It also means I get to see what I was thinking 8 years ago when I last updated it. I always recorded Net Worth on my birthday.
So how were my predictions? How close did I come to predicting our net worth at age 40 back when I was 32?
Well, I was off by 30%.
Yes, we're doing much better than I had predicted. Some interesting tidbits comparing us from 32 to 40:
- we have exactly the same amount of cash on hand now as we did then (we control to a certain number)
- I under estimated how much our 401K matching contributions would grow
- I over estimated how much we'd have in home equity (by 55K)
- I severely under estimated our total portfolio total (by 300K)
- our net worth is two and a half years ahead of schedule (that's a lot, actually)
Not bad, not bad. Just a couple of public University graduates that started early, made investing a priority, and focused on mutual funds. Keep on keeping on. I'd love to jump back in time 10 years and tell all those folks that chuckled at me when I told them about my spreadsheet that I was right, they were wrong, and "stay the course" and "keep it simple" works GREAT.
When I adjust for inflation, I overestimated by only 0.11% !! The numbers were nearly identical!
I don't think it was my skill at telling the future.. just lucky. My life changed so much there is no way I could have predicted this except by luck.
I still keep a log with Jan 1 data going back to 2003 when I got married and combined finances.
kuttolas wrote:May I ask, How did you calculate the predicted net worth?
I started keeping track of net worth around 3 years ago. I calculate this every 3-4 months. I keep wondering, if I am saving enough?
I assumed my salary and my wife's salary would increase three percent per year.
I assumed we would keep making the maximum contributions to 401k every year.
I assumed a fixed, after tax contribution to investment accounts every month.
I assumed eight percent return each year on average.
I assumed a certain increase in home equity every year.
There really wasn't any secret other than keeping spending under control so that we could make our investments every month.
It really just came down to maintaining discipline.
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