My Net Worth Crossed Over the $1 Million Mark. Here's Why I Still Can't Spend a Lot

I have been tracking my net worth for years. This involves keeping an eye on the value of my assets, such as my home and the money in my bank account. After adding up the value of all that I own, I subtract my liabilities -- like my mortgage debt -- and I can see how much wealth I have.

My net worth has now crossed over the $1 million mark. And while this is an unbelievably privileged position to be in, it doesn't mean what I once thought it would. I once associated having $1 million in assets with being able to spend whatever you want, but that's definitely not the case for me.

Here's why.

Having a lot of assets isn't the same as having a lot of money to spend

There's a very simple reason why having a net worth of $1 million doesn't mean I can just spend whatever I want. Most of my wealth is in either my retirement accounts or in my home, and that's not a liquid investment.

See, I have diligently saved money in retirement accounts at my brokerage firm ever since I started working. And I have benefitted from some of my investments performing well. That means I now have a pretty hefty balance in those retirement accounts that makes up a good portion of my net worth.

But I'm a long way away from retirement. And I can't take the money out of these accounts, even if I wanted to, without incurring an early withdrawal penalty. So, while I have this money and it will help me have a more secure future -- and it helped me cross over the $1 million mark when tracking my net worth -- it doesn't mean I can spend it.

Another big portion of my wealth is tied up in my home. I bought a house well over a decade ago, I've been paying my mortgage down ever since, and I have benefitted from the property going up in value. The valuable asset that I now own has helped me grow my net worth. But I can't spend the money tied up in my house since I don't want to sell my home or borrow against the equity in it.

Careful spending is still in my future

All of this means that while I feel good about the financial decisions I made and I feel like I'm on the path toward a secure future, I don't feel "rich" today or like I can just go out and buy whatever I want.

I know that I need to leave my retirement money and home equity alone and, in fact, keep working on paying off my mortgage and saving for retirement, if I ultimately want to have the security I'm hoping for later in life.

So, while I'm very grateful to have a high net worth, the fact is that I'll need to continue making smart money decisions -- including being careful with my spending -- for quite a long time to come. And I'm OK with that, since I've seen my dedicated efforts to make the right financial moves pay off big time as my net worth has grown.