Net worth change since 1-1-2012, the real question !

[iam21177]

Hot diggity! Our retirement value went up 41% in one year (DINKS, 36 and 34).

I don't know what the mortgage value was a year ago, but the value probably stayed the same, so whatever we paid on the principle can be added to that net worth.

 

[obgyn65]

Didn't we discuss this a few weeks ago already ? I forgot what I answered then but I am still not sure how to calculate my NW. Anyway, since I am mostly in CDs, munis and cash, I guess in my case it is about 3%-4% without addition. Additions have been in the $100k-200k range after tax I guess.

Who cares about the complexity of your portfolio or your returns for 2012 ! The real question is, how much did your net worth change from 1-1-2012 to 12-31-2012 ?


??

 

[obgyn65]

I also have to agree with others here. I don't really care about my NW. It's all being happy living the life I want with the cash flow I need when I finally FIRE.

 

[Nords]

Wow, guys, it's amazing that this thread is still open.

I'm not surprised to see 334 different ways of calculating net worth, each one the only one true path to happiness.

So I sat down with a cup of coffee, analyzed each one of the various methods, and applied them to our portfolio.

I realized that we donated to charity in 2011, which meant that we had more than we needed.

I realized that we donated to charity in 2012, too, which meant that we still had more than we needed.

That concludes my calculations of our net worth. See you next year. Ooh, look, there's surf on the North Shore!

I couldn't agree more. We are so lucky that we retired just after the 2008 crash. I expect we'll see similar in the future but. Each year that passes with net worth increasing increases the confidence that the financial part of retirement is going to work out just peachy.

That's pretty much how we were on 1 June 2002...

 

[veremchuka]

I only read to page 3 so this may have been said already. I would not count my house which is paid off in my net worth. Yes it's part of the total but until it is sold it really is not accessible nor do I really know it's actual value. You wouldn't (or shouldn't) count SS or pension payments for the same reason as they are all part of future assets.

 

[frayne]

I only read to page 3 so this may have been said already. I would not count my house which is paid off in my net worth. Yes it's part of the total but until it is sold it really is not accessible nor do I really know it's actual value. You wouldn't (or shouldn't) count SS or pension payments for the same reason as they are all part of future assets.

Agree 100%.

 

[JoeWras]

Up 14%, but that includes significant new savings. We are at about 40% stocks, aiming for 50% AA. Much of our money from prior to 5 years ago or so are in VERY conservative investments. I did it all totally backwards

Almost exactly the same results and situation for me.

I'm doing sets of "dollar value averaging" investments into equities starting last fall to get my AA a bit more aggressive. This will continue for about 2 years. The conservative allocation snuck up on me due to not paying attention. That won't happen again.

 

[KingB]

I only read to page 3 so this may have been said already. I would not count my house which is paid off in my net worth. Yes it's part of the total but until it is sold it really is not accessible nor do I really know it's actual value. You wouldn't (or shouldn't) count SS or pension payments for the same reason as they are all part of future assets.

This is how I did my calculation.

 

[Bruce]

14.05%

 

[NW-Bound]

Eh, a lot of people claim their net worth is up, but did they account for inflation?

And then, what is this chained CPI that Congress talks about? You've got to compute that way too.

 

[Katsmeow]

I would not count my house which is paid off in my net worth. Yes it's part of the total but until it is sold it really is not accessible nor do I really know it's actual value. You wouldn't (or shouldn't) count SS or pension payments for the same reason as they are all part of future assets.

Of course, your house is part of your net worth. It isn't part of your investment portfolio, I agree.

But you "access" its value to you every day. You don't have to pay rent. You don't have to pay a mortgage. Your overall expenses are lower as a result than if you lived in a similar house that you wasn't a paid off house.

 

[NanoSour]

11.55% increase in NW.

 

[NW-Bound]

Of course, your house is part of your net worth. It isn't part of your investment portfolio, I agree.

But you "access" its value to you every day. You don't have to pay rent. You don't have to pay a mortgage. Your overall expenses are lower as a result than if you lived in a similar house that you wasn't a paid off house.

I think people realize that a house has value as imputed rent. But the truth is if I were to rent my homes, I might not, due to being a scrooge, although my homes are not truly luxurious. I might just boondock in an RV and invest that money (DW permitting of course).

So, when I look at my homes, all I see are bills and my labor for upkeep. And the truth is that I take them for granted. I need to "love" my homes as my brothers and their wives love theirs. In their case, they put so much money into it, I am sure they count that in their net worth, as it would be the major part, I am afraid. Going too far the other way... It's an emotional thing, and people are not always rational.

 

[Meadbh]

Um, no, it's an accounting thing.

Net worth = Assets minus Liabilities.

GAAP (generally accepted accounting principles) counts assets and liabilities on a financial basis. So, for example, your wonderful personality is not an asset on the balance sheet.

Any variation from GAAP is simply a personal view of your finances, viz. what you consider to be an asset. Many people on this forum do not consider their homes to be assets, but that makes all the poll and survey data meaningless, since one cannot compare apples and oranges.

I include my home in my net worth. When doing SWR calculations, the denominator I use is investable assets. My definition of investable assets also excludes investment real estate, because of its lack of liquidity.

 

[REWahoo]

Ten days and 160+ posts later, the net worth/home inclusion debate drags on...and on...

 

[veremchuka]

Of course, your house is part of your net worth. It isn't part of your investment portfolio, I agree.

But you "access" its value to you every day. You don't have to pay rent. You don't have to pay a mortgage. Your overall expenses are lower as a result than if you lived in a similar house that you wasn't a paid off house.

I agree with you but unless you sold your house how can you assess it's increase re your net worth. Maybe I am wrong but I interpreted the thread subject to be portfolio net worth increase. I never include my house in net worth unless I was thinking "if I died today my estate would be worth about $X".

 

[audreyh1]

I include my home in my net worth. When doing SWR calculations, the denominator I use is investable assets. My definition of investable assets also excludes investment real estate, because of its lack of liquidity.

I don't even use all my investable assets when calculating my SWR, but rather a subset of my investable assets that I have earmarked as my "retirement portfolio". The rest of it I can do with whatever I please !

 

[NW-Bound]

GAAP (generally accepted accounting principles) counts assets and liabilities on a financial basis. So, for example, your wonderful personality is not an asset on the balance sheet.

As long as my personality is not a liability, I am happy.

 

[NW-Bound]

OK, so I estimated my home values using Zillow, added those to my Quicken bottom, and had a 26% increase in net worth. I have not found a way to have it permanently listed in Quicken. I am not sure I want to though. For in a bull market, the positive stock change each day, when computed as a percentage gain, is diluted out when I have inert assets in there.

I already hold quite a bit of cash, and at the end of each day, I would have to switch the screen to see the gain of my hand-picked stocks separately from the MFs, and also from the cash which does not move of course. I want to see how the stocks and the MFs do relative to the indices. Cash and RE values do not do anything for me in a bull market. I think I will leave the RE out for now.

I think I will wait until the next bear market to add the RE to remind myself that I am not going to be penniless. It's like during the 2008-2009 when I looked at the portfolio broken down by security types, and was so relieved to see that indeed the cash part really stayed constant and did not drop 2-3% a day like the MFs and stocks.

Funny how one's mind works.

 

[palomalou]

Curiously, our real estate (house and retirement apartment) went up that same 14% (as all the other investments), according to Zillow. There is inflation, but I don't think 14%!

 

[NW-Bound]

Our RE market tanked badly in 2008-2009, so I guess the value has recovered some last year. I do not know for sure as I do not track it. It is still only about 60% of that top value.

Well, somehow I do not trust RE value as being "real" because of the past RE bubble. Yet, the stock market valuation could also be ethereal. So why do I care more about the portfolio?

I think it's simply because of the liquidity of equities compared to RE, and the idea that I can easily capture that peak value with a few mouse clicks. Of course I was just fooling myself that I could time the top of the market. Still, that illusion lingers.

 

[W2R]

Ten days and 160+ posts later, the net worth/home inclusion debate drags on...and on...

+1 What it all comes down to, as I see it, is what purpose is intended for the calculation. When that is unclear, it seems that as a group we tend to get lost in definitions and semantics.

 

[NW-Bound]

Eh, I have tried to draw people to travel and food threads, but not everybody is interested. So, I have to come here to BS.

 

[ItDontMeanAThing]

This was easy, as it is every year since ER. No house, no pension, no SS, no other income and my tangible assets might be worth $500 on a good day. Drawing down my taxable accounts. Total of taxable and tax deferred down 0.02% for the year. I gave that a semi-enthusiastic 'Whoo hoo'.

 

[MDJO]

20% increase in 2012. Still working and saving. Investment performance was more like 9%. A great year in retrospect.