gets measured gets improved." Simply by tracking net worth, you’ll naturally be more mindful and better with your money. (32:48)
• Andrew invites listeners looking for more in-depth help and community to join his Master Money Academy for courses, coaching, and support.

This episode provides a no-nonsense, step-by-step approach for anyone serious about extracting more value from their money, no matter where they’re starting. Andrew’s enthusiasm, practical tips, and transparently shared tools and methods make net worth auditing feel not just important, but achievable and even exciting.