Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-08-2019, 07:48 AM   #41
Dryer sheet wannabe
 
Join Date: Nov 2017
Posts: 23
I tend to follow this calculation. It makes sense to me.

https://www.sapling.com/12011834/fac...sion-net-worth
__________________

retire202052 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!

Old 11-08-2019, 08:00 AM   #42
Thinks s/he gets paid by the post
Rianne's Avatar
 
Join Date: Aug 2017
Location: Champaign
Posts: 2,153
The only reason I consider SS and pension is for long term care. I don't consider it today's dollars or as a asset now. We do not have a LTC policy. When all is entered in FIREcalc, those future earnings are considered to give the long term outlook. We can easily afford LTC with our pension and SS benefits + the portfolio as FIREcalc estimates future earnings. I understand, NW is a point in time, like today and will be different tomorrow. But the overall goal is to plan for the future. NW is irrelevant.
__________________

__________________
"If you want to go fast, go alone. If you want to go far, go together.
Rianne is offline   Reply With Quote
Old 11-08-2019, 08:02 AM   #43
Recycles dryer sheets
Niuatoputapu's Avatar
 
Join Date: Nov 2014
Posts: 115
I don't use Net Worth for anything. As this discussion demonstrates, people use different definitions of the term, so comparisons with others would be challenging. But if I were to calculate, I would use:

Investments and cash (Fido, VG, etc. balances)

plus probable House disposal value (Market Value, less mortgage, less estimated selling commission)

Less any other debt

Equal Net assets before income taxes

Less estimated income taxes on tax-deferred investments

Equal Net Assets
__________________
ER'd 6/5/2015 at age 58. DW targets R in June of a future year.
Planned WR before my SS (2021-2026) is 5-6%, then start SS and 4% WR at age 70 (2027)
Niuatoputapu is offline   Reply With Quote
Old 11-08-2019, 08:48 AM   #44
Recycles dryer sheets
 
Join Date: Jun 2013
Posts: 58
I measure my net worth against against some simple ratios published in the book "Your Money Ratios" (YMR) by Charles Farrel, although I'm sure he didn't invent the concept. The basic premise is that if you have X times your salary at age Y you are doing a "good enough" job of accumulating, with X increasing as you age. I understand the flaws of using salary rather than projected retirement expenses, and that this is aimed at traditional retirement, but it's one tool in the box.

Turning the calculation around I back out a "YMR salary" based on my net worth and age. If the salary is less than what I make I'm behind, if it's more I'm ahead. Prior to my divorce my YMR salary was way ahead of what I was actually making, so I was ahead. Five years later and remarried it's way behind our combined income, but as I project our savings goals out to our FIRE date the YMR salary should be higher than it ever was.
HenryD is offline   Reply With Quote
Old 11-08-2019, 08:50 AM   #45
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Location: Milford
Posts: 12,286
Quote:
Originally Posted by NW-Bound View Post
>>>

Please note that the OP was asking about comparing or benchmarking your networth against your peers.

It's not just about knowing what you have.

>>>
If you absolutely must compare yourself to others and you live in the U.S., the Census Bureau can help with that. Download the Excel spreadsheet found here.

https://www.census.gov/data/tables/2...ownership.html

I personally find it to be a fool's errand. There will always be many people with both more and less than I have. The only relevant question is whether I have as much as I need, and the net worth of other people cannot possibly answer that question.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 11-08-2019, 09:29 AM   #46
Thinks s/he gets paid by the post
 
Join Date: Apr 2015
Posts: 1,009
Quote:
Originally Posted by Ronstar View Post
I calculate net worth like I learned in my college accounting classes and how we did it in business in preparing the balance sheet.

Net worth = total assets minus total liabilities. A snapshot at a specific point in time.

Itís a simple as that. So yes, the house is included. A balance sheet can be prepared for an individual, a household, a company - any entity that has defined assets and liabilities.

Pension, income, ss has nothing to do with the balance sheet. Those are income statement items.
+1, same here.
I only check net worth maybe once yearly, if even that.
How I compare with peers is not that important to me.
__________________
Give me a fish, I will eat for a day. Teach me to fish, I will eat for a lifetime.
pacergal is offline   Reply With Quote
Old 11-08-2019, 09:53 AM   #47
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Location: Crownsville
Posts: 2,416
This might be sloppy accounting on my part, but I don't really pay attention to my net worth. The only figure I really pay attention to is investible assets (401k, IRAs, after tax mutual funds, online brokerage, checking account, etc).

I do have equity in the house, as I put 25% down. But, I figure that doesn't really do me much good in the short term, as it's not money I can easily live off of. I'd have to either take out an HELOC, refinance and take cash out, or sell the house and downsize.

When I've run my FireCalc predictions in the past, I'd run two sets of numbers. One would presume full SS benefit, for whatever given year I retire. The other would presume NO SS benefit at all. That might be a bit catastrophic, as I'm sure SS will be there, just perhaps not full benefit. But according to the scenarios I've run the difference between full SS and no SS is usually only 2-3 years. For instance, assuming no cuts to SS, and I start claiming benefits at 62, FireCalc says I could retire now, at age 49, on $75K per year with a 94.9% chance of success. With no SS benefit at all, I'd have to wait until age 51 (93.9%) or 52 (96.9%) to get a similar chance of success.
Andre1969 is online now   Reply With Quote
Old 11-08-2019, 10:03 AM   #48
Thinks s/he gets paid by the post
 
Join Date: Apr 2010
Posts: 2,980
Net worth did not play a significant part in our decision to FIRE.

We saw no point in adding up the value of our home, automobiles, etc. Had our plan been to sell our home in order to fund our retirement the calculation would have changed.

Our focus was on income stream, ie pensions, and our equity base that provided passive income. All adjusted for after tax, inflation, and changes in lifestyle.
brett is offline   Reply With Quote
Old 11-08-2019, 10:09 AM   #49
Moderator Emeritus
Ronstar's Avatar
 
Join Date: Aug 2007
Location: A little ways southwest of Chicago
Posts: 11,389
Quote:
Originally Posted by Andre1969 View Post
This might be sloppy accounting on my part, but I don't really pay attention to my net worth. The only figure I really pay attention to is investible assets (401k, IRAs, after tax mutual funds, online brokerage, checking account, etc).
+1. Not sloppy accounting IMO. I never compute my net worth anymore. I used to give the bank a personal financial statement with net worth in order to get business financing, putting in estimated numbers for house, etc. But what's the point in figuring a net worth based on estimates?

IMO, the only number that matters is the investible assets.
__________________
The wilderness is calling and I must go.
Ronstar is online now   Reply With Quote
Old 11-08-2019, 10:13 AM   #50
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 25,599
Quote:
Originally Posted by NW-Bound View Post
>>>

Please note that the OP was asking about comparing or benchmarking your networth against your peers.

It's not just about knowing what you have.

>>>
Quote:
Originally Posted by ERD50 View Post
If my definition of "my peers" is "anyone with the same net worth as I have", the question answers itself!

-ERD50

Knowing what is possible can be helpful. Some years ago I had a free subscription of Money Magazine. I found personal stories interesting. For example, there was a doctor who made $200K in that pre-2000 time, yet he and his wife spent all that he made, and he had no savings.

For people with more modest income, if they learn that someone with the same paycheck can manage to retire early, perhaps they will not say that it is impossible.

Again, the range of net worth is huge for people making the same income, or in the same occupation. I think I am not doing too badly for my circumstances. Of course I still want more because it feels good.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 11-08-2019, 10:27 AM   #51
Recycles dryer sheets
 
Join Date: May 2014
Posts: 477
Networth is a number you can use to compare with your friends, so you know who is richer. Just a joke.
I am only interested in my investible assets, which I record at the end of every month to see my progress. I could easily add the value of my paid-off house, which did not seem to have changed in 13 years.
flyingaway is offline   Reply With Quote
Old 11-08-2019, 12:09 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 6,957
Send a message via Skype™ to kcowan
I track net worth to define what will be left when we liquidate our holdings for the heirs, including charities. It has been growing every year for the last ten after all living expenses.

We also use it to make advances on inheritances.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Old 11-08-2019, 12:34 PM   #53
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 25,599
Quote:
Originally Posted by Gumby View Post
If you absolutely must compare yourself to others and you live in the U.S., the Census Bureau can help with that. Download the Excel spreadsheet found here.

https://www.census.gov/data/tables/2...ownership.html

I personally find it to be a fool's errand. There will always be many people with both more and less than I have. The only relevant question is whether I have as much as I need, and the net worth of other people cannot possibly answer that question.
Exactly right. I know that I have more than I need, but less than what I want. I don't need to know about my neighbors or my friends.

I do compare my progress with the S&P and some other benchmarks. You have to, if you are an active investor.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 11-08-2019, 01:16 PM   #54
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru
Posts: 6,260
Quote:
Originally Posted by Gumby View Post
If you absolutely must compare yourself to others and you live in the U.S., the Census Bureau can help with that. Download the Excel spreadsheet found here.

https://www.census.gov/data/tables/2...ownership.html

I personally find it to be a fool's errand. There will always be many people with both more and less than I have. The only relevant question is whether I have as much as I need, and the net worth of other people cannot possibly answer that question.
Thanks for the link... I couldn't find it. A matter of curiosity. Not being in the first percentile, I wondered what the median net worth was for people my age, and that money doesn't have the same meaning as it did when I retired. 31 years ago, my salary was $48K... That seems low compared to today's values. While still not really high, adjusted for inflation that would now be $120K.

A second part of that Government Census page, is particularly interesting to me, as it gives some insight into "where" the net worth lies.
So.... where is the net worth?
House
Bank
Annuity
College savings
Vehicles
Cash Value Life Insurance
Real Estate
Ownership of business
Checking account
Stock Market
Rentals
Bonds
IRA
Jewelry/Marketable items, coin or stamp collection etc.

It's when the net worth is broken down and compared to the statistics that providess some insight into the what and why. Net worth doesn't necessarily translate into liquidity. For instance.... savings for a few students further education could easily be many thousands of dollars, that won't be there at retirement age.

Personally, I found the "by age" part of the chart to be most interesting, not just for the median net worth part, but for some of the other major assets... ie. house... LTC, annuity.

It would be interesting to see how the $1,000,000 theoretical amount required to retire, would be broken down by asset class.

A little different from just looking at personal net worth totals on a periodic basis.
__________________
"By the time you're eighty years old you've learned everything. You only have to remember it." George Burns (1896-1996)
imoldernu is offline   Reply With Quote
Old 11-08-2019, 01:29 PM   #55
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 7,442
Quote:
Originally Posted by NW-Bound View Post
I know that I have more than I need, but less than what I want. I don't need to know about my neighbors or my friends.

I do compare my progress with the S&P and some other benchmarks. You have to, if you are an active investor.
Since I have some low earning investments, like a rental that is not appreciating rapidly, and some CD's , I don't even try to see what I'm getting vs S&P.

I do calculate net worth each year, and it's nice to see it's been rising faster than inflation, which is my main concern to have more spending than last year.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 11-08-2019, 01:41 PM   #56
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 25,599
The comparison has to be on the total return basis, meaning the rental income must be included (minus expenses), and not just the appraised value of the property.

I never bother to include the value of my 2 homes. They cost me money, and do not appreciate all that much.

I look at the number at the bottom left of my Quicken screen, which sums up all of my liquid accounts, from the checking account to the HSA, various brokerage accounts, 401k's and IRAs, and Treasury Direct accounts. It's all there. I don't have to do any work to know exactly what I have.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 11-08-2019, 04:43 PM   #57
Thinks s/he gets paid by the post
HNL Bill's Avatar
 
Join Date: Dec 2017
Posts: 1,599
As others have said, "net worth" = assets minus liabilities, by definition.

My financial spreadsheet shows the marital "Net Worth" (including the home), and it shows the "Net Investable Assets", which is much more useful in determining potential RE income. I find it useful to track both, as it gives me an idea of the distribution of household value versus retirement assets to be used for income. In the future, a condo will be sold, and another purchased. If the new property is more expensive, then the ratio of NIA to NAV changes, and there's less NIA to tap for expenses. Part of the pie.

While I don't have college savings plans, I wouldn't count those in either of the above, as the money is not yours to spend (if it's for the kids). I also don't count pensions or SS, as they're monthly income, and you don't have them until you file.
__________________
Balance in everything.
HNL Bill is offline   Reply With Quote
Old 11-08-2019, 05:00 PM   #58
Full time employment: Posting here.
Offgrid Organic Farmer's Avatar
 
Join Date: Feb 2018
Location: An Un-Organized Township of Maine
Posts: 570
Quote:
Originally Posted by imoldernu View Post
How do you measure your net worth?
Net Worth is Assets minus liabilities.


Gender has no bearing on Net Worth.
Household size has no bearing on the conversation.
Age has nothing to do with it.
Education is not a factor.
__________________
Retired at 42 and I have been enjoying retirement for 18 years [so far].
Offgrid Organic Farmer is offline   Reply With Quote
Old 11-08-2019, 05:28 PM   #59
Thinks s/he gets paid by the post
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 4,508
Quote:
Originally Posted by Offgrid Organic Farmer View Post
Net Worth is Assets minus liabilities.


Gender has no bearing on Net Worth.
Household size has no bearing on the conversation.
Age has nothing to do with it.
Education is not a factor.
I don't think so

Men have more than women

You have more as you age

Education has a positive effect on net worth
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is offline   Reply With Quote
Old 11-08-2019, 05:50 PM   #60
Full time employment: Posting here.
Oz investor's Avatar
 
Join Date: Jun 2018
Location: Brisbane
Posts: 780
i use liquid assets ( the share portfolio + availbale cash ) minus liabilities .

the properties are worth whatever i sell them for , BUT i have no intention of selling them so the income goes into the cash part and the costs in the liabilities part .

i don't need to impress anyone ( and so i am still single ) nor look rich , so less likely to be mugged , or conned , or married , and don't like parties much ( except to stay in a corner and study human behaviour ) so don't normally get invited ( so i have plenty of reseaech and education time )

i would rather just move towards doubling my current liquid assets , than calculate a running total

boring but true

the government makes regular estimates of my net worth , and that helps keep somone in a pointless job ( distorting GDP figures ) , they seem to care more than i do
__________________

__________________
i hold the Australian listed versions of AU ( Anglo Ashanti ) , BHP , and JHG .

You must learn from the mistakes of others. You can't possibly live long enough to make them all yourself.

Samuel Levenson
Oz investor is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 8 (0 members and 8 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
Measuring progress to FIRE while w*rking jIMOh Young Dreamers 12 02-22-2010 01:45 PM
Any interesting ways for measuring progress? Crichton Young Dreamers 3 08-05-2008 07:07 PM
Retirement locations-- "Measuring Beauty" Nords Life after FIRE 34 05-12-2005 10:49 PM
Measuring success Skylark Young Dreamers 30 02-20-2004 03:57 PM

» Quick Links

 
All times are GMT -6. The time now is 08:43 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
×