Part of the fun of personal finance (yes, it can be fun!) for me is to see progress.  Progress in the right direction, that is.  If you have a financial goal in mind, it is incredibly empowering to track your numbers and watch as you get closer and closer to your goal.

I have tracked my progress as I paid down my student loans down to zero.  To finally cross that expense item off of my spending plan forever was a great relief.  I used the same approach with my car note.  Finally, the only thing left is my mortgage.  It’s a big one, but I’m planning on crossing that off my list sooner rather than later.

A relatively new calculation I’ve included is my net worth. What would happen if you were to liquidate all of your assets and pay off all of your liabilities? Would you owe money? Or would you still have money left over?


Thankfully, it’s a pretty simple equation.  Here’s what I include in my personal net worth calculation:


  • Savings accounts: If you use more than one bank, make sure you include every banking institution that you’re currently using. You may have several types of savings accounts, such as a money market account and/or a CD.
  • Brokerage (taxable) accounts
  • IRA accounts
  • Work retirement accounts: Don’t forget your previous work retirement accounts if you’ve worked at more than one place.
  • Kids’ 529 plans
  • Home value: You can use either your current home value (according to Zillow or Trulia), or the original purchase price.  Your choice, depending on what you feel like is the true value of your home.

Here are other items that you can include in your assets column that I have not included in mine:

  • Car value: I feel like cars are such a depreciating asset that I simply didn’t include it. You can certainly include this in your calculation if you want.  Just go to Kelley Blue Book to get a rough estimate of the value of your car.
  • Value of Household items: Honestly, I’m too lazy to list all the things in my house.  I’ll just be glad to get rid of most of it eventually.
  • Life Insurance Cash Value: If you have a whole life policy with cash value, you should include that amount.
  • Other property: You may have rental property or a second home.  In that case, go ahead and add these in.


  • Mortgage principal

Note: With your liabilities, also write down your starting principal and current interest rate.  Even if you’re far away from zero, you can see how far you’ve come since taking out your loan.

Here are other items that you should include in your liabilities column if they pertain to you:

  • Student loans
  • Car notes
  • Credit card debt
  • Personal loans

Note: If you’re on a forgiveness program, this can be tricky.  You could just include the debt and watch it drag down your net worth over time. Or you could take into account the projected amount that you will be paying, as well as the tax that you will need to pay on the forgiven amount if you are not on PSLF.


First, knowing your net worth will force you to go through every single account under your name and put a number to it.  It will make you organize your finances in a way that you may have never organized them before.  Do not lose this master list of your accounts.  

It can be sobering to see what you’re worth on paper.  The number may be scary, or it may come as a pleasant surprise.  Either way, take action. Just because you don’t like your number doesn’t mean it’s going to get better on its own.  A better than expected number means you need to make sure you keep it that way.

If you have a plan to pay off your debts and increase your assets by saving/investing, then you should see your net worth increase over time.  For many of us, we started our career deep in the red, with our net worth well below 0.  It’s a huge deal to get to zero net worth, and if you’re still in minus territory, make sure you take the time to celebrate when you eventually hit this milestone.  Once you get past zero, go ahead and celebrate when you hit your first $100,000 in net worth.  Think big and aim for $1 million as your next goal.

Also remember that net worth is very fluid.  It is a snapshot of your current financial situation.  It can fluctuate greatly due to forces outside your control, such as the stock market or real estate prices.  So don’t expect that your net worth will always go up without any downs.  It can be a bit of a roller coaster ride, and your job is to make sure that you’re heading in a general upward trajectory by saving, paying down debt, and diversifying your investments.  


If you haven’t read “The Millionaire Next Door” by Thomas Stanley and William Danko, I highly recommend it.  It’s an eye-opening look at the typical American millionaire (by the way, $1,000,000 in 1996, when this book was published, is actually worth $1.6 million in today’s dollars. Thank you, inflation).

Anyway, in the book, he has an interesting way of calculating what your net worth should be, depending on your age. This number will tell you whether you’re a Prodigious Accumulator of Wealth (PAW), Under Accumulator of Wealth (UAW) or an Average Accumulator of Wealth (AAW). They define a PAW as someone who has twice their expected net worth.  Conversely, a UAW is someone who has half their expected net worth, and an AAW is somewhere in the middle. Here is his formula:

(Your age x Annual (pretax) Household Income)/10

So if you are 35 years old and your household income is $150,000, then your expected net worth should be:

(35 x 150,000)= $5,250,000

$5,250,000/10= $525,000


Dr. Jim Dahle from the White Coat Investor came up with a formula for physicians.  (By the way, if you want to learn a lot about personal finance, his website has an incredible amount of information.  I’ve learned a lot from him- thank you Dr. Dahle!).  He took into account the fact that physicians start their career much later than the average person, and they also typically start out in quite a bit of debt.  Sound familiar?

Here is his formula from his book:

Expected Physician Net Worth

(Salary x Years in Practice x 0.3)- $200,000

According to this calculation, the expected net worth for the same individual would be $205,000, less than half the original calculation.

To see if this formula is true to life for the veterinary profession, we would need to see a survey that focuses on veterinarians and their actual net worth.  I have yet to see such a survey; if you know of one, please send it my way!

We started our married life with six figure negative net worth, living in a very expensive city with no particular financial goals. We budgeted without actually budgeting for much of our marriage.  As the kids came along, we became much more intentional with our spending and savings goals.  Now, over 10 years later, our net worth is currently sitting at the upper end of AAW.  We don’t have plans to pursue PAW just for the sake of being a PAW.  What’s more important is that we’re meeting our financial goals, and calculating our personal net worth is a great way to track whether or not we are meeting those goals.  


So are you a PAW, UAW, or AAW? If you’re UAW, but you’re still reaching for your financial goals, then you don’t have to be as concerned as someone who is a UAW and has no idea what their financial goals are.  If you’re a PAW, then you still need to make sure you’re on track with whatever goal you’re looking to accomplish so that you don’t trend back towards UAW territory.

I encourage you to start tracking your net worth if you haven’t done so already.  If you want to have some extra fun, go ahead and calculate your expected net worth as well. I wouldn’t be surprised if you decide to start tracking on a regular basis!

Have you done your calculation? Have you calculated your net worth differently? Are you a PAW, UAW, or AAW? Comment below!


  1. xrayvsn on July 3, 2018 at 9:06 am

    I found Dahle’s formula a lot better to use than the Millionaire Next Door one which assume earning early on and a relatively stable income growth. It doesn’t account for the delay in medical training as well as the stratospheric jump in income when one finally becomes an attending. It also doesn’t really make too much concession for the massive debt that these individuals face.

    My financial setbacks from divorce etc kind of knocked me off course a bit, but if I continue at the rate I am growing now, I certainly will be a PAW before I turn 50.

    • Financial Wellness DVM on July 3, 2018 at 9:56 pm

      Nice job with your journey to PAW! Being in PAW territory would be awesome just for that peace of mind, especially considering retirement and all of the unknown expenses associated with getting older. All kinds of things that I really had no interest in when I was a new graduate….adulting puts a lot of things in perspective!

  2. minimalmd on July 14, 2018 at 9:04 pm

    Thanks for posting on this topic. Knowing where you are in terms of net worth can be a huge motivator. It amazes me how many individuals and couples don’t even have conversations about these topics.

    The calculations about expected net worth are sometimes hard to apply. What you need for FIRE has so much to do with you expenses, even more so than your income.

    • Financial Wellness DVM on July 15, 2018 at 8:43 am

      It took me way too many years to even consider calculating my net worth…I think it all has to do with whether or not there is a particular financial goal you want to achieve. Too many people don’t want to deal with their finances, which coincides with not having any particular financial goals. Being goal driven is key- the issue is getting there and finding that motivation. Numbers can definitely be motivating!

  3. The Vetducator on July 1, 2019 at 7:01 am

    Interestingly, both the WCI and Millionaire Next Door equations produce the same exact figure for me. Unfortunately, I am a bit behind it. Fortunately, we are saving ~80% of our income now so I hope to catch up quickly!

    • RLDVM on July 1, 2019 at 11:25 pm

      80% is fantastic!

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