Comments on: How I Use My Net Worth as a Psychological Carrot

By: Hank

Hank — Sat, 14 Nov 2009 03:04:04 +0000

I think tracking net worth is a great idea. But, on a monthly basis, I get too wrapped up into it. It leads me down the road of watching what the stock market is doing every day, etc. For me, it works better if I track my net worth quarterly.

By: Matt

Matt — Thu, 12 Nov 2009 20:29:45 +0000

What do you do about your home? Other properties, say a home you had before your new one that you can’t sell because of the market? Do you consider your mortgage remainder as part of your debt? Or only “investment” properties? Would you consider any asset to these properties, like appraised values or anything?
Or would you just leave out mortgages altogether?

By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Wed, 11 Nov 2009 19:23:26 +0000

This is an excellent idea, even if tracking is less than perfect.

Having worked in finance/accounting for many years, I knew people who had substantial net worth, but because they didn’t know it, they continued to think and live like poor people. They just worked on their widgets, largely oblivious to what they accumulated.

Some would think this way to the extent that they resented “rich people”, completely unaware that they were among them.

Can you imagine people being miserable for lack of money while have high six and seven figure bankrolls?

If you can’t at least savor the freedom that money can buy, what’s the point of having it?

Worse would be having a negative net and not knowing it. Ignorance may be bliss, but that kind of ingorance has a way of catching up in a nasty way!

By: tammy

tammy — Wed, 11 Nov 2009 18:53:02 +0000

Monetary net worth is a fine thing to score
But don’t forget the finer points of life
Health, family, friends, blessings.
I always love your posts but encourage you to remember the delicate features of life that make it truly worth while!

By: Ryan

Ryan — Wed, 11 Nov 2009 15:47:59 +0000

I use networthiq as well as my personal Microsoft Money file.

I assume that networthiq isn’t REALLY a good way to compare against others though, since most likely on the financially literate or above-average are using it.

By: Andy

Andy — Wed, 11 Nov 2009 14:50:58 +0000

I have been tracking my net worth for the past 15 months on networthiq.com

It breaks down your assets into categories such as cash, stocks, bonds, retirement accounts, house, cars, etc. It also breaks down your debts. You can ‘keep score’ with people that are similar to you (education, age, location, income, etc.)

By: Do You Dave Ramsey?

Do You Dave Ramsey? — Wed, 11 Nov 2009 11:20:30 +0000

More great work Trent… but are you reading my mail?? I wrote a very similar article on Net Worth recently. Ha, I’m just happy to be sharing thoughts with you. I respect your work and what you’ve built. You’re the model Trent… keep it up!

Dave

By: David/Yourfinances101

David/Yourfinances101 — Wed, 11 Nov 2009 10:39:43 +0000

I agree. Keeping score against others is not productive. Keeping score against yourself, maybe.

I tend to lean more towards goal-setting than actual score keeping. If I were to keep score, I think it would be done more on a quarterly basis than any shorter period of time.

I tend to do my “score-keeping” around tax tine each year.

I look at my savings and I loook at my investment portfolio, just to see how I rack up over the previous year.

By: Ken

Ken — Wed, 11 Nov 2009 08:47:34 +0000

I have done this but it’s been 5 months or so. I need to pull that spreadsheet back up. I agree that we need goals and need to see results regularly.

By: Amy

Amy — Wed, 11 Nov 2009 02:45:46 +0000

I just let Mint tell me my net worth.

By: traineeinvestor

traineeinvestor — Wed, 11 Nov 2009 01:20:13 +0000

I also track net worth each month as a means of keeping motivated and keeping track of progress towards my target retirement number. Since fluctuations in the values of investments and exchange rates usually have a greater effect than savings, I track my savings each month separately since that is something I do have greater control over.

The question of whether an owner occupied home should be included in net worth calculations or not gets raised by various bloggers from time to time. I have yet to see a credible reason for not including it – at the end of the day it is an asset, it has value and that value can be realised.

Regarding disclosing net worth, I suspect you will find that most people (whose family name is not “Trump”) with a meaningful net worth would prefer not to have their personal finances disclosed to the public. The only exception I can think of is Adrian at 7million7years. I have no intention of ever putting my net worth numbers on public display.

By: karyn

karyn — Tue, 10 Nov 2009 23:32:32 +0000

You can tell you’re into baseball and stats, LOL!

By: Alex

Alex — Tue, 10 Nov 2009 23:30:09 +0000

Trent used to post his networth figures as percentage improvements versus the previous month (which avoided disclosing actual dollar figures) but stopped, I’m guessing b/c such percentage figures are pretty useless.

Seeing as his name and identity are not anonymous, I can’t say as I blame Trent for not disclosing his networth. Most people (including myself) like to look at pf bloggers’ net worth purely for competitive reasons, and I think Trent justifiably doesn’t feel the need to foster that.

By: Gabriel

Gabriel — Tue, 10 Nov 2009 22:59:37 +0000

This is exactly what I do. I know this sounds pretty lame, but I’ve actually come to look forward to getting my bank statement at the end of the month. I love seeing how much I have left over from bills to “sock away” and earn interest somewhere. It’s a fun and powerful feeling, and then I get to move on with my life rather than fretting every time a bill comes in.

By: Kevin

Kevin — Tue, 10 Nov 2009 22:54:09 +0000

@Kevin M – you know more than me. I was only speculating. I hope I’m right for Trent’s sake. Of course I could be wrong – I really don’t know.

By: Kevin M

Kevin M — Tue, 10 Nov 2009 22:24:02 +0000

I’d also like to know if you track the value of your portfolio and the ups and downs of the market?

@Kevin (the other one) – Trent said a few months ago his net worth went negative since he quit counting his house as an asset. I believe his goal at that time was to get it back into the black without his house added in, but with the mortgage deducted. Correct me if I’m wrong, Trent.

By: George

George — Tue, 10 Nov 2009 22:18:06 +0000

I quit measuring net worth in taxable accounts and started tracking income from investments. First goal is to get the equivalent of a minimum wage salary from the investments!

By: chacha1

chacha1 — Tue, 10 Nov 2009 22:16:16 +0000

My score card is entirely based on whether I met the targets on my spending plan. Because my net worth is so teeny it’s barely worth thinking about. :-) Sticking to my plan will, eventually, give me something that IS worth thinking about. I doubt I will ever tie it to macro-economic factors, though.

I do dig the thirty-day projects. I’m making a note about that right now … .

By: Kevin

Kevin — Tue, 10 Nov 2009 22:11:26 +0000

I know it’s none of my business – but the payoff to this article would have been your net worth. Judging from the tremendous success of your blog I’m guessing 7 figures. Yes, I’m jealous, but I’m still happy for you.

By: Steven@hundredgoals.com

Steven@hundredgoals.com — Tue, 10 Nov 2009 21:32:17 +0000

I’m curious about your goal of traveling to Europe. You calculate your net worth every month but what are you doing to plan for that trip? Is there a specific goal you are trying to reach before making the trip?

I know it sounds irresponsible to say “Just do it!” but at some point you will have to take action and get out of the planning phase in order to make the trip a reality.

Is it a question of “feeling guilty” for spending money for something so extravagent? I’m really curious about your thought process on this aspect of your life. You spend so much time talking about frugality and simplicity but what about your other goals?