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End of Year Net Worth

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  • Avatar Dicast 
    Participant
    Status: Physician
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    Joined: 01/09/2016

    Last year I said I would start an excel file for tracking yearly net worth after reading a lengthy bogleheads net worth post.  I had been fed up with the bugs in online trackers that altered the historical numbers when accounts are deleted/transferred and such.  I know everyone here is very financially minded but at the same time in crazy different parts of their careers.  I think it is valuable to see the effects of saving over time. I’m 4.5 years out with a spouse just 6 months into her attending job.  I include home equity in my net worth and adjust my “retirement number” accordingly.  We actually bought a house this year so I’m biased to not let the downpayment disappear but overall our net worth would have been better had we just stayed renting (no regrets on the house though).  So without further rambling.

    End of Year Net Worth:

    2014: no accurate records but it was significantly less than 0

    2015: $25k

    2016: $246k

    With these numbers I reviewed the current financial state of the house with my wife and can probably leave her alone unless we finish paying off loans or we hit next year’s recap.  If we can stay on this trajectory I don’t really have any concerns about saving enough.  I’ll post an update next year.

    Get outside of your bubble.

    #32049 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4596
    Joined: 05/13/2011

    Congratulations on a big move in the right direction!

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #32050 Reply
    Zaphod Zaphod 
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    Status: Physician, Small Business Owner
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    Joined: 01/12/2016

    I have done the same as its helpful to see where you’ve made progress and where you want to be. I also include home equity since its real and accessible. For myself, Im not the standard WCI debt crusher and pay barely above minimum payments on student loans. I have been focusing on increasing overall assets. This year I will just consolidate after buying 2 houses last year and just finishing one up for rental.

    2013: No perfect data, though plan to reconstruct it, however, very bad

    2014: -456k

    2015: -320k

    2016: -148k

    Goal is to get to zero next year. Would be very close just on our normal path but am hoping to get there with some effort.

    #32065 Reply
    Avatar meccos 
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    Status: Physician
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    Joined: 03/09/2016
    Splash Refinancing Bonus

    When you guys calculate net worth do you consider the mortgage on your home to be a negative value towards your net worth?  So for example, if you owe 400K on your mortgage do you subtract 400K from you overall net worth?

     

     

    #32067 Reply
    Zaphod Zaphod 
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    Status: Physician, Small Business Owner
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    When you guys calculate net worth do you consider the mortgage on your home to be a negative value towards your net worth?  So for example, if you owe 400K on your mortgage do you subtract 400K from you overall net worth?

     

     

    Click to expand…

    Yes. Net worth is simply assets-liabilities. Assets are what you own; stock equity, home value, checking/savings balances, etc…while liabilities are what you owe; student loans, cc debt, mortgage, etc…

    So on one side of the ledger the house value is an asset, while the mortgage is a liability. Whatever is left is the equity you have (positive or negative). So while the above shows my extremely negative net worth what is masked in there is quite a bit of assets, and in probably just 2 years time there will be a significant swing in the opposite direction. Doing the spreadsheet this year (with addition of second house) was very enlightening. Hoping it gets rented soon.

    #32068 Reply
    Avatar MochaDoc 
    Participant
    Status: Physician
    Posts: 239
    Joined: 08/25/2016

    End of 2016: $95.64

    A positive net worth is what I wanted for Christmas.

     

    “Money is numbers and numbers never end. If it takes money to be happy, your search for happiness will never end.”

    ― Bob Marley

    Avatar Dicast 
    Participant
    Status: Physician
    Posts: 415
    Joined: 01/09/2016

    End of 2016: $95.64

    A positive net worth is what I wanted for Christmas.

    Click to expand…

    It is quite a feeling.  Good job and Merry Christmas!

    When you guys calculate net worth do you consider the mortgage on your home to be a negative value towards your net worth?  So for example, if you owe 400K on your mortgage do you subtract 400K from you overall net worth?

    Click to expand…

    I take net worth as ALL liabilities against assets (excluding 529 and depreciating assets like cars) so I definitely subtract the mortgage from the value of the home.  I also try to be conservative on the valuation of our home to not inflate the numbers.  I’d hate to go looking for money and find it wasn’t there.  Over time I expect the house to be less of an overall impact on the net worth as we’ll have more in retirement accounts by the end of next year than we owe on the house anyway (as long as there isn’t a disturbance in the market).

    Get outside of your bubble.

    #32101 Reply
    Liked by hatton1, MochaDoc
    Avatar pulmdoc 
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    Joined: 09/19/2016

    Is there a reason you don’t include 529 accounts in the net worth? I treat them just like other qualified accounts since they can be liquidated if necessary (for a penalty of course) and I can control the asset allocation. I definately include home equity in the equation with the knowledge that home value is not a mark-to-market situation like securities and so is more of an estimate than an exact number. What I struggle more with is whether to include high value tangible assets (cars, jewelry, etc) which clearly have monetary value but I am highly unlikely to liquidate in order to spend on something else unless absolutely necessary.

    #32114 Reply
    Avatar Dicast 
    Participant
    Status: Physician
    Posts: 415
    Joined: 01/09/2016

    Is there a reason you don’t include 529 accounts in the net worth? I treat them just like other qualified accounts since they can be liquidated if necessary (for a penalty of course) and I can control the asset allocation. I definately include home equity in the equation with the knowledge that home value is not a mark-to-market situation like securities and so is more of an estimate than an exact number. What I struggle more with is whether to include high value tangible assets (cars, jewelry, etc) which clearly have monetary value but I am highly unlikely to liquidate in order to spend on something else unless absolutely necessary.

    Click to expand…

    I think it is most important to be consistent across years for comparison, so if you include a 529 plan, I think that is fine.  I don’t include the 529 because I fully intend on that money to be spent on education but I do have a separate line on my spreadsheet to track the progress of savings.  I don’t include cars because I expect they won’t be worth much when I’m done with them and I don’t really care to track something to zero.  Tracking high value jewelry or other things is probably too detailed for my purposes and probably not with my general thought processes involving wealth building.  Most purchases come at the expense of investing.  When I purchase something, for example my HD projector for my media room, I would have a hard time rationalizing that my purchase is somehow maintaining my net worth when it is very much a consumption item.  If you are purchasing high dollar art or jewelry to diversify your investments, then I would recommend adding it to the net worth but above all stay consistent so you can honestly track your progress.  I try to keep this simple so that I’ll keep up with it.

    Get outside of your bubble.

    #32123 Reply
    Avatar chris1515 
    Participant
    Status: Physician
    Posts: 12
    Joined: 10/31/2016

    At the beginning of this year I realized that my wife and I needed to start tracking our monthly net worth.  We were starting very far behind and needed to be sure we stayed on the right path.  After my wife and I earned a total of three post graduate degrees, we also had accrued a lot of debt.  Here are the numbers.

     

    Jan 1st 2016     Net Worth = -692,000

    Dec 30th 2016    Net Worth = -509,800

     

    Total improvement throughout the year ~183,000  (full disclosure, just got an unpleasant letter from CPA which will probably knock that down by 25k)

     

    Overall, this has been a good year, I am hoping to improve on this next year and make a 200,000 improvement to net worth, overall goal is to be financially independent at 55 years old.  I appreciate all of the information on the site and the educational discussions in the forums.  I still have a long road ahead, but this year was a good first step in the right direction.  I wish somebody had handed me a copy of the WCI book on my first day of residency, I would never be this far behind.

     

    Happy New Year

    #32126 Reply
    Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 3486
    Joined: 01/21/2016

    I do not include 529 account or UTMA balances in my net worth. This is money that is considered to be spent.

    I do not include the wholesale or other value of my vehicles. I consider these to be depreciating assets, so I might as well write them down to zero.

    I do not include the value of my (paid off) home–I guess I could, but I have to live somewhere!

    The piano is too hard to move, and who knows if anyone will even buy it. The art is illiquid and has some fragility–why not just enjoy it. Etc.

    I do not include jewelry because I do not know how to value it, and it is not likely to be sold by me. If I sell an old watch (which I did earlier this year- $250) or scrap quality gold/silver (which I also did earlier this year), I can add the balance to my bank/investing account as a “bonus”.

    If you look around your home, there’s probably a lot of stuff that you could monetize, so if it makes you feel better, add a misc category for $10k.

    I will do my net worth calc on 1/1 (I always do it then) and post the delta.

    #32127 Reply
    Liked by hatton1
    DMFA DMFA 
    Moderator
    Status: Physician
    Posts: 2136
    Joined: 06/24/2016

    I count my son’s 529 because it puts my net worth over zero…maybe I’ll leave it out next year.

    "I like money." - Frito Pendejo (Idiocracy)

    [Not a financial professional (yet), lawyer, or employee of The White Coat Investor]

    #32132 Reply
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
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    Joined: 01/12/2016

    I also only do big things. All debt, etc…but just just cash accounts, investments, and home equity since it can technically be accessed and once you start having investment properties it just makes sense. No cars as theyre basically worthless when finished, and nothing else either. Just the big picture, no benefit in getting granular and in all likelihood you’re simply fooling yourself.

    #32133 Reply
    Avatar Noah 
    Participant
    Status: Physician
    Posts: 42
    Joined: 01/09/2016

    Deleted – too much personal information online.

    #32135 Reply
    Liked by CM
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4596
    Joined: 05/13/2011

    I was just doing my calculation for end of the year.

    It’s been a heck of a year for us. I’m almost embarrassed to post it. I mean, it’s relatively easy to post stuff online when you’re still getting back to broke and you’re anonymous. But when you’re doing very well and not so anonymous, perhaps not so easy.

    I figure our net worth increased by a 7 figure amount. Lots of stuff factoring in:

    • Serious house appreciation
    • Big pay-off of our debt
    • Great investment returns
    • Large amount of new savings
    • Significant business appreciation

    No one thing really. All that stuff contributed about equally. The last couple of years definitely feel like the snowball is now rolling on its own.

    I don’t count stuff (cars, toys, jewelry etc), but I do count the kids’ 529s and UGMAs. Probably should consider that spent money but that’s just the way I’ve always done it.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #32137 Reply

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