Measuring Net Worth

[NW-Bound]

Quote:

Originally Posted by imoldernu How do you measure your net worth? Variables: Government standards or other financial sources. Male? Female? Household? Household size? Average? Median? Age: Specific or range? Include home or not. and other factors.... education, compared to salary, other variables... pension,Social Security, annuity, insurance policies, location (average COL). No... It really doesn't matter but we all use "Net Worth" as a factor in planning, budgeting and setting our personal goals. Do you have a source that you use as a standard for comparison?

I don't really know how much someone with my background, education, and work experience should have. He could be anywhere from a homeless guy to a centimillionaire or billionaire. A lot of random things happens in life.

I know what I have, and I can live comfortably with that. I do not know how compare myself to someone else.

[COcheesehead]

I use a number I call FIRE Pool. It’s made up of all the assets I will access in retirement.
So its my portfolio, real estate investments and a present value of expected social security.
To me, that is the only number that matters. I am not selling my house, cars or furniture in retirement, so why track it.

[HarveyS]

I count investments/529/HSA/savings/house equity. I don't count cars, personal property. I don't have any pensions. I don't count social security. I track change in net worth quarterly. I don't track investment returns. Off topic, but I track AA quarterly and adjust if 5% or more off my desired AA.

[davebarnes]

We just count what we have at Fido. I run the retirement planner and it says the widow will die with $29K in 2054.
No house.
No small HELOC.
No NPV of 2 SS.
No savings in the credit union.

Two engineering degrees and an MBA and I just can’t be that anal retentive.

[pb4uski]

Quote:

Originally Posted by W2R +1 Because of that, I don't really compute it. I do keep track of another sum that interests me more, although I don't call it "net worth" (because it isn't).That is the sum of my investment accounts and bank accounts. ....

+1 I focus on that number much more than net worth.

[NW-Bound]

>>>

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.

>>>

[PandaBear]

I consider net worth in the traditional sense (assets minus liabilities) but I’m pretty sure I’ve never figured out the actual number at any specific point in time.

We have a high value house (paid off) because we live in a HCOL area. Our retirement funds are low for what we will spend because we have 2 pensions that I think are pretty good. But I don’t think that the pensions themselves can count in net worth.

So any number I generate is kind of meaningless.

[Dtail]

Quote:

Originally Posted by pb4uski I don't really use net worth for much of anything other than making myself feel good. I include all assets and liabilities, including home value... but not the imputed value of my defined benefit pension or social security... and not deferred income taxes on tax-deferred assets even though I know that technically* deferred income taxes should be included. * like if I was doing a personal financial statement for a bank or other creditor.

+1

[FlaGator]

When working, benchmarking was helpful for me to ensure I was keeping savings cranked up. Doesn’t matter now. more interested in making sure what I have lasts to the end

[Scratchy]

I have a google finance sheet which updates automatically from ticker symbols and calculates:

Net worth: Assets including zillow value of home (I have no liabilities).

Liquid net worth: Assets excluding home

Post tax liquid net worth: Liquid net worth after discounting capital gains by 27 % and retirement accounts by 31 % for expected taxes. (This is an estimate of money I can actually spend.

Estate value: Net worth discounting retirement accounts by 30 % for expected taxes my heirs might pay. (This is an estimate of money my heirs might expect to have to spend if I died.)

[audreyh1]

Quicken tracks it for me automatically. The only real asset in Quicken is our house, and that is not a major component and changes little.

It also includes credit card liabilities as I download transactions.

[audreyh1]

Quote:

Originally Posted by Scratchy I have a google finance sheet which updates automatically from ticker symbols and calculates: Net worth: Assets including zillow value of home (I have no liabilities).

Don’t you use credit cards?

[Floridaman10]

I track NW in Quicken going back to ‘87. Very fun to watch it go up, down-not so much. I track All assets minus liabilities. Except SS. I have a lot of equity appreciation that will be taxed one day in both tax deferred and taxable accounts. I wonder if I am fooling myself because the tax bite will be large.

Just make sure for comparisons that you are using the same definitions.

[DrRoy]

Quote:

Net worth is the household assets (and liabilities) - including the house. Net Investible Assets is what I use for financial planning.

+1. I do take interest in where we stack up compared to those of similar age in the US, but that is not relevant to how I manage or use the $.

[ShokWaveRider]

I use what Quicken tells me, but basically it is...………..

The Value of crap you own +cash Minus the value of crap you owe.

Seriously we do not include cars, furniture, art, antiques, jewelry etc., or anyTHINGs that we own other than our home. I think it has to be stuff that can easily be liquidated. A home is one thing that sometimes defies that rule. Also people sometimes think their home is worth more than it really is, (Guilty here too) as it is worth more to them.

[donheff]

Quote:

Originally Posted by pb4uski I don't really use net worth for much of anything other than making myself feel good. I include all assets and liabilities, including home value... but not the imputed value of my defined benefit pension or social security... and not deferred income taxes on tax-deferred assets even though I know that technically* deferred income taxes should be included. * like if I was doing a personal financial statement for a bank or other creditor.

+1 I do exactly this and for the same reason.

[steelyman]

Quote:

Originally Posted by pb4uski I don't really use net worth for much of anything other than making myself feel good.

I’m the same way. Although I do remember, back in the first half of 2009, generating (with Quicken) a cost basis vs current value graph for my retirement portfolio, all in IRA/403(b)/457 accounts. I guess “under water” might be a way to describe it. That didn’t make me feel good a-tall.

Fortunately, that didn’t last!

[mrfeh]

Holy smokes...yet another thread about the definition of net worth.

[ERD50]

Quote:

Originally Posted by NW-Bound >>> 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 my definition of "my peers" is "anyone with the same net worth as I have", the question answers itself!

-ERD50

[gwraigty]

Quote:

Originally Posted by jazz4cash Not me. Living in HCOL area, home value becomes a disproportionate chunk that you can’t spend and can’t eat.

I don't live in a HCOL area, but I agree that our residence shouldn't be included in our calculations to determine our overall financial situation. Every month I update a spreadsheet with our account balances, YTD investment income, and estimated investment income over the next 12 months, all taken from the monthly statements. I have some of that info linked to another spreadsheet that includes YTD deposits from DH's net pay and YTD spending (not categorized). I can see at a glance our aggregate financial picture.