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Old 11-15-2011, 12:53 PM   #21
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Originally Posted by rescueme View Post
In retirement, net worth means little. Heck, I could have $0 in retirement investments yet cover all my required expenses (however you want to define "required") with possibly a pension, SS, and other income "products".

For me, it's just a feel good/bad measurement. .
As you say, "for you" net worth is just a feel good/bad measurement. But for many others whose primary source of retirement income is withdrawals from a FIRE portfolio, net worth is everything as it could represent one's only source of income.

Folks like you and I who didn't retire early but rather waited until our late fifties and who will have significant SS and/or pensions will obviously have a different POV than folks retiring in their 40's with no pension and/or SS.

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Old 11-16-2011, 07:04 PM   #22
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Net worth should be at least: Multiply your 'age minus 27' by your pretax annual household income and divide by five.

I don't remember where I got this, but I copied and pasted it next to my net worth statement on my computer.

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Old 11-17-2011, 04:12 AM   #23
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+2. That's exactly the way I have realized that I have been financially independent for a while now. Living frugally and earning a very good income have helped.
Originally Posted by Huston55 View Post
I think a better approach is to start with an estimate of expenses and go from there using some of the approaches outlined in other strings of posts.
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 11-17-2011, 04:15 PM   #24
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So up till age 28, it's OK to have a net worth of zero?

Originally Posted by racy View Post
Net worth should be at least: Multiply your 'age minus 27' by your pretax annual household income and divide by five.

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Old 11-17-2011, 06:44 PM   #25
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Originally Posted by Amethyst
So up till age 28, it's OK to have a net worth of zero?
Zero at 27. Negative before that.

That's the idea behind at calculation, by that age you've been out of college for only a few years, so you likely have large student loans, car debt, only a few years at a job (if you found work out of college) so little or no retirement savings, etc.

If you don't have that debt (such as no college loans) at 25 or whatever, by that calculation you're ahead of the game.

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