Your Current Net Worth - 2005

[HFWR]

Re: Your Current Net Worth

I don't want to know how big a pile you've made.

Pile of what

 

[Danny]

Re: Your Current Net Worth

Pile of what

Your pile


YDPIYDP and YDB

 

[Dreamer]

Re: Your Current Net Worth

I wish that we had more money saved, but no way would I want to be responsible for having $30M+. I would rather stick with what we have now!!!

Dreamer

 

[TargaDave]

Re: Your Current Net Worth

I have an older brother in the coveted last category and two younger brothers living hand to mouth. So much for the influence of common genes and upbringing.

 

[haha]

Re: Your Current Net Worth

That distribution up there is pretty impressive. Would those in the last 2 categories please identfy themselves, so I can sell you something?

Ha

 

[preben]

Re: Your Current Net Worth

Man we have a lot of millionaires+ here! Close to half the responders!

There are only about 7M millionaires on the planet corresponding to about 1 out of every 1000 people so the club is still PLENTY exclusive for me!

Cheers!

Ps. and WHO is that with 5M+? If you are female and single send me a PM!

 

[SteveR]

Re: Your Current Net Worth

The net worth of the typical American household is $35,000 today.

Households in the $5 million category number about 328,000; with 38,000 enjoying at least $10 million worth of comfort.

Source:

http://www.ncpa.org/pd/economy/pdeco/pdeco5.html

According to this years edition of the World Wealth Report conducted by Merrill Lynch and Capgemini, the number of millionaires worldwide increased by 600,000 to 8.3m in 2004. The report defines a millionaire as an individual who has assets worth more than $1m excluding their primary residence.

The combined wealth of all these high net worth individuals (HNWI's) exceeds $30 trillion. At a regional level, Australia, India, Singapore, and Hong Kong were the strongest performers - Australia added 47 new millionaires a day throughout 2004, whilst India added almost 25 a day.

The following is a regional breakdown:

North America: Number of millionaires grew by 9.7%; total wealth grew 10.2%.
Asia-Pacific: Number of millionaires grew by 8.2%; total wealth grew 8.5%.
Europe: Number of millionaires grew by 4.1%; total wealth grew 3.7%.
Latin America: Number of millionaires grew by 6.3%; total wealth grew 7.9%.
Middle East: Number of millionaires grew by 9.5%; total wealth grew 28.9%.

Source:

http://en.wikinews.org/wiki/600,000_new_dollar_millionaires_created_in_2004

 

[unclemick]

Re: Your Current Net Worth

Hmmm

1993 - first year of ER - NW his and hers about 350k including the duplex which we sold and consumed along the way.

Over 1 mil in 2000 and again in 2003 not counting any RE. I.e. - the bulk of our nw increase came in ER.

So goes Mr Market.

Heh, heh, heh. Not to worry - the Norwegian widow still gets her dividends.

BTY - what's honesty Is that a Missoula joke?

 

[preben]

Re: Your Current Net Worth

Ok. 8 million millionaires on the planet - still about 1 out of every 1000.
Also note that as the question was about net worth most here probably included their primary residence while the report above EXCLUDES the primary residence. Cheers!

 

[wabmester]

Re: Your Current Net Worth

This whole millionaire thing is overrated. Once you pull the plug, the size of your pile doesn't matter as much as burn rate, lifespan, and investment returns.

Hmm, time for a new poll....

 

[greg]

Re: Your Current Net Worth

Hmm, time for a new poll....

Hey, Dan, how 'bout an a*s poll? Excuse me, how about a lower GI poll?

--Greg

 

[Danny]

Re: Your Current Net Worth

Hey, Dan, how 'bout an a*s poll? Excuse me, how about a lower GI poll?

--Greg

....Once you pull the plug, the size of your pile doesn't matter as much as burn rate, lifespan, and investment returns.

Oooooo... wabmester... you are an original thinker... please explain your experiences so we'll know what our goals should be.

We'll use you as the standard I'm sure.

I'm reluctant to start a poll on this subject let alone even get close to touching one with a 10 foot poll.

But lets move those comments and your own personal insights right along........

DanTien

 

[sgeeeee]

Re: Your Current Net Worth

This whole millionaire thing is overrated.   Once you pull the plug, the size of your pile doesn't matter as much as burn rate, lifespan, and investment returns.

Hmm, time for a new poll....

Here it is, wab:

http://early-retirement.org/forums/index.php?topic=3621.msg61294#msg61294

 

[Nords]

Re: Your Current Net Worth

Ps. and WHO is that with 5M+? If you are female and single send me a PM! 

Ben, maybe you need to evaluate your priorities.

If they're worth $5M+, is gender & marital status relevant?

 

[Patrick]

Re: Your Current Net Worth

I don't want to know how big a pile you've made.

Do you mean pile of . . . . money?

 

[tozz]

Re: Your Current Net Worth

Good, Nords! For the ER folks here, it always pays to think outside the box.

If they're worth $5M+, is gender & marital status relevant?

 

[Patrick]

Re: Your Current Net Worth

Don't forget that there are two kinds of net worth:

There's the classic: Total assets - Total liabilities (which is what I assume you ask in your poll)

And there's the "harvestable" net worth I use to determine how much I need to be FI.  This net worth only takes into account those assets that will generate income to me, like my mutual funds, bonds, and bank CDs.  For example, your home counts as part of your net worth, in the classic sense.  However, if your only asset is a $1mil home with no mortgage, you will not be able to be FI unless you plan on tapping the equity by selling it, getting a reverse mortgage, renting it, etc.

The harvestable net-worth is more meaningful to me since I don't plan on generating any income from my home nor some of my other assets like my wedding ring and the pencil on my desk.

If we do it this way, what value do we assign to our pensions?  I.E., if I get a $50K per year pension, what net worth does that represent, since it's already "harvesting" for me? $50K/4%=$1.25M? 

 

[sgeeeee]

Re: Your Current Net Worth

If we do it this way, what value do we assign to our pensions?  I.E., if I get a $50K per year pension, what net worth does that represent, since it's already "harvesting" for me? $50K/4%=$1.25M? 

That calculation will probably overestimate your net worth -- but it depends on the assumptions you want to make.  Remember the 4% rule assumes that your expenses increase with inflation each year.  Unless your pension is indexed to inflation, the $50K loses real value each year.

One way to come up with a net worth for a pension is to use an annuity calculator.  intrcst's Retire Early Home Page can direct you to some online annnuity calculators.  Of course you have to make some assumptions about rate of return, etc. and can come up with a wide range of answers.

Then there is the risk question.  Would you buy an annuity if you didn't have a pension?  Would you adjust your equity/bond ratio if you didn't have a pension.  Bogle and others have argued that people should adjust their equity/bond ratio upward if they are collecting social security or pensions. 

One of the most thorough ways to come up with a net worth equivalent for a pension is to run FIRECALC including all your investments plus the pension (using a negative number in the first withdrawal box).  Let the program compute a spending rate for a 95% success rate.  Then eliminate the pension from the calculations and increase your nest egg till you achieve a 95% success rate again.  The amount you needed to increase your nest egg is the approximate value of your pension.  I played around with this a few years ago. (I found my notes on this after my original post). The answer depends on the ratio of expenses to pension, on the length of time in retirement, on your assumed equity/bond allocation, etc. A number I came up with was $10K of pension was equivalent to about $220K of present net worth. That assumed that the ratio of pension to spending was about 0.2, 30 year retirement, 50/50 equity bond, CPI inflation, commercial paper for bonds.   

 

[Danny]

Re: Your Current Net Worth

Do you mean pile of . . . . money?

Patrick -
I want it to mean whatever you want it to mean....

DanTien

 

[Patrick]

Re: Your Current Net Worth

Patrick -
I want it to mean whatever you want it to mean....

DanTien 

OK, Krugerrands, then! 

 

[Danny]

Re: Your Current Net Worth

OK, Krugerrands, then!

Same as cash, which is just as good as money...YB

 

[Zorba]

Re: Your Current Net Worth

Something doesn't add up. We seem to have a large fraction of people in this
group with net worth in the area of $2 million and yet when discussing living expenses
in ER we see numbers quoted in the $50-100/day range. Thats a SWR<2%.

Are people really using such a low SWR - a depressing prospect for us wannabees,
or maybe RE living expenses for the millionaires is higher than $50-100/day?

Zorba

 

[Jarhead*]

Re: Your Current Net Worth

Something doesn't add up. We seem to have a large fraction of people in this
group with net worth in the area of $2 million and yet when discussing living expenses
in ER we see numbers quoted in the $50-100/day range. Thats a SWR<2%.

Are people really using such a low SWR - a depressing prospect for us wannabees,
or maybe RE living expenses for the millionaires is higher than $50-100/day?

Zorba

Zorba: The only two actual retirees that I am aware of on this board that report the middle range of 50-100 a day would be Unclemick and John Galt. There a a few others that are living in other countries that may fall into that range.

Anyway, it's really beside the point regarding what somebody else spends. We all have different obligations and lifestyles. Whatever works best for you is what's important.

Does that make sense? Hope so.

 

[Mr._johngalt]

Re: Your Current Net Worth

Zorba:  The only two actual retirees that I am aware of on this board that report the middle range of 50-100 a day would be Unclemick and John Galt.  There a a few others that are living in other countries that may fall into that range.

Anyway, it's really beside the point regarding what somebody else spends.  We all have different obligations and lifestyles.  Whatever works best for you is what's important.

Does that make sense?  Hope so.

Gotta weigh in.............. Jarhead is right. 25K per year is absolutely
no problem for us. We have 2 homes (both waterfront or near
waterfront) , 2 vehicles, 3 boats. DW works, and SS is one year away
for me. We eat out, travel, and NO budget at all (yet). I can't see
that we are deprived in any way. I'm pretty sure Unclemick would agree.

JG

 

[unclemick]

Re: Your Current Net Worth

It's called History - time and the market blessings of the 90's caused my net worth to out run the slow climb of my cheap a#s spending habits.

Wasn't about to change my comfort zone or spending habits just to suit the market.

Drifting up in spending - but slowly. Have no great unmet passions(like scuba dive Bora Bora) requiring me to wed SWR to a retirement calculator. Upgrading my chevy truck to a GMC - just doesn't give me the jollies like picking a used Maypop from the junkyard - makes driving fun - wondering how far you'll get on 'used tires'. Always keep a can of fix a flat handy.

Soooo - dink along like before - and if something pops up to float our boat - the margin of safety is there.

Hey! - we got Direct TV this year(not my idea).