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Old 01-03-2013, 10:18 AM   #81
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Finally a thread like this I can reply to since I'm not an investor.

Net worth was up 16.3% in 2012. (It was a good year for the business).
No debts, no real estate. 95% cash.
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Old 01-03-2013, 10:25 AM   #82
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Finally a thread like this I can reply to since I'm not an investor.

Net worth was up 16.3% in 2012. (It was a good year for the business).
No debts, no real estate. 95% cash.
Surely, you are an investor. You just put all your effort in your business, while most people here like myself are passive investors.

Definitions of "to invest" found on the Web:

1. to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.

2. to use, give, or devote (time, talent, etc.), as for a purpose or to achieve something.

As part of my diversification in retirement, I have been investing more time and money into appreciation of food and drink. And as I have found out, I cannot eat nor drink all that much, so it really takes more time than money in this pleasure pursuit. And a retiree has lots of time!
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Old 01-03-2013, 10:31 AM   #83
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Heh. A "net worth calculation" thread and the year is only three days old.

Anyone want to lay odds on when the first "pay off the mortgage early" or "take SS at 62 or wait" threads will show up?
But if you pay off the mortgage, shouldn't you stop counting the house as an asset in you net worth because you no longer have the corresponding liability of the mortgage?
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Old 01-03-2013, 10:55 AM   #84
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Ah, as this thread title is about one's networth, and I was mentioning some other "investment activities", I should have added that people do not call these "life enrichment" activities for nothing.

These pursuits, whether involving travel, cooking, or gardening, can add to one's life richness, yet do not have to cost that much if one knows what he's doing. I keep mentioning some RV'er blogs as an example of how their lives have an intangible richness compared to mine. See, it's not all about money. How do I compare my net worth to theirs, when we add life experiences to the material possessions?
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Old 01-03-2013, 11:17 AM   #85
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But if you pay off the mortgage, shouldn't you stop counting the house as an asset in you net worth because you no longer have the corresponding liability of the mortgage?
Oooooooo! BWE - cut it out!
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Old 01-03-2013, 11:55 AM   #86
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17% here, but I am still w**king as I race to FIRE
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Old 01-03-2013, 11:56 AM   #87
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But if you pay off the mortgage, shouldn't you stop counting the house as an asset in you net worth because you no longer have the corresponding liability of the mortgage?
Only if the house goes "poof!" when the mortgage is paid off.
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Old 01-03-2013, 11:58 AM   #88
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26% but still working and investing. And this doesn't include real estate, so very happy about our investing progress since leaving Ameriprise.

Lisa899 - I have to take you to the woodshed... I noticed you used the "w" word (see above). Please refrain from using curse words.
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Old 01-03-2013, 12:00 PM   #89
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2012 was my last year of employment. I retired early on January 1, 2013 and have already received my first pension payment.
Welcome to the club. Retirement is the best damned j*b I've EVER held.
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Old 01-03-2013, 01:32 PM   #90
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Overall Net Worth was up 12%.

Earnings on retirement portfolio (without contributions) was 13.7%.

Net worth should have gone up signifcantly, but we made some really large home improvements that probably didn't increase the home value all that much - but we enjoy them. This year will be about spending less money.
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Old 01-03-2013, 01:47 PM   #91
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Forget about should you include home value in net worth. What about the more pressing issue of whether we should pre-pay the mortgage at FIRE time or keep the mortgage and invest what we would use to pay it down? After all, that impacts your assets AND liabilities, so it could mean a huge difference to your net worth, however defined. What do you guys think about this more important question?

(yes, I include my house in my net worth, but not in my "portfolio value" to determine how much I can withdraw).
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Old 01-03-2013, 02:12 PM   #92
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Net worth: How about including our share of government debt ($53,000 per person and climbing) on our individual balance sheets? (Multiply as required to determine your household amount.) This doesn't count the unfunded liabilities of government, just the stuff on the books.
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Old 01-03-2013, 02:17 PM   #93
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Net worth: How about including our share of government debt ($53,000 per person and climbing) on our individual balance sheets? (Multiply as required to determine your household amount.) This doesn't count the unfunded liabilities of government, just the stuff on the books.
I'll pay my share right now if will absolve me from any future liability...
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Old 01-03-2013, 02:32 PM   #94
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I'll pay my share right now if will absolve me from any future liability...
Hey, that's not a bad idea. It's clear the government is looking for money right now even if it means less revenue later (ref the recent expansion of 401K-to-Roth 401K rules), so maybe this idea would sell.

Most folks would rather delay payment, but the typical delayed-gratification ER type might see the advantages of paying now to avoid later pain.

You'd have to find taxpayers willing to believe the promise of absolution from future liability. Methinks that will be a tough one.
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Old 01-03-2013, 02:35 PM   #95
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I'll pay my share right now if will absolve me from any future liability...
How 'bout we letting you just walk away without paying that $53K, but in return you will also forgo your part of the future liability?

I mean no SS, and no Medicare for you free man! My children will thank you.
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Old 01-03-2013, 02:36 PM   #96
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I am up 38% for the year, 15% from market returns, the rest from savings and debt repayment. The total bump was a good bit over 6 figures, which was the first time I've grown my NW that much in a year.

I take that back. In 2009 I was a bit over 100K bump in a year, but given that I was down 75K in 2008 I guess there was no sense of hedonism. Still w&%king.
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Old 01-03-2013, 02:37 PM   #97
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How do people determine the value of their homes for this calculation? Are sales and other costs considered?
I just go by what the county assessor office says unless there is strong evidence that it is wrong. You also could also you a source like zillow.com or
trulia.com. These aren't perfect but they aren't bad. I just ran zillow on the 5 properties I ran they all were reasonable estimates.

I don't include transaction cost although you could certainly make the case that for real estate it makes a material differences.
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Old 01-03-2013, 03:52 PM   #98
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Up 20%, hoping I can do even better next year! Still w*rking and saving.
(had to edit this, I also included the swear word..!)
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Old 01-03-2013, 04:08 PM   #99
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I'll pay my share right now if will absolve me from any future liability...
Um - I think I'm already paying that share for 2012!!!!
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Old 01-03-2013, 05:21 PM   #100
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If you are asking whether to include the costs associated with selling your house - no, just like you don't include the costs associated with selling your liquid assets (taxes, etc.). That's not how net worth is calculated. Costs associated with owning/maintaining a home are part of annual expenses, and aren't counted until they are spent.
Of course, the key is "net" worth. Mutual funds and equities are liquid and selling cost are minimal. If a house is 15% of total net worth and selling cost is 6%, that means net worth is overstated by as much as 1%.
I do agree that for change in net worth, sales and other costs are not meaningful.
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