Finance⏱ 5 min read
How to Track and Calculate Net Worth Growth Over Time
Net worth is a snapshot; its growth rate tells you whether you are on track. Here is how to calculate growth rate, set milestones by age, and identify what is actually driving change.
Most people calculate net worth once, are surprised by the number, and then never look at it again. Tracking the growth rate over time — not just the absolute figure — is what reveals whether your financial life is actually improving.
Net Worth Growth Rate Formula
Annual net worth growth rate = ((NW_end - NW_start) / |NW_start|) x 100
Note: use absolute value of start (|NW_start|) to handle negative net worth.
Example: net worth went from £45,000 to £58,000 in one year:
Growth rate = (58,000 - 45,000) / 45,000 x 100 = 28.9%
Compound Annual Growth Rate (CAGR) over multiple years:
CAGR = ((NW_final / NW_initial)^(1/years) - 1) x 100
Net worth grew from £20,000 to £75,000 over 8 years:
CAGR = ((75,000 / 20,000)^(1/8) - 1) x 100
= (3.75^0.125 - 1) x 100
= (1.1800 - 1) x 100
= 18.0% per year
Net Worth Milestones by Age (UK Estimates)
AgeBottom 25%MedianTop 25%
25-34Under £5k£20-40k£80k+
35-44Under £20k£80-120k£250k+
45-54Under £50k£150-250k£450k+
55-64Under £80k£250-400k£700k+
65+Under £100k£300-500k£800k+
These are rough estimates based on ONS Wealth and Assets Survey data. UK median net worth is skewed heavily by property equity — renters at the same income have dramatically lower net worth than homeowners of the same age.
Decomposing Net Worth Growth
Net worth change has three drivers:
1. Active saving: cash you save from income
2. Investment returns: growth of existing assets
3. Liability reduction: debt being paid down
Net worth change = Savings + Returns + Debt reduction
Example: net worth grew £22,000 in a year:
New savings: £8,000 (ISA contributions, savings added)
Investment returns: £9,500 (portfolio grew 8% on £118,750)
Mortgage principal repaid: £4,500
Total: £22,000 ✓
Understanding the split matters:
If most growth is savings: good discipline, but limited by income
If most growth is returns: market-dependent, not guaranteed
If minimal debt reduction: check whether this is intentional
Building the Habit: Quarterly Net Worth Tracking
Quarterly tracking removes the noise of month-to-month volatility.
Simple spreadsheet columns:
Date | Assets | Liabilities | Net Worth | Change £ | Change %
Assets to include:
Cash and savings | ISAs | Pensions (current transfer value) | Property value | Investments | Other assets
Liabilities to include:
Mortgage | Personal loans | Credit card balances | Student loan
Property valuation:
Use Zoopla/Rightmove estimate, updated annually (not quarterly)
Pension: use annual statement or pension provider app figure
Do NOT update property or pension more often than annually
(Too volatile, creates false perception of volatility)