May 2008 Net Worth
Hi All,
Well, we sat down and did our semi-regular update of our net worth. After we totaled up everything that we have and owe, our current net worth is $393,000, just south of 400k. This is a gain of approximately $30,000 since February or a 5% growth in our wealth overall.
A few comments. First, some of our assets are doing better than others. The overall gain is mostly driven by growth in our self managed stock accounts, by Miel's contributions to her retirement and by paying off our second mortgage. It was partially offset by our taking out an additional - and hopefully last - student loan of $8,500. Savings bonds and precious metals continue to be our portfolio losers.
Second, 393k is just a stones throw away from 400k. While 400k isn't as much as some people have, it is higher than the national average of people in our age bracket (299k) and its 10% of the way towards our net worth goal of $4 million. But more importantly it feels like we are nearing an important milestone and helps to affirm that all our planning and saving has been worthwhile.
Best,
James
6 comments:
Where are you getting that "average" figure of $299k? If this is indeed "average" it's average in the sense that if Warren Buffett were to walk into a sub-Saharan African slum where people live on less than $1 per day, smile genially, and say to the first person he sees: "Say, on average you and I are multi-billionaires."
According to a link found on the CNN.com Personal Finance page, the MEDIAN net worth for an American in the 35-44 age group (which is actually older than you, no?) is less than $50k. Wouldn't median be a more useful figure for your purposes here?
James and Miel:
Congrats on your accomplishment.
I was reviewing the report you included as a link in this post - the number ($229,000) is based upon the survey date and info (2004). What do you think the change/adjustment would be now for 2008?
As a single woman living alone I wonder about the statistics. I have a single income household, I am responsible for all of my own bills. Overall, I think I'm doing okay - I put approximately 20% of my gross income in both my office 401(k) and a Roth IRA. Like the two of you, I have an investment property (rental unit) and the condo I live in. My car is paid for, I have no credit card debt, and my student loans are minimal (I may just pay them off with $$ I receive from my mother's estate).
I'm currently 44 and (idelly) I would be working for another 20 years.... However, poor health and a chronic condition make me wonder if instead of 20+ years in the workforce, I may just have 15 good years left.
While you have the $4 million goal, mine is less ($1 million) (I just won't live as well as you two nor will I travel as much internationally.)
I really appreciate your blog - the information is great. I often consider starting one - it would be focused on my PF issues with the reaility of my medical condition and status... Maximizing my savings now knowing that I may only have 10 to 15 good years physically. What' your thought?
Annie - I'd have to say that it sounds like you are doing excellent. To me it is about living comfortably within your means and not stretching your finances to support and unsustainable lifestyle. It sounds like you are wise in being frugal with health issues. As you know this is a biggie in terms of expenses. Plus it would be nice to give yourself the freedom to retire early.
Good luck with all and keep us posted.
Cheers,
Miel
Anon - I'd also have to agree with you that we are selling ourselves short, or setting our sights high by looking at the average rather than the median.
Also, as I'm thinking about this, I would presume that if we are around a $100k above the average, this would put as doing much better than the median.
We'll just keep plugging along.
Cheers,
Miel
Just a note - I noticed you are counting jewelry as part of net worth. Most real world calculations look at true net worth as investible assets. So ok you can count the gold and silver but if you really want to measure correctly it should be all assets (stocks, bonds, cash, cd's) and nope you cant count your primary residence. Looking at your situation in this way might make you a little sad or it may motivate you even more.
Anon - I think that both jewelery and your residence are subjective aspects of ones net worth.
The privileged American outlook is that you will always have to have these, and often just more and more expensive ones, and thus they are a determent to your net worth rather than contributing towards it.
On the other hand, it depends on how you look at it. A friend of mine grew up in the DRCongo during difficult times. Her and her siblings were separated to various parts of the globe just to get out of dodge. Her mother claims that in such a situation jewelry was her greatest asset. She says that she wouldn't have made it out as easily without the liquidity of jewelry.
So, in most cases, you might not ever go without these assets, but this isn't always the case.
For instance, when I moved from Portland to DC, I sold everything. When we leave DC we also plan on selling it all.
According to your estimates, you wouldn't count cars either, as one might presume that you will always need a car, and thus not to count it. But in our case we don't have one and hope not to in the future.
I guess in the end it is all a matter of perspective.
Miel
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