Networth Calculation Mistake

[Texas Proud]

I hope you did it yesterday! The market surged, and like some others I hit another all time high net worth yesterday.

Since nothing happened when I said "Wheee!!" about a month ago, I guess there is no point in repeating that particular exclamation of joy, but gosh, it sure looks beautiful.

Whew, I was wondering why it was down today, but now I have the explanation.

You're right though, every time it slips above the previous high, it goes down the very next day. (or it seems that way)

I hadn't, but I did just now. Wheeee!!! I was higher back at the height of the dotcom boom but this is the highest since the bust.

I hope you guys and gals know that on a roller coaster you are saying WHEE as it plunges down the steepest hill.... nobody is saying WHEE on the slow clankty clank on the way up....

 

[RunningBum]

We're not on a roller coaster, we're on a rocket, and hope to escape the pull of gravity!

 

[Katsmeow]

I log into Vanguard (where we have IRA and taxable account) every business day. I log into Fidelity (where my 401(k) is about once a week or so). I long into our bank at least every other day. I display net worth info in YNAB and update investment account balances once a week.

As far as making mistakes, I recently made one on Firecalc that was significant. I mainly run retirement calculations and projections in Firecalc and in the Fidelity planner (occasionally I will check others). Right now, DH is retired and I am semi-retired but still working. We are paying our income taxes this year from my earnings so I just use my net income after taxes in doing Firecalc for this year. Looking ahead after the next 3 or 4 years our projected taxes each year will be negligible so I don't have to do much to include them in Firecalc.

However, for the next few years we will have higher expenses since we are still supporting and educating a couple of kids. During those few years if I quit work we would be withdrawing from the IRA and so would have higher taxes than we will have in the future. High enough that they need to be accounted for in spending on Firecalc (but not in the Fidelity planner). Well, I hadn't been accounting for taxes since until now I have been accounting for them by using my compensation net of taxes. However, I have been modeling me fully retiring. I failed to include the taxes for the next 3 years which meant about a $10-12k difference in spending for 2014-2016.

Thankfully, because I run Firecalc several times usually I realized my mistake and was able to run it correctly. Had I been the type to just run Firecalc once and call it good then that would have been a bad mistake. As it was, my tendency to run it multiple times gave me enough feedback and time to realize I had left out the taxes.

 

[ERhoosier]

Been using Quicken (Mac version) for yrs & have noticed the periodic odd quirk. Like a funny calc or entry that doesn't make sense. But then most online reviews have noted similar issues. (Never have been able to get Quicken to handle stock splits or spin-offs right). Bottom line is DW & I NEVER take the "word" of Quicken as absolute financial 'truth', but always do serious AA's/rebalancings using individual acct stmts from our banks/brokers/etc.

 

[Lisa99]

I also use Quicken and have transactions auto-downloaded as well, but I periodically look at our online statements and make sure they match to the penny with what Quicken says we have in our accounts.

 

[heeyy_joe]

No worries. Repeat the mistake? If so, then contact a money manager.

 

[JoeWras]

I am not sure what you mean by "automatic download", but I use downloads in Quicken daily and when transactions were downloaded I have no choice but to review them and either accept to reject. So I guess it's nice to discover "new" money, but I'd be nervous about what other mistakes I may have in calculating my NW.

I see. I need to try this. I've been entering stuff into quicken since 1995. There was a time I entered stock prices in manually. I got in the habit of doing it all manually. When on-line accounts came online, I didn't add them to the update list. I have to try it. That's what I mean by "automatic downloads." Downloads of your accounts, not the software.

Vanguard lets you track outside accounts too, and tells you when it was last updated (default is daily) but I still log into those accounts directly as well.

This is where I discovered it. I was adding outsides stuff to Vanguard to let it do the AA calculations. So, now we have a separate source for the calculation, and at least the Vanguard part is correct and automatic. It is our largest portion.

 

[brewer12345]

I keep track of everything on an excel sheet which I update errartically (sometimes daily, sometimes not for a month at a time). Since it is all manual. I make a point of auditing the sheet vs. the contents of each investing account at least once a year. I did it about a month ago and discovered that my sheet was missing 1000 shares of AXL. Not a huge amount, but nice to find some money I did not know I had in the virtual couch cushions.

 

[Chuckanut]

This is where I discovered it. I was adding outsides stuff to Vanguard to let it do the AA calculations. So, now we have a separate source for the calculation, and at least the Vanguard part is correct and automatic. It is our largest portion.

Where does one find this ability? On the Vanguard website?

 

[JoeWras]

Where does one find this ability? On the Vanguard website?

Yes. It is nice. Say you have FBALX (Fidelity Balanced) in another account. You can add it to your overall view. Then you can go to portfolio view and it splits out the equities and bonds by percentage, knowing this information from the published details.

To add it to your view go to:
- Account Balances
--- Balances and Holdings
----- Current Balances

Under that, you can hit "Add Accounts" to the section at the bottom titled "Outside investments - Accounts that you've added".

And go from there. After you add your shares, you can view them later various ways to include them or not.

 

[audreyh1]

I guess this has me thinking of a few things, including whether we should have some data downloaded via quicken.

Another bonus (besides the extra money) is the DW is getting more engaged in this process. I've intentionally tried to let her do some of the stuff she owns, to keep her interest. When she saw this last night, her eyes popped out of her head, and I think she's feeling better about an ER exit strategy, and is going to pay more attention to these matters.

I reconcile my Quicken accounts with my monthly Fidelity statements. That way I find discrepancies in a timely manner.

I also download my transactions.

 

[pb4uski]

I reconcile share counts from vendor statements to Quicken quarterly. If you had done that you wouldn't have had that pleasant surprise.

 

[Amethyst]

Keep whee-wheeing, folks! I am not yet retired, and I want stocks to be cheaper!

Amethyst

I hadn't, but I did just now. Wheeee!!! I was higher back at the height of the dotcom boom but this is the highest since the bust.

 

[photoguy]

So, who do you have to "audit" your situation?

I just do it myself by comparing the summary totals on Vanguard / Fidelity against my spreadsheet. It annoys me to no end when things are off by a penny.

You have to wait until all the prices are updated though, and some accounts (like 401k) usually update later in the day.

 

[obgyn65]

To the OP : please don't be too harsh on yourself. All of us have made mistakes. I would move on.

 

[JoeWras]

To the OP : please don't be too harsh on yourself. All of us have made mistakes. I would move on.

OBgyn: I'm fine.

The "admonition" comment was also a bit in fun.

I'm just sharing to wake people up to the fact that it can happen. As an engineer, I hate being off by even a penny (see photoguy above). I deal in nanoseconds in my job. 1 second is eternity. So, as you can see, I'm used to precision.

In any case, good discussion here and that's what I was hoping for.

 

[45th Birthday]

I use Quicken for investments and also spending, but I do not download anything except credit card statements using QIF files. Every month, I balance Quicken to the statements I receive from various financial institutions, manually entering investment transactions. Entering manually takes more time, but it forces me to see the details I might overlook if I downloaded them. I essentially use Quicken as a database so that I can run custom reports to use for planning.

I also keep a spreadsheet with all positions consolidated in one line (for example, we might own one ETF in several different accounts at a couple of places), and update the prices weekly and then keep the history. I use this to track asset allocation among other things. It is a bit tricky to make sure the total number of shares is correct, but I check this every few months.

I also have a spreadsheet that is essentially an annual income and expense budget. Quarterly, I do another spreadsheet comparing actual to budget and showing the reasons for the major variances. I show this to my wife so she can see where things stand, as she is otherwise not involved in managing the family finances.

 

[sengsational]

I hope you guys and gals know that on a roller coaster you are saying WHEE as it plunges down the steepest hill.... nobody is saying WHEE on the slow clankty clank on the way up....

I just do it myself by comparing the summary totals on Vanguard / Fidelity against my spreadsheet. It annoys me to no end when things are off by a penny.

Monthly, I do the excel net worth sheet (converted from a Lotus 1-2-3 sheet, hehe). That's the complicated sheet that shows the IRR's of each account. But it only displays dollars (not to the penny, that would drive me nuts). I also have a net worth "snap shot" program that I coded up for myself...it goes out to all of my financial web sites, grabs the data, and puts it in a spreadsheet, so I can get "today's net worth". Since I've written the program (6 months ago or so), I think I've only run it about 3 times, when I thought I might need to do some asset allocation rebalancing.

 

[audreyh1]

I hope you did it yesterday! The market surged, and like some others I hit another all time high net worth yesterday.

Since nothing happened when I said "Wheee!!" about a month ago, I guess there is no point in repeating that particular exclamation of joy, but gosh, it sure looks beautiful.

Second time was the charm, W2R!

You even made gold crash with your double wheee.

 

[cinman2000]

I use Quicken for investments and also spending, but I do not download anything except credit card statements using QIF files. Every month, I balance Quicken to the statements I receive from various financial institutions, manually entering investment transactions. Entering manually takes more time, but it forces me to see the details I might overlook if I downloaded them. I essentially use Quicken as a database so that I can run custom reports to use for planning.

I also keep a spreadsheet with all positions consolidated in one line (for example, we might own one ETF in several different accounts at a couple of places), and update the prices weekly and then keep the history. I use this to track asset allocation among other things. It is a bit tricky to make sure the total number of shares is correct, but I check this every few months.

I also have a spreadsheet that is essentially an annual income and expense budget. Quarterly, I do another spreadsheet comparing actual to budget and showing the reasons for the major variances. I show this to my wife so she can see where things stand, as she is otherwise not involved in managing the family finances.

I track this in 3 places to make sure I am not missing anything. Quicken (I download as much as possible), my financial advisor site (100% downloaded) and my 100% manual spreadsheet (updated once a month). As long as these three are within about 1%, I don't sweat it.

 

[seraphim]

I use Morningstar portfolio manager for daily checks. Have an Excel spreadsheet for budgeting. I look everyday just to keep an eye on what's happening, and why.

 

[freebird5825]

I guess I'm a slacker, I review our holdings (net worth spreadsheet) quarterly...

Make that 2 slackers.

I maintain a record of my portfolio using the portfolio tracker tool at Morningstar. I update the shares owned data quarterly.

Now that I have everything under one roof at VG, I will check my account a little more frequently to see if some of my TE bond mutual funds have reached their target principal amounts before I turn off/redirect my monthly DCA amounts.

 

[calmloki]

Sometimes I envy you pension/IRA/stock & bond holders the surety you have in your numbers.

We use Quicken hard for our finances, but our net worth guesstimate has a bunch of play. Most of our worth is in the rental property values and those numbers vary depending on whether we feel like using the tax man's "true market value" or what we paid for it or what we think we could sell for. Our Quicken reported net worth more than doubled between 2005 and 2006 when we changed valuation numbers. Then there is the knowledge that the tax on a sale will nick us about 25%. I tend toward pessimism on values - the net worth took a nice bump up last winter when we sold a property we had foreclosed on, as I'd been showing it's value as the foreclosure price. The last couple days OTOH, seem to have made some money disappear, although I'm pretty sure the gold is still in the safety deposit box. Ah well. Keep making those rent payments, oh tenants of mine!

 

[Katsmeow]

I don't calculate net worth that often - but then I can really do it in my head as long as I know what I have at Vanguard and Fidelity. However, I long into Vanguard every business day and log into Fidelity a little less often (have my 401k at Fidelity). I do this just to keep a check on everything and make sure all is well.