Join Early Retirement Today
View Poll Results: How much $ do you have NOW: Holdings + Home Equity + (Annual Non-SS Pension*25)
0-250K 16 5.30%
250-500K 21 6.95%
500-750K 14 4.64%
750k - 1mm 33 10.93%
1mm - 1.25mm 29 9.60%
1.25mm - 1.5mm 34 11.26%
1.5mm - 1.75mm 20 6.62%
1.75mm - 2mm 28 9.27%
2mm - 2.5mm 36 11.92%
> 2.5mm 71 23.51%
Voters: 302. You may not vote on this poll

Reply
 
Thread Tools Search this Thread Display Modes
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 12:02 AM   #21
Full time employment: Posting here.
 
Join Date: Jun 2006
Posts: 718
Re: Annual "Watcha Worth" Poll

WoW look at all the 2.5> :
__________________

__________________
Mwsinron is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 12:36 AM   #22
Recycles dryer sheets
 
Join Date: Jun 2005
Posts: 301
Re: Annual "Watcha Worth" Poll

I think we need a combo factor that takes into account your net worth and your age - kinda like BMI is for bodyweight. (although I think the BMI is primarily BS)

< 250k @ 25 years old, say, is kinda meaningless compared to > 2.5M at 65 years old.

Sounds like a spreadsheet project.....

- John
__________________

__________________
runchman is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 07:27 AM   #23
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Annual "Watcha Worth" Poll

I'm assuming that all my hundreds of thousands of dollars worth of debt is to be subtracted to arrive at a net worth? The formula presented in the poll question doesn't make this assumption explicit.
__________________
justin is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 07:41 AM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by Mwsinron
WoW look at all the 2.5> :
I think the "(Annual Non-SS Pension*25)" part of the poll is important - most times people do not take it into account when computing their net worth. Now that I think about it I may have forgotten it in my caluculations and should be one catagory higher. If you add in Social Security the numbers would really jump.

I think it points out the how much wealth there is in this country. I think the news reports we get about the number of millionairs in this country are under reported. I think there are a lot of millionairs in this country who do not show it in their posessions.

__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 07:52 AM   #25
Recycles dryer sheets
 
Join Date: Dec 2005
Posts: 209
Re: Annual "Watcha Worth" Poll

I think the upper half of the bell curve was overlooked.
__________________
bbuzzard is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 07:58 AM   #26
Recycles dryer sheets
 
Join Date: May 2006
Posts: 230
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by dex
I think the "(Annual Non-SS Pension*25)" part of the poll is important - most times people do not take it into account when computing their net worth.
I hate to quibble with definitions for polls, but IMHO it isn't right to include "pension * 25" in "net worth." Having a $40k pension isn't the same as having $1MM in the bank if for no other reason then when the person dies the pensioner's kids get nothing and then other person's kids inherit $1MM. If Aunt Gertrude sends you a check for $50 for your birthday every year it doesn't increase your net worth by $1,250 IMHO. (Or more to the point, Megacorp still owns the income producing assets after the pensioner dies.) So, really this isn't a "net worth" poll it's a "standardized individual spending power" poll.
__________________
terminator is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 08:00 AM   #27
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by terminator
I hate to quibble with definitions for polls, but IMHO it isn't right to include "pension * 25" in "net worth." Having a $40k pension isn't the same as having $1MM in the bank if for no other reason then when the person dies the pensioner's kids get nothing and then other person's kids inherit $1MM. If Aunt Gertrude sends you a check for $50 for your birthday every year it doesn't increase your net worth by $1,250 IMHO. So, really this isn't a "net worth" poll it's a "standardized individual spending power" poll.
Getting that pension enables you to avoid withdrawing said amount from your nestegg, leaving it there to compound away, no? More for the heirs, no?
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 08:21 AM   #28
Thinks s/he gets paid by the post
tryan's Avatar
 
Join Date: Mar 2005
Posts: 2,449
Re: Annual "Watcha Worth" Poll

Bogle says use a 14 x annual for pension AND SS (be darned if I can find the reference)..... may be next year's poll.

Also said include this in your BOND calculation. Justifies being heavy into stocks IMHO.
__________________
FIRE'd since 2005
tryan is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 08:23 AM   #29
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
Re: Annual "Watcha Worth" Poll

Dang! 14 x SS?! Bump me up another couple categories!

Too bad there will be around 30 years between FIRE and receiving SS...
__________________
justin is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 08:26 AM   #30
Recycles dryer sheets
 
Join Date: May 2006
Posts: 230
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by Rich_in_Tampa
Getting that pension enables you to avoid withdrawing said amount from your nestegg, leaving it there to compound away, no? More for the heirs, no?
I see your point. But let's take four people. A has a $40k pension, B has $1MM, C has a $40k pension and $1MM and D has $2MM.

Net worth according to this poll: A - $1MM, B - $1MM, C - $2MM, D - $2MM

So, according to this poll, A=B and C=D.

Inheritance/estate gifts left behind:

A - $0. Has to spend his $40k on living expenses.
B - $1MM. Spends the income, but leaves behind the principle plus on average enough to make it an inflation-adjusted million (since he's presumably making let's say 7% on average, spending 4% of that and re-investing the other 3%).
C - $1MM plus compounding of 7%.
D - $2MM. $1MM inflation-adjusted and $1MM plus compounding of 7%.

To me it's the difference between having a life estate or trust income versus owning/controlling it. The residual has value and in one case you control it and in another you don't.

Granted there all sorts of other issues to consider (security! guaranteed COLA! no bear market worries!), but for a "net worth" poll, the numbers aren't comparable IMHO.
__________________
terminator is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 08:46 AM   #31
Recycles dryer sheets
 
Join Date: Mar 2007
Posts: 211
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by terminator

Granted there all sorts of other issues to consider (security! guaranteed COLA! no bear market worries!), but for a "net worth" poll, the numbers aren't comparable IMHO.
A valid point. When time comes for FIRE, DH and I's situation should hopefully look something like option C--he's got the high-tech, high pay, high(er) risk career, I've got the OK-paying and low(er) stress gov't job that will ensure we never have to live on cat food. For us, the security outweighs the loss of control over part of our retirement. YMMV, of course. I'm also not convinced this is the "right" way to compute net worth, but this is all just back of the envelope doodling for most of us anyway. :-)
__________________
OKLibrarian is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 09:04 AM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by OKLibrarian
YMMV, of course. I'm also not convinced this is the "right" way to compute net worth...
Exactly. If anyone thinks this is net worth they should just go into a bank and try to borrow against it.

In some ways entitlements are superior to net worth worth, in some ways inferior. But entitlements are not identical to net worth.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 09:16 AM   #33
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by HaHa
Exactly. If anyone thinks this is net worth they should just go into a bank and try to borrow against it.
Yes, it's highly prone to diverse interpretations. Even in your example above, the "entitlement" might translate to higher income which in turn would qualify you for a larger mortgage, for instance.

For me, a non-COLA pension would literally be worth its face value - I'd use it for expenses hand-to-mouth and would benefit from investing my "real" assets more aggressively or patiently - don't know just how to factor that in, so I take the conservative stance and call it even (even though I know it's worth some factor more, I also know a corporate pension can go away some day - just ask the Delta pilots, etc.).
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 09:27 AM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by Rich_in_Tampa
For me, a non-COLA pension would literally be worth its face value - I'd use it for expenses hand-to-mouth and would benefit from investing my "real" assets more aggressively or patiently - don't know just how to factor that in, so I take the conservative stance and call it even (even though I know it's worth some factor more, I also know a corporate pension can go away some day - just ask the Delta pilots, etc.).
I don't really know what you mean by "its face value". Do pensions have a face value? If you mean the sum of expected payments over some lifespan then you are neglecting the time value of money. A COLA pension is basically worth its sum of payments, if one makes the simplifying assumption that he will use the T-bill rate as a discount factor and that rate will be close to identical with the inflation rate over time. Which it has been more or less. Nevertheless, this will somewhat overvalue the pension. Another very good and simple way is to get a quote from Vanguard/AIG for a COLA annuity with the same provisions as the pension you are evaluating.

But to value a non-cola pension one should discount the payments at some rate => than expected inflation.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 09:29 AM   #35
Moderator Emeritus
Rich_by_the_Bay's Avatar
 
Join Date: Feb 2006
Location: San Francisco
Posts: 8,827
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by HaHa
I don't really know what you mean by "its face value"
Periodic payments x life expectancy is what I had in mind, 0% APR (non-COLA) in the way I would use the money.
__________________
Rich
San Francisco Area
ESR'd March 2010. FIRE'd January 2011.

As if you didn't know..If the above message contains medical content, it's NOT intended as advice, and may not be accurate, applicable or sufficient. Don't rely on it for any purpose. Consult your own doctor for all medical advice.
Rich_by_the_Bay is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 09:47 AM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,386
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by Rich_in_Tampa
Periodic payments x life expectancy is what I had in mind, 0% APR (non-COLA) in the way I would use the money.
It is possible that we are saying the same thing, I don't know. Since money is fungible I am not sure what difference it might make how one plans to use it.

Anyway, a quick and accurate check on the value of any annuity (which is what a pension is) is to request a quote from an insurance company for an annuity with the same terms as the pension in question. Another way is to key it into any financial calculator.

ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is online now   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 09:49 AM   #37
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,322
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by Rich_in_Tampa
Periodic payments x life expectancy is what I had in mind, 0% APR (non-COLA) in the way I would use the money.
I just don't see how that could be right. Doing so would make a non-COLA'd pension appear to be worth more than one with COLA's. I believe the correct way is to find the present value of a COLA'd pension using the TIPS rate. For a non-COLA'd pension the discount rate should be the long-term rate on that company's debt.
__________________
I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
FIRE'd@51 is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 11:40 AM   #38
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
Re: Annual "Watcha Worth" Poll

Quote:
Originally Posted by justin
I'm assuming that all my hundreds of thousands of dollars worth of debt is to be subtracted to arrive at a net worth? The formula presented in the poll question doesn't make this assumption explicit.
It is implicit in the word "net."
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 12:30 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: Annual "Watcha Worth" Poll

I've never included the future value of my small, non-cola private sector pension when calculating my present net worth, but that's just me.

For others who do want to include the future value of pensions, be sure you use the value based on what you've already earned and vested. Don't assume you'll be with your employer for X more years or that the plan won't change for future years you continue to work there. What would your pension payments be at some age X if you walked off the job today?

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: Annual "Watcha Worth" Poll
Old 03-27-2007, 12:36 PM   #40
Full time employment: Posting here.
Sandy's Avatar
 
Join Date: Dec 2006
Location: Florida
Posts: 855
Re: Annual "Watcha Worth" Poll

I too never consider the future value of any retirement or SS. Net worth is what I have today and what would be here if I wasn't.

Those future incomes could allow me to retain more of my networth in the future (reduced needed withdrawal), but counting it now as part of net worth would be like counting my expected salary until FIRE as part of my networth.
__________________

__________________
I would not have anyone adopt my mode of living...but I would have each one be very careful to find out and pursue his own way, and not his father's or his mother's or his neighbor's instead. Thoreau, Walden
Sandy is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Personality Poll Martha Other topics 85 06-26-2010 06:33 AM
Poll: What were you in school? SonnyJim Life after FIRE 49 05-07-2007 11:39 PM
Poll #1 Early retirees and your Marriage ESRBob Life after FIRE 2 05-25-2005 07:50 PM
Credit Qs on PBHG's annual report (31 Mar 04) Nords FIRE and Money 1 07-28-2004 06:02 AM

 

 
All times are GMT -6. The time now is 08:34 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.