[The_Number]

I noticed that many of the financial bloggers are showing their net worth and its breakdown on their blogs, and I thought about doing a monthly thread here to motivate us to calculate our net worths. I do feel a little bit like an exhibitionist for doing this, but enough vagueness and net pseudonymity help.

As I said in the intro thread elsewhere, I'm in my late 20s and this is my first year on a "real job." I still have a long way to go to achieve many of my financial goals, but it is a start.

As you can see, my asset is a mix of CAD and USD. Instead of calculating the exchange rate for my USD investment, I simply treated 1 USD = 1 CAD for the purpose of calculating my total net worth (which makes it a conservative estimate.)
_________________________________
April 25, 2009

Net Worth: 28498.76

Assets: $28509.85
Cash (Cash, Chequing Acct, Saving Acct)
CAD: $7976.14
USD: $557.51

Investments
Individual Stocks: USD$1580.36
RRSP: CAD$3870.38
Defined Contribution Plan: CAD$4973.78
TIFSA: CAD$1095.12
Roth IRA: USD$8456.56

Liabilities: $11.09
Credit Card: CAD$11.09
_________________________________

My net worth will probably go down next month because I'm planning to make a major purchase I've been saving money for.

 

[FrugalTrader]

Great idea! Keep up the good work, you may find that the updates will help you towards your goals, I know they do for me!

 

[CJB]

Here's mine. I use Networth IQ to track my progress.

https://www.networthiq.com/people/KrisKross

 

[Ben]

I've never felt the need to be accountable to others in tracking my net worth, but the simple act of tracking it for my own interest is enough motivation to want it to increase. I use a simple spreadsheet.

If the major purpose you speak of is one that could easily be sold in future at a depreciated/appreciated price, then you may be able to claim the equity in the asset toward your net worth. Furniture I would not personally include, but certainly cars, dirtbikes, etc (having a hard time thinking of examples) would be fair game.

 

[FinancialJungle]

Like Ben, I track my net worth in a private Excel spreadsheet, although I never place much emphasis on net worth. Reason is that I'm a buy & hold type of guy, so ultimately my plan is to live off the income and utility of my assets rather than their current market valuation.

For example, imagine 2 brothers. The younger brother, who is 30 today, has an $800k portfolio in S&P500. The older brother, who was 30 at the peak of the Internet bubble, had a $1 million portfolio at the time.

Today, $800k can buy you 9231 SPY shares earning $20,000 of dividend a year. In 2000, $1 million could buy 6666 shares of SPY earning $10,000 of dividend a year.

So, which brother is richer at 30-year old?

The dollar value of my assets is at the mercy of the market, therefore if it's not within my control, it's not worth setting goals on. What is somewhat within my control (short of a market wide dividend cut) is income. As long as I stick to a strict saving regimen, my passive income will grow incrementally each month.

 

[Bullseye]

Furniture I would not personally include, but certainly cars, dirtbikes, etc (having a hard time thinking of examples) would be fair game.

I include a very conservative number for household contents, including furniture. Basically valued at fire sale prices, but it's still a decent enough number to count. I mainly do this because I'm sometimes tempted to sell everything, pack up the family, and travel the world again for the long term.

I also include depreciating assets like vehicles, at conservative current market value. In my net worth projections, I reduce the values, of course.

 

[CanadianCapitalist]

I used to track net worth fairly regularly but not anymore. The reason is that it was easy to see how savings were driving net worth increases but we're at a stage now where a bad year in the market can "wipe out" many years of savings. Still, I track net worth once a year taking conservative values for home and auto.

 

[steve41]

Instead of tracking your net worth, why not track something eminently more useful.... your BQ (beer quotient)?

This number has much more significance to your financial health because it relates to how you live&enjoy your life. (BQ is a euphemism for discretionary spending... the amount we get to spend on groceries, beer, travel/gas, clothes, entertainment)

Every year or so, you take stock....

-"my job grosses $x.... do I see it continuing to a certain age?"
-"my portfolio is worth $y (include loans as well)"
-"what is a reasonabLe estimate of rates going forward?"
-"do I have an expectation of a future windfall or capital gain?"

The above simple factors will deliver you your BQ... that magic number which tells you what you should budget going forward such that your lifestyle will take you out to some optimum age (95, say) at which point your capital will just run out.

If you are living beyond your BQ, you may end up sucking air at 75, or if you are living far below your BQ, your rotten kids will inherit a gazillion bucks.

Tracking and adjusting your BQ (adhering to a spending&saving budget) is infinitely more useful an exercise than tracking your net worth.

 

[Rickson9]

Grats The Number! A great looking net worth statement!

 

[moneygardener]

Great post Financial Jungle, and it is great to see you around again!

I track net worth on my blog but I've decided to concentrate more on ratios and movements rather than the hard value. I also like to emphasize income from investments over portfolio value. As CC and FJ have alluded to, once a long term investor builds up significant portfolio net worth tends to move in tandem with the market. Savings and income become less influential. That being said it is not enought of a driver to de-motivate me from saving and paying down debt. We'll all be affected by the market and it is out of our control. Part of tracking net worth is pure enjoyment for me rather than a measuring stick. One has to take some of the fluctuations with a grain of salt with a view to the long term.

 

[DrStan]

Great post Financial Jungle, and it is great to see you around again!

I track net worth on my blog but I've decided to concentrate more on ratios and movements rather than the hard value. I also like to emphasize income from investments over portfolio value. As CC and FJ have alluded to, once a long term investor builds up significant portfolio net worth tends to move in tandem with the market. Savings and income become less influential. That being said it is not enought of a driver to de-motivate me from saving and paying down debt. We'll all be affected by the market and it is out of our control. Part of tracking net worth is pure enjoyment for me rather than a measuring stick. One has to take some of the fluctuations with a grain of salt with a view to the long term.

Agreed. Income from investments is very important. My wife and I have spent the last 6 years paying off our house, which means that most of our net worth is tied up in it (about 75% of our net worth, in fact). We are now diversifying into equity investments to build up passive income from dividends.

I'm interested in how much our investments can provide as income, because that is less work we will have to do in the future. It currently stands at $1700 in annual dividends. I think that number is more important than the actual "net worth". Our pensions will provide good cashflow in retirement, so that's not a huge concern.

Roughly, saving $1000 will provide $50 lifetime income at 5% return. We hope to increase our passive income by $1,000 every year, which requires $20K in annual savings (10K in the TFSA and the rest split between RRSP and non-registered). That's the real number we care about!

 

[Ben]

When our investments get so large that a good/bad month on the market is several times our monthly savings rate, then I can definitely see how tracking net worth monthly would lose its value to me. Like CC said, right now it really is about seeing how our savings are driving the net worth. Once the market begins to drive net worth, the sense of personal accomplishment will be lost, and likely, the desire to track net worth monthly.

Also becoming interested in the concept of how investments can provide income and gradually replace/supplement employment income. Powerful principle, especially with the view to reach financial independence in our 50's and bridge the time before CPP/OAS kick in (which will probably have an age eligibility of 70 by the time I reach that point).

 

[The_Number]

Thanks for the replies. And especially thank you, CJB, for sharing your networth. Anyone else who is willing to share your networth with the group?

@ Ben: I also have intrinsic motivation for tracking my networth (I have been for more than a year). I started the thread because I thought it would be a nice little "community" event.

@ Jungle & Bullseye: When I do mine for myself, I started the habit of adding $500 for personal belongings (of course, I can probably get more if I sell them all). But I excluded it from my original post because the market value of such items are difficult to determine. Also for depreciating assets, I know that IRS has the Internal Revenue Code that makes a conservative estimate on depreciation. Isn't there something similar in Canada?

 

[moneygardener]

In November of 2007 MoneySense magazine ran an article that pulled Stats Canada net worth numbers.

http://themoneygardener.com/2007/11/are-we-rich-yet.html

If you are under 35 years old to be in the 'weathiest 20%' of Canadians you needed a net worth over $89,700. I'm not sure if they mentioned whether this was household net worth or individual, however I always assumed it was household.

 

[Ben]

The Number: Full credit to you for posting your net worth. Indeed, it does make for a nice "community event".

There are too many readers on this forum who know my true identity for me to divulge my net worth. I'm a little sensitive about those who know me knowing my financial asset picture, and I suspect I'm not alone. There are precious few people who will openly disclose their salary to those they know (especially not those they work with), and fewer still willing to discuss their net worth in public.

Money remains a sensitive subject for many people in our society, for socially complicated reasons.

 

[mfd]

I track it on my blog but here is March. Like others have mention I'm sure April will see a significant increase because of the upswing in the market :

 

[michika]

mfd, how do you calculate the % of change, is it from month to month?

 

[mfd]

mfd, how do you calculate the % of change, is it from month to month?

right now its just month to month. At the end of the year I'll do a full year check

 

[FrugalTrader]

I track it on my blog but here is March. Like others have mention I'm sure April will see a significant increase because of the upswing in the market :

Great looking net worth statement MFD!

 

[mfd]

Thanks FT.