Tracking Net Worth and Compound Interest Calculating

[NW-Bound]

I do remember why I started to log the daily total value of my investable accounts - after-tax as well as 401ks.

I was a founding member of a couple of tech startups in the early 90s, and quit megacorp to work full-time at one in the mid 90. We were making money at first, and were able to pay ourselves a salary. By the late 90s, both start ups were in trouble, and I started to work with no pay, hoping to revive our business. It was a very dark time.

I now had the time, and the motivation, to open up all the account statements that piled up unread for many years. And the 90s being a hot period for the market, I discovered that my total was a 7 figure. Dang!

That really eased my financial worry. At least, if I had to go find work again, I could afford some time to shop around, and not have to beg for anything that I could find. I ended up doing part-time contracting work, and never a full-time job again, until I quit for real.

I just looked up the inflation from 2000 till now. It's about 1.6x, so in the money was worth a lot more back then. And I was far from an active investor back then. In fact, I was quite conservative, and kept 50% in fixed income. Good thing fixed income was also doing OK then, due to the falling interest rate. Still, I could have a lot more by doing 100% equity.

And also that was when I decided to learn more about investing. None of this thing about looking at your statements once a year. It's for people who cannot stay in the kitchen, the faint of heart. Me, I am like these Chinese cooks handling a flaming wok. I can take the heat.

PS. I did not dive in headfirst though. Slowly, slowly. You don't want to singe your eyebrows.

Even then, there were lessons that one only learned with time, by doing. And I am still learning.

 

[audreyh1]

It’s in my Quicken data, but is such a tiny percentage of our net worth and changes so little, I don’t worry about it.

To expand:

The house was in Quicken since the early 90s and I used it to track the mortgage payments and principal.

When I paid off the loan in the late 90s, I zeroed out the loan in Quicken and the principal remained.

Then mid 2000s we sold our home and moved into a motorhome for full time travel. The house proceeds were then transferred to a “House Fund” account to be invested for whenever we were ready to rebuy a house.

In 2010 when we bought a new house that fund was emptied and a new account created in Quicken for the property based on annual county property tax appraisal.

 

[Ian S]

SigFig makes it easy to track your investments and you can create manual accounts for other things that add to net worth. The nice thing about SigFig is, with one click, you can download a CSV file to produce a spreadsheet of all your investments. I've been doing that on a weekly basis since January, 2016.

I originally started to keep track of my net worth using a DOS program in the 1980's called "Managing Your Money." In those days, there was a lot of manual entry of prices and so forth. After a couple of Windows versions, the program was discontinued in the late 1990's. I still have the DOS files from around 1999 when I stopped using it. At least in Windows 7, you could still run the program in a DOS shell. Perhaps it's time to try it in Windows 10!

 

[tulak]

In 2010 when we bought a new house that fund was emptied and a new account created in Quicken for the property based on annual county property tax appraisal.

That’s what I use to track my house value, at least for the old house. For the new house, I used the purchase price and will switch to the tax assessed value once it exceeds the purchase price.

I’ve always tracked my investment portfolio regularly. I use a spreadsheet for the portfolio.

I can also view the portfolio in Moneydance, using custom python scripts, but the spreadsheet is easier for modeling and has a lot more details.

I’ve always had a visible net worth calculation from Moneydance/Quicken, but it’s only mildly interesting. I’m more interested in the portfolio balance, since that’s what I’ll need to live off of.

I recently started tracking my numbers quarterly in a spreadsheet. I’ve (finally) come up with a plan towards retirement and want to know if it’s on target. For this, I track both portfolio balance, broken out per account type (tax deferred, taxable, tax sheltered), along with net worth.

 

[sengsational]

I originally started to keep track of my net worth using a DOS program in the 1980's called "Managing Your Money."

I still use it, but not for net worth...just for expense tracking. My investment account totals (not individual positions) are in there (manually typed-in monthly or quarterly from the statement). For non-MYM'ers, the net worth section of MYM pulls from assets, including physical assets, and liabilities. So that net worth includes cars, house etc (not just liquid net worth, like I do with the web scraper).

 

[jkern]

I estimate my NW periodically for fun. It's not a number I use for expenses or cash flow. It would only come into play after my death to calculate any taxes due.

Since my NW number is just for fun, I don't worry about being precise. I add in the approximate value of my house plus rental properties. I also add a placeholder value for all personal property like cars, jewelry, furnishings, art etc. of $100K. I'm sure if I were to liquidate everything I would get less than $100K, but it really doesn't matter.

 

[RockyMtn]

Another Quicken user. Started with MS Money in mid 80's. I actually preferred it but when Microsoft dropped the product I went over to Quicken. Nice to have everything automated and update automatically with the push of a button.

 

[FLJim]

Net Worth

Have been keeping track of Net Worth since about 1975 (pen and paper) and with Quicken since it was available in the early DOS version (!). Not keeping track of NW is like playing golf and not recording your score on each hole and totaling up all 18. I carry 2 paid-for houses at acquisition cost (why I don't know, but seems the conservative way to go), don't account for 3 paid-for vehicles, and don't count any personal property like HHG. Knowing NW helped me decide to retire 10 years ago at 62. Not knowing NW would be like a car with no odometer and no speedometer. Quicken makes it easy to keep a close eye on multiple accounts.

 

[NW-Bound]

I have no spreadsheets. Everything I need is in Quicken. I use it to "count my money", as well as to track expenses after the fact. I do not include home values in Quicken.

Outside of Quicken, I only have a diary where I record the total daily value that Quicken shows at the bottom left of the screen. That also includes all banking accounts, and outstanding credit card spending.

The reason for the diary is that I can scroll through it to see how much I had in the past, the high/low of each year, etc... I can set the date in Quicken to some time in the past to see how much I had on that date, but this is not the same as scanning through a file to see the "bigger picture".

In that diary file, I also include some notes which help me recall events that drove the market nuts. For example, I recorded all the Wheeee proclamations in that file.

Just joking...

 

[ownyourfuture]

I track Net worth (not counting tax due on IRA withdrawals) once per year.

I even graph it so that I can see a pretty picture, of course that dip after 2014 was not a pretty part

I do something similar. Thought I was the only one
I can only figure out how to put in 5 bar charts (years)

 

[rk911]

...Do you add the value of the house to your net worth? It looks like some of us here are doing that, but I'm only adding what we've paid for...

we do. NW = assets minus debt.

 

[WWDog]

I started my first net worth spread sheet when I retired from the Air Force so I could see when I could really retire. Over time I have added several features. It started out as a single sheet and expanded to several supporting sheets which link back to the main sheet. I use it to calculate quarterly tax payments, net worth, life insurance totals, taxable and non taxable totals, values in various insurance accounts. I used to keep track of how much I spent in various categories and projected ahead for several years but found that to be too tedious. The most useful is the goal seek in excel which I use to determine quarterly tax payments. I used to use quicken but dropped it when it required me to go on line to start up the program. Everything is done off line and the computer is rebooted after I save the files off line.

 

[racy]

...Do you add the value of the house to your net worth? It looks like some of us here are doing that, but I'm only adding what we've paid for...

Yes, the only asset I use in our net worth, and only what it cost to build it. A true NW calculation seems like a lot of work (and meaningless to me).

 

[latexman]

On the FIRE/SIRE spectrum I'm about 23%/77%. While I did focus on my investments, I have never really measured and analysed NW, other than a mental estimate snap shot.

 

[novaman]

Yet another vote for Quicken. I started tracking everything in 1989, the first year I started working. I would say that the detailed tracking was a key component in helping me get to FI and ER.

Everything goes into Quicken, and I use the one step update feature to update my entire investment portfolio nearly every day. The planning tools are great for giving you a basic idea of how your retirement would play out given various scenarios that you can change.

 

[NW-Bound]

Do you add the value of the house to your net worth? It looks like some of us here are doing that, but I'm only adding what we've paid for...

This thing about how to look at RE comes up often on this forum over the years. Strictly speaking, of course RE is counted in one's net worth. Still, many people do not pay attention to theirs, because they do not use or need the info in the management of their finance.

I don't bother to put the value of my homes in Quicken, even though together they add up to a 7 figure, and I do not have a mortgage. It's because I am an active stock investor, and need to know how I am doing with my investable accounts. I do not actively manage RE like people with rental properties. Having my home values in Quicken simply distracts me from the up/down movements of the other assets that I need to be aware of.

 

[teetee]

I have Google sheet for tracking my net worth. Nothing is automated because I like the feeling of logging into each bank/retirement account to check the individual performance / investment returns and any potential mistakes.

 

[BlueberryPie]

Regarding adding the value of your assets (usually mostly house), I track two numbers:

Actual Net Worth which is everything you own - everything you owe, so add house, substract mortgage. Possibly add car substract car loans, or boats or any larger assets, but also all bank accounts minus outstanding balance on credit cards (even if you pay monthly)

And "investement portfolio" which to me is any 401(k), IRA, Brokerage account, Govt Bonds, and long-term cash (I do count my ER in that number, but it has to stay in cash-like instruments. currently liquid iBonds). I don't count my current checking account or bother with any current balance on credit cards

As either NW or Protfolio increase, small bank accounts and current credit card balance and even cars, etc... can become such as small difference that they can easily be ignored

 

[scrinch]

I've kept a quarterly networth spreadsheet since 1994. I include my estimate of current real estate values, including our home, but ignore the future tax liabilities of pre-tax retirement accounts. As IRA balances compound, that is becoming a non-negligible issue. I've added various calculators and modeling tools over the years when they were needed also. Initially the spreadsheet was a motivator for saving and investing. Then it was a tool for deciding when I could retire. Now it's just a scorecard and way to periodically check that nothing funny is happening in any of our accounts.

 

[BubbaChris]

Calculating Net Worth started for me as a sanity check while owning our first couple of homes in California. Those mortgages were so big and for so long, it created a mental discomfort for me. So I often wanted to put bonuses towards paying down our principal (my first mortgages was at 11.25% in 1986). So doing a NW calculation every couple of years was a tool to validate that we were on the right track.

Once time, savings, and appreciation gathered enough momentum and we out-paced our debts, the cycle became a virtuous one. Still a part of me never got fully comfortable with having $200+K balances on those mortgages.

The other piece I never fully believed were the balances in IRAs and 401ks since they were tax deferred and, until recently, inaccessible without additional penalties. Now that we've passed the age threshold, I know it's (mostly all) mine if I take from the the accounts at the right pace.

Real Estate NW never felt very tangible until we moved out of California. 17 years of payments and appreciation on that house meant we could pay cash in Utah, be debt-free, and still put a sizeable chunk into our investment accounts.

I still do NW calculations regularly, primarily focused on our investment accounts. I still include the value of our home, vehicles, and RV to have a true total.

Best regards,
Chris

 

[NW-Bound]

Regarding adding the value of your assets (usually mostly house), I track two numbers:

Actual Net Worth which is everything you own - everything you owe, so add house, substract mortgage. Possibly add car substract car loans, or boats or any larger assets, but also all bank accounts minus outstanding balance on credit cards (even if you pay monthly)

And "investement portfolio" which to me is any 401(k), IRA, Brokerage account, Govt Bonds, and long-term cash (I do count my ER in that number, but it has to stay in cash-like instruments. currently liquid iBonds). I don't count my current checking account or bother with any current balance on credit cards

As either NW or Protfolio increase, small bank accounts and current credit card balance and even cars, etc... can become such as small difference that they can easily be ignored

Prior to using Quicken, I used MS Money to track investable accounts for many years, but never bothered to set up my banking and credit card accounts. I only started that when I switched to Quicken when MS Money was discontinued by MS.

Then, I discovered what I was missing all those years. Now, for doing very little extra work, I can look up anything that I need to know. How much did I pay for umbrella insurance? What is the total cost of my DIY solar+battery storage system, and how much did it reduce my electric bills? How much did we pay for travel in 2018? All these information is available to me, with just a few clicks. No need for any spreadsheet.

My WR is low at less than 1%, but I still want to keep track of expenses after-the-fact. If there's any fraudulent charge on any of my accounts, I should be able to spot it without too much delay.

 

[BlueberryPie]

as long as you feel comfortable with having fintech magic accessing all your accounts, I highly recommend the free Personal Capital tools.

I will automatically show NW, portfolio, and all kinds of other stuff

In addition to general amount you can dig into all kind of ways to slice how you look at your investment, eg, Asset Allocation, then drill into how your bonds are allocated and which ones of your ETFs hold what, etc...

If you do you must run their "fee analysis" tool as it will automatically show you what each of your funds/ETFS fee is. Their Retirement Planner is similar to what FireCalc does but not as good I think.

(those are pics from Google, not my accounts )

 

[Ian S]

as long as you feel comfortable with having fintech magic accessing all your accounts, I highly recommend the free Personal Capital tools.

I guess the drawback Personal Capital has is there's no way I can find to download all your data in a spreadsheet friendly form. That's why I use Sigfig instead although I do check things on P.C. occasionally.

 

[BlueberryPie]

I only tried SigFig briefly, maybe I can revisit it, but at the time it was only able to import portfolios from the major brokerage firms (Fidelity, Vanguard...) and was not able to import my 410(k) data, my HSA data (used as an investment vehicle), and of course not the credit card or loan since it is a portfolio tool, not a net worth tool.

 

[BlueberryPie]

I went back to take a look at SigFig and it still has the same limitations as far as being able to import my 401(k). I do see the ability to download a CSV for computer import, it would be nice to have than on Personal Capital.

I tried their "retirement" tool and hated it:
- its "we estimate you'll need $XXX in retirement" is $150% what I think I will need which is already quite generous (slightly higher than what I spend while working and still paying a mortgage).
- is says Social Security should provide around $1300 because it states the US average rather than some even simple ballpark for what the SSA says I should get
- it doesn't even asj you when you want to retire, assumes 67
- only concludes that you "may" get there with your current portfolio, but that they can get you to $1500/mo higher if you sign up with them.


This guarantees I will never sign up with them as an advisor, too many red flags

Edit: you can edit the assumptions for retirment after their initial estimates, but their starting point is still ridiculous