Building wealth begins with knowing what you have today. That’s the starting point regardless of how much—or how little—you have in your bank account. Know the numbers and then track your net worth.

A monthly look at your financial reality—good or bad—drives your daily decisions around money.

You choose what to do with it. Will you live a lavish material life now or do you want to enjoy financial freedom in the future?

What does financial freedom look like to you?

For a former gas station attendant in Vermont, financial freedom resulted in extravagant giving.

Ronald Read became a millionaire by saving aggressively and investing wisely. Even after he had amassed a fortune, Read kept working and living a frugal life. After his death, people were shocked to learn that he bequeathed $6 million to charity, split between the community library and the hospital where he died.

You can follow Mr. Read's example by tracking your net worth each month. Here’s how:

Step 1: Calculate your net worth.

Tally up the balances of all your assets including savings, retirement accounts, real estate, and the value of your business. Be sure to count insurance policies, too.

Next, determine what you owe—everything from credit card debt to mortgage balances.

Now subtract what you owe from what you own. This is your net worth.

Step 2: Make growth a family business.

Building net worth is a lifestyle. Everybody in your family needs to understand what you're doing and why. Set an example of how you make financial decisions.

You and your spouse need to be on the same page about how aggressively you spend, save, and invest.

Step 3: Monitor your bottom line.

We recommend calculating and tracking your net worth with a spreadsheet so you can update it each month.

Talk over your progress with family members.

Step 4: Set your retirement goal.

What is a reasonable net worth target for you and your family?

We use the "Rule of 25" which sets your retirement target at 25 times your annual spending at retirement. If you need $100,000 each year of retirement, your target net worth is $2.5 million (25 times $100,000).

Invested, you can expect that number to grow by 4 percent each year – $100,000, which is your annual retirement income goal. You can comfortably live on the earnings.

At first, it can be scary to look at your financial situation. But facing the facts now gives you a chance to change your future.

You’ll find a group of others just like you and a free net worth spreadsheet template at networthclub.com.

It’s time to get started and monitor your net worth if you want to lead a big life.

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