Now is a good time to start tracking your net worth.

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Watty
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Now is a good time to start tracking your net worth.

Post by Watty » Wed Jan 01, 2020 7:09 pm

If you are not already tracking your net worth now is a good time to start tracking it.

I have a very simple spreadsheet that I update each year on January 1st and I have been doing this for 16 years now.

It only takes me about 15 minutes to enter my account balances, any debts, and estimates of things like my house and car values.

This really helps me to see my progress over the years and at least for me only doing it once a year really helps me avoid the noise of seeing it more frequently.

I also go over this with my wife to make sure that she knows the current situation and this is important since I normally do most of the finances in out household.

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Re: Now is a good time to start tracking your net worth.

Post by Jimmie » Wed Jan 01, 2020 7:25 pm

Watty wrote:
Wed Jan 01, 2020 7:09 pm
If you are not already tracking your net worth now is a good time to start tracking it.

I have a very simple spreadsheet that I update each year on January 1st and I have been doing this for 16 years now.

It only takes me about 15 minutes to enter my account balances, any debts, and estimates of things like my house and car values.

This really helps me to see my progress over the years and at least for me only doing it once a year really helps me avoid the noise of seeing it more frequently.

I also go over this with my wife to make sure that she knows the current situation and this is important since I normally do most of the finances in out household.
I do all this, except the part where I go over the details with your wife, since we've never met. :D

Seriously, this plus joining PlanVision a few months ago as a double-check to confirm my plan. Best $96 I ever spent. (There are other threads on that topic.)

My other goal this year is to track our expenses in detail. My GF and I are about two years from retirement, so since we have a good grasp of the income side of the equation, I want to accurately know the expense side. I currently have a good idea where we are, but we both help out adult children and grandchildren since we have the resources. We are okay because we pay ourselves first.

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Re: Now is a good time to start tracking your net worth.

Post by Hockey10 » Wed Jan 01, 2020 7:29 pm

Watty - I do the same exact thing. Great minds think alike. :sharebeer

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Re: Now is a good time to start tracking your net worth.

Post by manatee2005 » Wed Jan 01, 2020 7:49 pm

I started doing the same thing in 2012 to find out when I can FIRE. I don't just put in my assets and debts, I also project what my balances will be for the next 10 years.

Barefoot
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Re: Now is a good time to start tracking your net worth.

Post by Barefoot » Thu Jan 02, 2020 6:40 pm

Why do I need to know my net worth?

Why should I care?

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Re: Now is a good time to start tracking your net worth.

Post by jebmke » Thu Jan 02, 2020 6:50 pm

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
I provide an update to my estate lawyer every year in case the changes are material enough to trigger a change in his advice. So far, he just files it. My state has decoupled from Federal estate tax law so at some point he may come to me and say "you might want to consider blah-blah-blah." Also gives him an asset list in case someone can't find my schedule in the files when I croak. The only non-financial asset I list is the house and I just wait for the latest assessment - I don't bother to fine tune this number.

edit: I do a separate summary of the financial assets for my spouse so she can plan all the parties after I'm gone. It also helps us think through our charitable gift planning.
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Taj_Mahalo
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Re: Now is a good time to start tracking your net worth.

Post by Taj_Mahalo » Fri Jan 03, 2020 9:44 am

Started doing the same last year except monthly. Stopped after a few months because of the "noise". Plan to do it annually like you as we go forward. Quick and easy way to track progress IMO.
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Re: Now is a good time to start tracking your net worth.

Post by JupiterJones » Fri Jan 03, 2020 10:24 am

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
It's a mighty good indicator of overall financial health and outlook.

If it's negative, that's bad.

If it's positive, the value itself isn't as interesting as the change from year-to-year.
Stay on target...

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Re: Now is a good time to start tracking your net worth.

Post by bloom2708 » Fri Jan 03, 2020 10:29 am

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
You could save a lot, spend even more and go backwards. Many do.

People that track their net worth are worth ~20% more than people that don't. I read that on the interweb.
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Re: Now is a good time to start tracking your net worth.

Post by nisiprius » Fri Jan 03, 2020 10:37 am

bloom2708 wrote:
Fri Jan 03, 2020 10:29 am
People that track their net worth are worth ~20% more than people that don't. I read that on the interweb.
1) "Citation needed."

2) How would anybody be able to know that their net worth was 20% higher if they don't track their net worth?

3) Even if true, how would you separate cause an effect? I suspect that people who own Teslas are worth at least 20% more than people who don't.

Or am I being obtuse, and this is a joke?
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Re: Now is a good time to start tracking your net worth.

Post by bloom2708 » Fri Jan 03, 2020 11:01 am

nisiprius wrote:
Fri Jan 03, 2020 10:37 am
bloom2708 wrote:
Fri Jan 03, 2020 10:29 am
People that track their net worth are worth ~20% more than people that don't. I read that on the interweb.
1) "Citation needed."

2) How would anybody be able to know that their net worth was 20% higher if they don't track their net worth?

3) Even if true, how would you separate cause an effect? I suspect that people who own Teslas are worth at least 20% more than people who don't.

Or am I being obtuse, and this is a joke?
Situational awareness. If you track your net worth you understand what makes it go up. If you want it to go up you do MORE of things that make it go up. Self fulfilling.

I posted as a carrot to track net worth. I have several long time friends who would never calculate their net worth. It is negative. It would be too disturbing to see it on paper.

Only here could net worth be controversial. People love to save .1% on expense ratios and also love to pay tax 30-40 years before tax is due. Many oddities.

I'll adjust and say 0-20%. It wasn't a joke, I have read this statistic in several places. All of which could be made up to get people to know their net worth.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead

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Re: Now is a good time to start tracking your net worth.

Post by happymob » Fri Jan 03, 2020 11:25 am

I'll update single records in my spreadsheet anytime I log into one of my accounts. I only do the official check every account thing once a year (sometime in late December - I don't care that it's not on the exact same day every year).

Takes me about one hour. We have too many accounts, in general, but we also log into our pension website (both for current cash value of pension and for income at projected retirement) and the Social Security Administration (for income at age 70) to get updated figures for some retirement income modeling that drives the next year's Traditional vs. Roth and Roth conversion decisions.

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Re: Now is a good time to start tracking your net worth.

Post by soccerrules » Fri Jan 03, 2020 11:29 am

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
+1
Mine is positive. I can in a matter of a few seconds know what my approximate NW is by doing the math in my head. (Investments - mortgage + House & car values). My back of the napkin calculation is probably off +/- 3-4 %. But how cares?
I am not planning to live off my NW value, so it is of little importance other than to pump up my ego or post on a forum as a measuring stick. We have all discussed it really doesn't matter how big mine is compared to others, I need to row my own boat.

I use to tell my kids all the time-- "there will always be people with more or less than you, taller/shorter, faster/slower, etc - always"
Don't let your outflow exceed your income or your upkeep will be your downfall.

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Re: Now is a good time to start tracking your net worth.

Post by watchnerd » Fri Jan 03, 2020 11:31 am

Watty wrote:
Wed Jan 01, 2020 7:09 pm
If you are not already tracking your net worth now is a good time to start tracking it.

I have a very simple spreadsheet that I update each year on January 1st and I have been doing this for 16 years now.

It only takes me about 15 minutes to enter my account balances, any debts, and estimates of things like my house and car values.

This really helps me to see my progress over the years and at least for me only doing it once a year really helps me avoid the noise of seeing it more frequently.

I also go over this with my wife to make sure that she knows the current situation and this is important since I normally do most of the finances in out household.
I just use Mint. It does it automatically, linked to my accounts, tracks it over time.
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Re: Now is a good time to start tracking your net worth.

Post by tibbitts » Fri Jan 03, 2020 11:36 am

For twenty years I did the January 1 ritutal exactly as described. Then I realized it didn't matter or mean anything so now I waste time in other ways. I haven't had enough to worry about net worth reaching estate tax levels and result in planning changes for that under past or current law. If that changes and estate taxes reach down the low-net-worth individuals, which seems like a reasonable probability, maybe I'll start paying attention again.

I do track my 1/1 IRA values since the evil 8606 form requires me to report them (collectively) annually.

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Re: Now is a good time to start tracking your net worth.

Post by DoubleClick » Fri Jan 03, 2020 11:38 am

nisiprius wrote:
Fri Jan 03, 2020 10:37 am
Or am I being obtuse, and this is a joke?
I think it was a joke. I thought it was funny. The word "interwebs" is a good indicator.

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Re: Now is a good time to start tracking your net worth.

Post by Triple digit golfer » Fri Jan 03, 2020 11:38 am

I do track net worth and think it is important, but I track my savings rate more closely. Net worth can change significantly with 70%+ of it in equities, so I can be doing all the right things and have my net worth drop in a year or even over a few years in a bear market. I can control savings rate, make adjustments as necessary, and improve. With net worth, there's not much actionable if I am not happy with the number, other than going after the savings rate.

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Re: Now is a good time to start tracking your net worth.

Post by Triple digit golfer » Fri Jan 03, 2020 11:39 am

DoubleClick wrote:
Fri Jan 03, 2020 11:38 am
nisiprius wrote:
Fri Jan 03, 2020 10:37 am
Or am I being obtuse, and this is a joke?
I think it was a joke. I thought it was funny. The word "interwebs" is a good indicator.
I didn't think it was a joke. I believe he was serious when he said that he read that people who track their net worth are worth 20% more.

Say that last sentence ten times fast!

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Stef
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Re: Now is a good time to start tracking your net worth.

Post by Stef » Fri Jan 03, 2020 11:41 am

I track savings rate, net worth, total yield and XIRR.

Investing is boring, tracking makes it fun.

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Re: Now is a good time to start tracking your net worth.

Post by njuser » Fri Jan 03, 2020 11:41 am

I do this for the past 5 years and also started keeping track of expenses the past three years in preparation for retirement. Wish I started the expenses sooner.

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Re: Now is a good time to start tracking your net worth.

Post by ShiftF5 » Fri Jan 03, 2020 11:51 am

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
I’m going to assume most anyone here on the Bogleheads board has an interest in improving their personal financial situation.

More than 25 years ago a wealthy friend of mine asked me what my net worth was and I didn’t know. He sat me down and in 10 minutes we figured it out.

Then he suggested I start tracking and growing my net worth. Since he was wealthy and I wasn’t, I figured I’d take his suggestion and start tracking and trying to grow my net worth.

Over that 25+ years most years it went up, some years it went down (2000, 2001, 2002, 2008, 2018, etc.) but I stuck with it.

I identify that one suggestion as THE REASON I’m financially successful today.

What you measure - Grows.

Give it a try. You will be amazed.

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Re: Now is a good time to start tracking your net worth.

Post by Triple digit golfer » Fri Jan 03, 2020 11:52 am

ShiftF5 wrote:
Fri Jan 03, 2020 11:51 am
Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
I’m going to assume most anyone here on the Bogleheads board has an interest in improving their personal financial situation.

More than 25 years ago a wealthy friend of mine asked me what my net worth was and I didn’t know. He sat me down and in 10 minutes we figured it out.

Then he suggested I start tracking and growing my net worth. Since he was wealthy and I wasn’t, I figured I’d take his suggestion and start tracking and trying to grow my net worth.

Over that 25+ years most years it went up, some years it went down (2000, 2001, 2002, 2008, 2018, etc.) but I stuck with it.

I identify that one suggestion as THE REASON I’m financially successful today.

What you measure - Grows.

Give it a try. You will be amazed.
I'm glad it worked out for you so well. What did you do different to increase net worth after that conversation?

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Re: Now is a good time to start tracking your net worth.

Post by watchnerd » Fri Jan 03, 2020 11:53 am

I'm curious why some of you do the extra manual work of making it a spreadsheet.

There are online tools that do all of this automatically, including expense tracking.
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Re: Now is a good time to start tracking your net worth.

Post by daheld » Fri Jan 03, 2020 11:57 am

I just did it for the first time after reading this post. I don't feel any different than I did fifteen minutes ago and it will not impact my plan or philosophy.

ShiftF5
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Re: Now is a good time to start tracking your net worth.

Post by ShiftF5 » Fri Jan 03, 2020 12:03 pm

Triple digit golfer wrote:
Fri Jan 03, 2020 11:52 am
ShiftF5 wrote:
Fri Jan 03, 2020 11:51 am
Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
I’m going to assume most anyone here on the Bogleheads board has an interest in improving their personal financial situation.

More than 25 years ago a wealthy friend of mine asked me what my net worth was and I didn’t know. He sat me down and in 10 minutes we figured it out.

Then he suggested I start tracking and growing my net worth. Since he was wealthy and I wasn’t, I figured I’d take his suggestion and start tracking and trying to grow my net worth.

Over that 25+ years most years it went up, some years it went down (2000, 2001, 2002, 2008, 2018, etc.) but I stuck with it.

I identify that one suggestion as THE REASON I’m financially successful today.

What you measure - Grows.

Give it a try. You will be amazed.
I'm glad it worked out for you so well. What did you do different to increase net worth after that conversation?
The focus on Net Worth got me to start thinking about (+ seeing) ways to increase my income and decrease my expenses both of which helped me increase my savings rate ($$ going into S+P 500). I was tracking it monthly.

When the monthly investment growth numbers would jump, that fueled my desire to redouble my efforts.

There’s something about making $$ with zero effort (investment growth), that really motivated me.

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Re: Now is a good time to start tracking your net worth.

Post by UpperNwGuy » Fri Jan 03, 2020 12:05 pm

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
You don't need to know your net worth, and there is no reason for you to care. However, tracking net worth seems to be an activity that many bogleheads find entertaining. If they enjoy it, let them do it. But please don't tell us that we *ought* to start doing it.

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Re: Now is a good time to start tracking your net worth.

Post by JoeRetire » Fri Jan 03, 2020 12:10 pm

Watty wrote:
Wed Jan 01, 2020 7:09 pm
If you are not already tracking your net worth now is a good time to start tracking it.

I have a very simple spreadsheet that I update each year on January 1st and I have been doing this for 16 years now.

It only takes me about 15 minutes to enter my account balances, any debts, and estimates of things like my house and car values.

This really helps me to see my progress over the years and at least for me only doing it once a year really helps me avoid the noise of seeing it more frequently.

I also go over this with my wife to make sure that she knows the current situation and this is important since I normally do most of the finances in out household.
I updated and filed away my 2019 spreadsheet yesterday, and started my 2020 spreadsheet as well.
I usually update it monthly.

I also do all the finances. I have only limited success convincing my wife to go over the numbers with me.
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Re: Now is a good time to start tracking your net worth.

Post by snackdog » Fri Jan 03, 2020 12:21 pm

I do it mostly for fun. Most people don't do it and that is fine for them.

I recall having to do it for a Boy Scout merit badge in about 1979. My father sat me down and we tallied up about $200K in net worth for the entire family. I was duly impressed.

One interesting metric I haven't seen mentioned yet is the annual increase as a function of income or savings. Our net worth increased about six times after tax income (or >10x savings) in 2019. This can be a signal it is ok to stop working as one is not making much impact on net worth.

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Re: Now is a good time to start tracking your net worth.

Post by junior » Fri Jan 03, 2020 12:22 pm

UpperNwGuy wrote:
Fri Jan 03, 2020 12:05 pm

You don't need to know your net worth, and there is no reason for you to care. However, tracking net worth seems to be an activity that many bogleheads find entertaining. If they enjoy it, let them do it. But please don't tell us that we *ought* to start doing it.
I agree net worth is pointless aside from entertainment. Tracking net worth also has has downsides if you take it too seriously. It can actively discourage you during a market crash, and leads to illusory ideas like a share of stock in a roth 401k is worth the same as the same share in a taxable account or regular 401k.

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Re: Now is a good time to start tracking your net worth.

Post by deltaneutral83 » Fri Jan 03, 2020 12:34 pm

junior wrote:
Fri Jan 03, 2020 12:22 pm
UpperNwGuy wrote:
Fri Jan 03, 2020 12:05 pm

You don't need to know your net worth, and there is no reason for you to care. However, tracking net worth seems to be an activity that many bogleheads find entertaining. If they enjoy it, let them do it. But please don't tell us that we *ought* to start doing it.
I agree net worth is pointless aside from entertainment. Tracking net worth also has has downsides if you take it too seriously. It can actively discourage you during a market crash, and leads to illusory ideas like a share of stock in a roth 401k is worth the same as the same share in a taxable account or regular 401k.
I assume (but obviously not a fact) that everyone plans to retire one day and does not intend to have regular earned income in some form of "work." How else would someone even begin the process to know when the right time will be or even develop a projection of when that me be without figuring your liquid net worth at least yearly?

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Re: Now is a good time to start tracking your net worth.

Post by monkey_business » Fri Jan 03, 2020 12:40 pm

UpperNwGuy wrote:
Fri Jan 03, 2020 12:05 pm
Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
You don't need to know your net worth, and there is no reason for you to care. However, tracking net worth seems to be an activity that many bogleheads find entertaining. If they enjoy it, let them do it. But please don't tell us that we *ought* to start doing it.
I don't understand this. Net worth is the financial independence gauge. Saying you don't care about your net worth is like saying you don't care about financial independence. If that's the case, this forum is an odd place to spend time.

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Re: Now is a good time to start tracking your net worth.

Post by junior » Fri Jan 03, 2020 1:00 pm

deltaneutral83 wrote:
Fri Jan 03, 2020 12:34 pm

I assume (but obviously not a fact) that everyone plans to retire one day and does not intend to have regular earned income in some form of "work." How else would someone even begin the process to know when the right time will be or even develop a projection of when that me be without figuring your liquid net worth at least yearly?
I'll tell you how I do it.

I project what my retirement accounts will be 20 years from now. I grab an investment return calculator and throw in numbers for expected annual return on investment, annual contribution, and initial investment. I also track my current annual expenses and presume the annual expenses will be similar in retirement.

Net worth is not useful to me for this process, because my assets outside my retirement accounts are not meant to be used to retire.

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Re: Now is a good time to start tracking your net worth.

Post by HomerJ » Fri Jan 03, 2020 1:04 pm

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
So you know when to retire.

Do you plan to work forever?
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Re: Now is a good time to start tracking your net worth.

Post by HomerJ » Fri Jan 03, 2020 1:05 pm

junior wrote:
Fri Jan 03, 2020 1:00 pm
deltaneutral83 wrote:
Fri Jan 03, 2020 12:34 pm

I assume (but obviously not a fact) that everyone plans to retire one day and does not intend to have regular earned income in some form of "work." How else would someone even begin the process to know when the right time will be or even develop a projection of when that me be without figuring your liquid net worth at least yearly?
I'll tell you how I do it.

I project what my retirement accounts will be 20 years from now. I grab an investment return calculator and throw in numbers for expected annual return on investment, annual contribution, and initial investment. I also track my current annual expenses and presume the annual expenses will be similar in retirement.

Net worth is not useful to me for this process, because my assets outside my retirement accounts are not meant to be used to retire.
Exact total net worth may not be required, but you do track the net worth of your retirement accounts.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

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Re: Now is a good time to start tracking your net worth.

Post by Artful Dodger » Fri Jan 03, 2020 1:07 pm

I just finished this an hour ago. I've been doing this for some time. I remember my father sending my brother and I a copy of his net worth statement for a few years before he passed away.

My accounts are linked to Fidelity Fullview, so I can just print off a Assets and Liabilities report. I have to modify to update my Life Insurance cash values and mortgage balance due to some software update issues, but that only takes two separate logins.

Of note, we were up just shy of 20% from a year ago.

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Re: Now is a good time to start tracking your net worth.

Post by junior » Fri Jan 03, 2020 1:12 pm

HomerJ wrote:
Fri Jan 03, 2020 1:05 pm
Exact total net worth may not be required, but you do track the net worth of your retirement accounts.
Sure, but I think when people talk about net worth they mean everything, student loan debt, retirement accounts, cash in the checking account, the value of the car they just bought, etc. I don't think there's much point to that outside of the entertainment value. I certainly don't use money I don't plan to save for retirement in my retirement projections.

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Re: Now is a good time to start tracking your net worth.

Post by dbr » Fri Jan 03, 2020 1:18 pm

Situational awareness is enough reason to maintain some sort of financial accounting, and that would logically include net worth even if one does not graph and print out the results every night at midnight. I don't think "ignorance is a blessing" is very good advice.

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Re: Now is a good time to start tracking your net worth.

Post by gopack13 » Fri Jan 03, 2020 1:25 pm

watchnerd wrote:
Fri Jan 03, 2020 11:53 am
I'm curious why some of you do the extra manual work of making it a spreadsheet.

There are online tools that do all of this automatically, including expense tracking.
I have a few reasons, personally. First, if I'm the one creating the spreadsheet, it forces me to know/understand everything that's going into it. Second, since I'm the one that has to update it, it forces me to actually see the info/data (all the automated tools mean nothing if I don't actually look at them). Third, I use it as a way to learn new things since most of my updates are done with macros I've written (condo value and ticker prices update at the click of a button, both of which required me to figure out how and to learn new code). Finally, it's just fun to me.

For what it's worth, I don't "track" my net worth, in the sense that I don't keep track of historical values of it. I don't project it out either. It's an easy formula, so it's in my spreadsheet as a snapshot, but I don't do anything with it other than see it and say, "cool." My investment totals, I don't track either but I do project them out. I couldn't care less what my previous balances were but I am interested in what they might be under certain conditions.

For most people, sure automated tools are useful. But doing everything yourself can be very, very beneficial if one has the desire to do so. My spreadsheet started as a simple way to track expenses back in 2012. It's since evolved over time to include much, much more. I love having complete control over what info it uses, as well as what I can possibly add to it in the future. Plus, by seeing it all on a frequent basis, I can make sure things like my expenses don't get out of hand without realizing it.

deltaneutral83
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Re: Now is a good time to start tracking your net worth.

Post by deltaneutral83 » Fri Jan 03, 2020 1:26 pm

junior wrote:
Fri Jan 03, 2020 1:12 pm
HomerJ wrote:
Fri Jan 03, 2020 1:05 pm
Exact total net worth may not be required, but you do track the net worth of your retirement accounts.
Sure, but I think when people talk about net worth they mean everything, student loan debt, retirement accounts, cash in the checking account, the value of the car they just bought, etc. I don't think there's much point to that outside of the entertainment value. I certainly don't use money I don't plan to save for retirement in my retirement projections.
I think posters like myself found your initial post to be lacking in context in that we may have understood you to imply you do not track anything but you have made it clear that you certainly keep an eye on accounts that you do plan to use for retirement which is all that most everyone else is implying that they do as well. Most everyone has a different set of criteria (does primary residence/cars/antiques etc. count? ) for NW but using whatever is going to fund your retirement expenses as a baseline is something I think most people would try to plan as best they can. I can certainly agree with you in that keeping track of daily automobiles doesn't make much sense given they are going toward $0 in a relatively short amount of time inside a 30-50 year time horizon.

As far as entertainment, I can assure you one buddy of mine didn't find the calculation of his net worth "entertaining" as it was being done by his ex-wife's divorce attorney!

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Re: Now is a good time to start tracking your net worth.

Post by fposte » Fri Jan 03, 2020 1:29 pm

watchnerd wrote:
Fri Jan 03, 2020 11:53 am
I'm curious why some of you do the extra manual work of making it a spreadsheet.
I like the manual entry part of it. I do the same with my budget. It makes my money more concrete to me and helps divert my urge to tinker with actual investments into tinkering with spreadsheets.

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greg24
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Re: Now is a good time to start tracking your net worth.

Post by greg24 » Fri Jan 03, 2020 1:32 pm

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
It helps for planning. When will I be able to retire? How much can I contribute to my children's college funds?

Maybe you don't like to plan, or don't plan on retiring. YMMV.

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Re: Now is a good time to start tracking your net worth.

Post by mptfan » Fri Jan 03, 2020 1:45 pm

watchnerd wrote:
Fri Jan 03, 2020 11:53 am
I'm curious why some of you do the extra manual work of making it a spreadsheet.
It's fun for me, I enjoy tinkering with spreadsheets.

Some people may enjoy building a watch from scratch when it's very easy to buy a watch instead.

dbr
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Re: Now is a good time to start tracking your net worth.

Post by dbr » Fri Jan 03, 2020 1:49 pm

watchnerd wrote:
Fri Jan 03, 2020 11:53 am
I'm curious why some of you do the extra manual work of making it a spreadsheet.

There are online tools that do all of this automatically, including expense tracking.
Because it is simple and easy to do spreadsheets and I have no interest in being signed up for still another online account I have to get involved with. I would prefer just exactly that it not be online.

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Portfolio7
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Re: Now is a good time to start tracking your net worth.

Post by Portfolio7 » Fri Jan 03, 2020 3:04 pm

Barefoot wrote:
Thu Jan 02, 2020 6:40 pm
Why do I need to know my net worth?

Why should I care?
I guess it depends. If you are secure in your income and plan on retiring in place, and you have no other financial complications, maybe you don't need to.

Otoh, Net worth details your resources. This is helpful if in addition to standard assets you own a business or additonal real estate. If you have a major life event that changes every aspect of your life, having a comprehensive view of your resources and liabilities is helpful. One thing I like about knowing my actual net worth is that I know we can walk away from our workplaces and retire tomorrow if we had no other goals, and didn't mind the drop in income. We'll wait another 8 years, help a son with college payments, and build our retirement income stream to a number we'd prefer... but if we had to, we could do it. I also use that information to help build a simplified statement of cash flows for the next 50 years. I don't plan on a static withdrawal rate, it's going to be variable depending on several variables. So I built a spreadsheet that lets me change those variables quickly, and use that to model different retirement scenarios. Also, while I'm not going to reduce our savings rate, it's really interesting that for the past several years our net worth has grown substantially more than our retirement accounts. This means we may have more resources for retirement than we've been anticipating. I have no interest in working any longer than I have to in my current job.

For Net Worth, I exclude things like cars and furniture (and modest collectibles). My treasures are my neighbor's trash. I include Cash, investments, real estate, businesses, and of course any debt we carry, especially car loans... but not the cars themselves. The debt is real, the car value can be highly questionable.
"An investment in knowledge pays the best interest" - Benjamin Franklin

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Re: Now is a good time to start tracking your net worth.

Post by warner25 » Fri Jan 03, 2020 3:07 pm

watchnerd wrote:
Fri Jan 03, 2020 11:31 am
I just use Mint. It does it automatically, linked to my accounts, tracks it over time.
We tried Mint around 2010, and again in 2017, and found it too buggy. The connections to one or more of our accounts seemed to break and fail to update every month. I often had to remove and add the accounts again, and then sometimes we still had duplicate accounts shown. A number of things we track had to be added in manually anyway because they don't interface with Mint.

So I've worked on a spreadsheet like the OP since 2010. I think it's good to manually log into our accounts every month to maintain access, see messages, etc. This time last year, I thought about only checking and recording our net worth annually, but then I kept doing it every month. Honestly, I find it addictive to see the increase every month, with the booming stock market and all. I do worry about how I'll feel during an extended downturn. Maybe then I'll switch to doing it annually.

camaro1185
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Re: Now is a good time to start tracking your net worth.

Post by camaro1185 » Fri Jan 03, 2020 3:13 pm

I do the same. I manually track my expenses, budget and net worth on a monthly basis. It takes about 20 minutes on the first of every month. If the net worth does not increase on a monthly basis I know we have to adjust!

SweetAeromotion
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Re: Now is a good time to start tracking your net worth.

Post by SweetAeromotion » Fri Jan 03, 2020 3:14 pm

Thanks you for posting this. It reminded me to update my Dec 2019 NW spreadsheet.

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Re: Now is a good time to start tracking your net worth.

Post by soccerrules » Fri Jan 03, 2020 3:20 pm

To me Net Worth is one sign of your financial health. I choose not to track it closely, but that's me.

I do not use Net Worth as a vital part of when i can retire. I use my liquid assets, SS projection and spending to determine if I am ready. Having a paid off house is part of my consideration and it impacts my expected spending.

My Net worth has my House and Cars included and I am not likely to sell those to generate cash to add to my liquid assets. I have seen the comment, you can't sell a room of your house to generate $100K in cash. Also with both House and Cars I am 'projecting" what i think the market will pay for these assets whether that is truly what can be garnered from their liquidation. Then comes the comment that I will need a place to live and likely transportation so then what do I do?

Tracking Net Worth is a fun game to play in my eyes. If you started in the negative--when did you get to $0, then $100K , $500K, $1M etc. A little like the 2 comma club, they are milestones.
Don't let your outflow exceed your income or your upkeep will be your downfall.

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Re: Now is a good time to start tracking your net worth.

Post by sperry8 » Fri Jan 03, 2020 3:23 pm

Taj_Mahalo wrote:
Fri Jan 03, 2020 9:44 am
Started doing the same last year except monthly. Stopped after a few months because of the "noise". Plan to do it annually like you as we go forward. Quick and easy way to track progress IMO.
I do this as well - but do it monthly. While annual is all that really counts, I track monthly so I can ensure I'm not blowing through budget and tracking towards annual budget properly.
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Re: Now is a good time to start tracking your net worth.

Post by mindboggling » Fri Jan 03, 2020 3:30 pm

My investments and the rest of my life are so simple I can calculate my net worth pretty closely in my head anytime I want to. I don't, however, find it terribly useful for anything.
In broken mathematics, We estimate our prize, --Emily Dickinson

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