I have to say it feels really good getting all this stuff out there. I’ve always known I had money saved in different places here and there, but up to 3 months ago I had never put it all together and focused on any type of real “net worth”.
I suggest conjuring one up yourself if you haven’t already, it’s quite empowering!
So, now that i’m done patting myself on the back (you have to right?), here it is – my official net worth as of the end of January. I’m sure my format and calculations will change over time, but as it stands today this a great measurement of my overall financial picture. Daddy’s proud, daddy’s proud.
Now that I have it organized, I am ready to begin this year’s net worth goal – to reach $100,000 by the end of December! I can’t believe i’m actually setting something so high (cuz my GOODNESS that’s a lot of money), but you know what? Sometimes you gotta just do it like Nike. I mean I’m young, nubile, and by golly it’s time to make something of myself! haha… W-O-W, talk about some motivation.
Moving along, here’s what we got:
Cash Savings: I’m hoping to add an additional $1,530.97 to reach my goal $5,250. Once this is accomplished, I will leave it alone 100% as it will act as my Emergency Fund.
Roth IRA: As of today, I am not planning on adding any more funds to this *unless* I end up with extra money after my cash savings goal. In this case, I would def. add it into my Roth.
401k: My favorite category of all time :) What’s not to love about company matches, direct deposits, and tax benefits? If all goes as planned, this will be my 3rd year of maxing out my 401k! I have been more than blessed w/ generous company matches, so it would be absolutely asinine not to participate. I expect this category to go up at least $2,375 each month, markets willing.
If there was just one piece of financial advise I would give anyone, it would be to put in AT LEAST (very important) the same % as your company matches. This means from the start you are D-O-U-B-L-I-N-G your return from day 1. Now, i’m not a financial pro or CPA by any means, but with the good graces of the stock market, this $ should increase fruitfully until the day comes for retirement. Of course if you could add in more each paycheck, more power to you.
Condo Investment: I am helping my brother out with a personal loan, which will help him with his new condo purchase. I give him $123 a month, and the interest is locked at 5%. Either of us can bail out at any time if needed, and it’s written in a simple contract just in case (this was forced by my dad, and I’m thinking rightfully so). Initially I thought of loaning the money interest-free (since it IS a family member), but I wanted him to think of it as a real loan and that it will need to be payed back at a later date. Unfort. i’m not in the position to say, “ahh, just forget about it bro”. Well, not yet anyways :) I expect this category to go up $1,353 by year’s end, and put this into the Assets category as I count it as an investment.
Home Equity: This is the difference between the price we PAID for our house, and the MORTGAGES left on them. Actually, it’s 1/2 of the total equity as I’m only including my portion, not my fiancée’s yet until we’re married. I’m also heavily thinking of taking this out as housing prices are fluctuating like crazy these days. Plus since houses actually sell for what someone’s willing to pay for it, who knows what the sales price will be by that point.
Auto Worth (kbb): This is the value the Kelly Blue Book puts on my car at the time I pull it. Normally I wouldn’t put this here, but i need to help balance my car loan w/ something right? This category will def. go down each month…
Credit Cards: For net worth accounting, this includes my personal credit card + 1/2 of all outstanding store credit cards. All cards are either paid off in full each month, or at 0% financing. I am hoping we don’t add a lot more because of our upcoming wedding! The current plan is to have all cards wiped out to $0.00 by year’s end.
Auto Loan: My auto loan :) My plan is to sell my current car, however, and pick up an oldie but goody. This should def. help out the numbers.
So there we have it – my 2008 Net Worth goal. It suuuure looks sweet, now let’s see if I can make it a reality!
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Personal Capital account instead.
Personal Capital is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Personal Capital - check it out here: Why I Use Personal Capital Almost Every Single Day.
(There's also Mint.com too btw which is also free and automated, but its more focused on day-to-day budgeting rather than long-term net worth building)
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Hi! I’m trying to get better about focusing on growing our money. So, I started going back on your Net Worth posts to see how you have amazingly grown it so quickly to such an impressive number! My question, though, is why you don’t consider to be the $$ left on your mortgage to be a liability? Is that because you’re basically saying that you could sell it and it would be off the books? (Whereas there’s nothing I can do to get rid of a school loan?) If that’s the case, why wouldn’t a car loan be the same since you can get rid of it by selling the car?
I guess I’ve always thought we need to count our $400K mortgage as a liability, which basically wipes out all of the value of my assets, plus a lot. Anyway, don’t know if you’ll answer, but just curious about that! Thanks for all of your awesome posts and wisdom. :)
Wow – you found an oldie post on here! Haven’t seen this one in years, haha… But you bring up some valid questions :)
I can’t recall exactly the way I felt back then on there other than reading this post just like you did, BUT I can say that I most definitely agree that mortgages and home values should both be included in net worths – at least if you want an overall snapshot of things (some people track their net worth for all type of reasons, but for the true one – “assets minus liabilities” – it should be included).
Back then I was just learning about stuff and putting together my very first net worth snapshot, and I could have been just doing a shortcut of taking what it was worth and subtracting the cost of the mortgages – know what I’m saying? So it’s still IN there, just not laid out like I think it should be. And like how they are now:
Does that answer your question? I do think it’s important to list both sides of the equation there – the value and the debt that comes along with it or it gets all kinds of unbalanced.
Here’s an article I did one year later too if it helps. It talks about what my net worth would look like with and without house stuff in it – it’s pretty interesting:
Hope this helps! :)
Ohmigoodness, I TOTALLY spaced on coming back here to check your answer. :) The holidays + one month of sickness in our family have gotten me off-track in my “get-our-financial-life-in-order” planning. Thank you so much for your reply and, yes, those links TOTALLY help me out in setting up my net worth spreadsheet! I wasn’t even thinking about having the mortgage/value on both sides, which obviously makes sense and balances it out.
Thank you again…not just for this post, but for all of your encouragement, positivity and awesome attitude about spending/saving/investing!
No problem! I love all this money stuff and spreading the word, so I’m glad you’re getting some help from it! Hope your fam is nice and healthy now :)
Hey J. Money, I started on my journey to financial freedom 4 months ago and the first stop is my own home! Stumbled across your Net Worth posts from the Rock Star Finance list. I have to say you’ve inspired me man! I’ll be posting this monthly now to keep me on track. I have also used your New Worth planner to do so. Great blog man, you’re an inspiration!
Hey, cool man!
Way to start tracking it all – it’s one of the BEST things I’ve ever done. Motivates you like crazy and seeps into all your habits, you’ll like it :)
And gotta thank you for getting me back to a post that’s now over 8 years old – wow! So crazy to read through this and see how far we’ve come, along w/ all the old comments here…. bad ass.
Wow! This was 8 years ago and I’ve been reading your net-worth updates since I found you a year ago!
I must say this is very inspiring – seeing where you were and where you are now. I’ve been frustrated at the slower pace of increasing my financial net-worth but then again it’s teaching me to be patient. I wonder what my “8 years from now” will look like :)
It’ll be immensely bigger for you too if you keep going – no doubt! We all have our frustrating periods (my worth has pretty much stayed flat for the past year+) but in the *long run* it’ll be most magnificent ;) Just gotta use time on our side!
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