If you just track NW on a spreadsheet....isn't that sufficient?

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Keepcalm
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If you just track NW on a spreadsheet....isn't that sufficient?

Post by Keepcalm » Tue Oct 30, 2018 1:51 pm

For the past (3) years or so I have used Quicken.Tell me this...

At the end of the day, what does my NW not tell me that Quicken does?

If my NW is declining month to month I know I am living beyond my means. Time to adjust.

If my NW is trending straight east I can look further and see Assets/Liabilities....in this case of tracking east (versus northeast) I could see it is due because of transfers of paying down liabilities with my liquid assets.

Many other factors can be found in NW.

Now I know this is far cry from some phenomenon. My point is.....is a spreadsheet with just your NW and a breakdown of Assets/Liabilities more than enough?

I feel as if I am waisting my time tracking every transaction.
Last edited by Keepcalm on Tue Oct 30, 2018 1:55 pm, edited 1 time in total.

FireProof
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by FireProof » Tue Oct 30, 2018 1:55 pm

Sure. I don't track it at all, and it's also sufficient. How would it help me in my decision-making? If it declines, that's much more likely a result of a stock market decline than me living beyond my means.

bigtex
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by bigtex » Tue Oct 30, 2018 1:55 pm

I have taken this net worth mindset as well for tracking finances. I track net worth increases and decreases by category each month. Investments, Cash / Bank Accounts, and Property. I find this is the easiest way to truly tell if I am saving adequately and on track for financial independence.

Keepcalm
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by Keepcalm » Tue Oct 30, 2018 1:56 pm

FireProof wrote:
Tue Oct 30, 2018 1:55 pm
Sure. I don't track it at all, and it's also sufficient. How would it help me in my decision-making? If it declines, that's much more likely a result of a stock market decline than me living beyond my means.
Yes this is true....the NW may fluctuate heavily month to month due to investment volatility.....could this be a reason why maybe software such as Quicken is more feasible? So that you can see MORE.

Keepcalm
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by Keepcalm » Tue Oct 30, 2018 1:57 pm

I am also probably being ignorant to the fact that its (Quicken) also to track your bills and micromanage making sure all bills are tracked and paid. To see current state of all financial accounts.
Last edited by Keepcalm on Tue Oct 30, 2018 1:58 pm, edited 1 time in total.

jebmke
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by jebmke » Tue Oct 30, 2018 1:58 pm

I have a limited balance sheet on a spreadsheet but I only do this once a year to see if there is anything new I should mention to the lawyer who did our wills. Month to month it probably moves up and down mostly due to equity market movement so there isn't any need to track it month to month.
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Jack FFR1846
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by Jack FFR1846 » Tue Oct 30, 2018 1:59 pm

I track investments on a spread sheet I've used for maybe 5 years. This year, I added a net worth line as it was simple to do. I don't believe I've ever actually looked at what its value is.

I disagree that you can tell that you're overspending by seeing a declining net worth. Over the last month or so, with a declining market, my investment value dropped a couple hundred grand. I'm spending no differently than last month. So my net worth number tells me nothing.

I think you're looking for a budget. Like YNAB or something. Not really sure. I expect there's nothing magical about Quicken and you could replicate it with a properly designed spread sheet.
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CarpeDiem22
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by CarpeDiem22 » Tue Oct 30, 2018 2:01 pm

There are three financial statement every business tracks: Profit & Loss statement, balance sheet and cash flow. To get the full picture of your personal finances, you should track the a same: P&L (monthly income and expenditure), balance sheet (NW tracker) and (optionally) cash flow.

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Cycle
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by Cycle » Tue Oct 30, 2018 2:03 pm

I think so, can help to track your goal in real dollars too. Like if I want $2MM to retire or whatever, that goal line is going to move with inflation and NW numbers include inflation.

End of the day though, the goal should probably be based on a spend multiplier. Like if Medicare for all came about, the goal would be significantly reduced due to less spend.

renue74
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by renue74 » Tue Oct 30, 2018 2:12 pm

I track my portfolio in a google sheet. Then have extra tabs.

(Contributions) - list of contributions/withdrawals by calendar year. I use that for XIRR.
(Historical) - at Dec. 31 of each year, I add a list of all investment account balances.
(Retirement Projection) - If/then type of sheet. Based on future savings, withdrawal rates, and estimated retirement ages...what I would have.
(Monthly expenses) - basic list of what we spend monthly
(Net worth) - It's there, it includes rental property owned, etc. But not very helpful.

This is a generic version of my spreadhsheet. (numbers changed, personal names/content removed)

https://docs.google.com/spreadsheets/d/ ... sp=sharing

I like it and use it a lot.

chisey
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by chisey » Tue Oct 30, 2018 2:22 pm

I think it's sufficient, and can be very useful for certain things. We track our financial picture monthly, something I started a decade ago by myself and continued once I got married. For me, it's about understanding the volatility and trajectory of the various metrics and to some degree can shine the light on our decisions and their effects.

For example, I started putting a series of notes in one column that points out the large but irregular cash flows in and out for that month. After doing that for awhile it became clear that "irregular" spending that you don't usually budget for tends to crop up nearly every single month. That realization hasn't necessarily changed our behavior but it has changed our perspective and the way we plan.

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tat2ng
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by tat2ng » Wed Oct 31, 2018 7:20 am

I used Quicken for several years, but quit as it was taking way too much of my time to keep it up to date (confirming transactions, downloading information from banks that didn't auto-download, etc.). I quit that process several years ago, so maybe the interaction between Quicken and most banks has improved, but still didn't seem to be worth the time (to me).

I then used Mint.com for a couple years, but also gave that up after a while. Mint was better at assigning transactions to a budget item, but still there were too many to "fix" and it never seemed like a good use of my time.

My current setup is just a few Google spreadsheets that I have created. First is a "snapshot" spreadsheet - shows every financial account we have, with sums for total net worth, and asset allocation %'s for the retirement accounts automatically calculated. Checking/savings balances have to be entered manually. Retirement type of accounts have a lookup function based on the funds ticker, so I just update the number of shares for each account every month or so. XIRR formulas are used for some of the individual accounts (ROTH, Education IRA's, old company stock) - not trying to capture everything, but just an idea of how a specific investment has performed. On a separate tab on that same spreadsheet, I also keep a balance history (month end) for my checking/savings (non-retirement) accounts, to track the ebb and flow of our cash on hand.

Second is a "budget" spreadsheet - one tab to track monthly bills/spending, and to give an idea of historical spending. The main tab is my "budget", but it is mostly a backward looking estimate of what we typically spend. The biggest takeaway I took from this was adding a % of net spending to each line item - it gives you some perspective when you're looking at your spending... and helps focus on the bigger % items as focus points to improve your bottom line. For example, do I really need to shop around for home insurance to save $100 when the total spend is <1% of my yearly spending?

I love the setup - sure it's not as automated as Quicken or Mint, but takes far less time to manage - and I still have a good high level understanding of how we sit financially. A nice big picture view.

AlohaJoe
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by AlohaJoe » Wed Oct 31, 2018 7:38 am

Keepcalm wrote:
Tue Oct 30, 2018 1:51 pm
At the end of the day, what does my NW not tell me that Quicken does?
Your net worth doesn't tell you if you have enough money in your checking account to pay your bills this month.

That's obvious, right? So obviously you are already looking at things other than just your worth.

People should track whatever they find useful for their own decision making patterns. If you don't find something useful, stop doing it. If someone else finds it useful and you don't, that's their choice.

In general, the wealthier someone is, the less closely they need to pay attention to details. You seem to be in a fortunate position but go read things like the YouNeedABudget forums or /r/personalfinance to finds lots of people who need to look at more than just net worth.

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BolderBoy
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by BolderBoy » Wed Oct 31, 2018 10:54 am

renue74 wrote:
Tue Oct 30, 2018 2:12 pm
This is a generic version of my spreadhsheet. (numbers changed, personal names/content removed)

https://docs.google.com/spreadsheets/d/ ... sp=sharing

I like it and use it a lot.
I can see why, it is very, very nice.

Is there a way to fetch this and load it into LibraOffice's Calc spreadsheet?
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kaudrey
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by kaudrey » Wed Oct 31, 2018 12:29 pm

I'd say it depends on the purpose.

I have a spreadsheet with multiple tabs:
1) NW - updated monthly, nice to know, doesn't affect any decisions
2) Savings - a list of ins and outs to all savings/retirement accounts
3) Expenses - I keep track of 11 major categories, and everything else is lumped into "Living Expenses". So, this is MUCH less detail that what Quicken would provide, but since I am not worried that we are spending more than we should, this is sufficient for future planning purposes
4) Retirement Projections - this keeps track of current income and spending and future projections for both income/spending as well as portfolio balance (the current year is fed from the data in spreadsheets 2 and 3, projections include future pensions, SS, the fact that we'll move at some point, travel more, etc).
5) Portfolio - updated monthly, I use this to look at our asset allocation across all accounts to see if we need to rebalance.

So, each tab has a purpose as is as detailed as it needs to be for that purpose. The Retirement Projections tab (vs the NW tab) is what fuels discussions/decisions/planning, as that sheet shows projected withdrawal rates based on projected portfolio balance (NW doesn't matter here because not all of it is liquid).

retiringwhen
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by retiringwhen » Wed Oct 31, 2018 1:31 pm

I use Quicken to track my credit cards, bills and checking account balances, track bill due dates and payments and keep track of actual spending by category. I don't like their budgeting model and don't really use the budget feature, but i do compare actuals in Quicken to a spreadsheet budget I make every year for planning purposes.

For 15 years, I tried to use Quicken to track full net worth including including all investments. All it gave me was heart-ache and things always went wrong, especially with tracking my 401(K). I was stubborn, but i should have quit long ago. (Full disclosure, I wrote a finance package on Unix using Perl back in the 1990s before I ever heard of Quicken :confused )

I gave up a year ago, created an Asset Allocation spreadsheet that uses Vanguard .csv downlad and Quicken reports to automate data collection. I allows me to review my asset allocation and create a Net worth report. It takes me less time to maintain, but it did take some serious effort to create, but it is totally flexible and within my power to manage.

98% of my investments are in Vanguard making the download process single step. I use quicken to talk to all of the credit card, bank/credit union type places.

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Earl Lemongrab
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by Earl Lemongrab » Thu Nov 01, 2018 1:31 pm

I don't track net worth. Then again, it's so close to my portfolio that the small differences due to emergency fund and home equity (and in the past home loan) are insignificant.

So what I have is an investment spreadsheet. This aggregates all of my investment accounts, sorts into allocations, and performs 5/25 rebalancing analysis on them.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by Golf maniac » Fri Nov 02, 2018 7:59 am

Each person is different. I have been using a budget for over 25 years now. I started with paper and pencil and have an extensive spreadsheet budget now. The budget tab has all of our spending and checking account balances. We update weekly it takes about 15 minutes. We put everything we can on a credit card for the cash back and pay off each week when we do the budget. Other tabs on the spreadsheet focus on “what if” scenarios including retirement assets and future portfolio valuations, potential social security claiming strategy, what if I die and leave DW what income / expenses she will have, etc.

I like looking at this type of stuff so it is more of a hobby for me.

barnaclebob
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Re: If you just track NW on a spreadsheet....isn't that sufficient?

Post by barnaclebob » Fri Nov 02, 2018 9:53 am

Keepcalm wrote:
Tue Oct 30, 2018 1:51 pm
...is a spreadsheet with just your NW and a breakdown of Assets/Liabilities more than enough?

I feel as if I am waisting my time tracking every transaction.
A spreadsheet is all I use. It just has columns for various accounts, house value, and mortgage balance. I snap a line on the first business day of each month and create a new row. That data feeds a sand pile chart.

If your cashflow is sufficient and you don't overspend constantly, then you don't need to track all of your expenses IMO. I know that the minimum credit card bill i can expect is about $1800 a month if we don't spend much extra and its usually around 2400-2600. After our mortgage payment we have about 5k leftover to split between credit cards and savings each month. Thats good enough for me.

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