How's this for a touchy subject: Household Net Worth?

[2squared]

I know my household net worth since I am the one doing the income tax forms and also did the US census detailed (2nd round) forms which ask a lot more information than IRS.

However I prefer to count only liquid assets. My home value goes up and down and I may not be able to liquidate it when I need the cash so I don't bank on it.

 

 

 

For a double income "young" family earning slightly over $200k before tax, bulk of the income goes to paying off their mortgage, infantcare/childcare expenses, state and federal taxes, property tax, insurance (employee portion), social security, state disability insurance, 401k and others.

Also not saving money is relative, it depends on how the survey question is worded. Just a silly example, if you ask my neighborhood children if they are saving money and even $1 counts, you will probably get a 100% rate for kids over 5 years old because they bank their allowance (including piggy bank).

 

 

Paying off a mortgage builds net worth, right? A 401K is savings, is it not?

 

A young family making $200K spends a lot on the things you mentioned, but they should be able to squeeze savings into the list too. We squeeze savings out of a much smaller number, and when our "young" family with 5 kids has two incomes making less than $200K, we will still save despite paying everything on the list.

[justamouse]

Financial knowledge is freedom. You know, I had nothing once, too--actually, I had two garbage bags full of clothes. That was my entire worth. But I did have a person in my life who told me how to manage $ and plan, and I didn't scorn them because they had $, I appreciated their information. Had I begrudged them because I had less, we wouldn't have what we have now.

[2squared]

I couldn't care less. There are a million things that could happen that make net worth completely irrelevant, no matter how much one plans. I can't believe people actually sit around and compare specific net worth. How tasteless.

 

 

Yes, a million things may happen (but probably won't happen) to make net worth completely irrelevant, but most people find building assets to be beneficial. I don't know of anyone who was disappointed to have assets to live off of when they can no longer work.

 

I also don't know of anyone who compares specific net worth, and if they did, I wouldn't care. I am inspired by people who are able to do more with less than we have, and I have learned a lot in my lifetime from people willing to talk about finances. Ironically, I am also inspired by people who do less with more than we have - inspired to keep walking our path and not join their path.

[2squared]

Financial knowledge is freedom. You know, I had nothing once, too--actually, I had two garbage bags full of clothes. That was my entire worth. But I did have a person in my life who told me how to manage $ and plan, and I didn't scorn them because they had $, I appreciated their information. Had I begrudged them because I had less, we wouldn't have what we have now.

 

 

Yes, exactly. When I graduated college I had nothing other than some clothes, an education, and a job. Luckily I also had no debt. That was 18 years ago, and over the years we have proactively worked toward financial freedom. We've had some lucky breaks and we've made some bad decisions (mostly dh :laugh: ). As I get older, I get wiser (thank goodness!), and I now seek out wiser people than me so I can learn and continue to build what we have.

[Mama Geek]

Also discussing things with people can also sometimes help. Years ago we were in Costco buying a bedroom set that we really liked. We spent a fair amount of time waiting and we ended up talking to an associate for awhile. A few years later she came up to us and said that she remembered our discussion of waiting to buy just what we wanted until we had the cash to pay for it. (We had hand me down furniture up until that point that had been given to us or we had bought cheap and used.) She said that she was applying that to her life and that it was making a difference. Dh and I remembered her, but had no idea that we had such an impact on some one just because we were excited to be buying our first furniture just because it was what we wanted and we had the money to buy it. We had probably been married 10 years or more at that point.

[Audrey]

I couldn't care less. There are a million things that could happen that make net worth completely irrelevant, no matter how much one plans. I can't believe people actually sit around and compare specific net worth. How tasteless.

 

 

 

Well... I didn't read the OP as a comparison of numbers. Maybe I missed some subtext there. I did answer the poll and explained why I track it.

 

And let me tell you ... it is very possible to have a significant net worth, yet not have much $$ to spend. The farm is a huge asset. But, I can't spend it. Also, because the whole point of buying the farm was to secure it for future generations (and this is the 5th generation to farm it!), I can't sell it. What I can do is spend a lot of resources -- time, energy, and lots of money -- trying to hang on to that huge asset. It's worth can't be measured in mere $$. I would gather that I'm probably not the only one on these boards who has such an asset -- which is almost, at times, more of a financial burden than a financial asset. Numbers don't make you wealthy, and it's a fool who thinks he is above reproach or eminent disaster just because he has big numbers.

 

Now... if this thread really is all about whipping out the financial equivalent of your wangs and measuring up, then I'll shut up an walk away because that's a b---s--- game.

[Mergath]

 

Yes, a million things may happen (but probably won't happen) to make net worth completely irrelevant, but most people find building assets to be beneficial. I don't know of anyone who was disappointed to have assets to live off of when they can no longer work.

 

I also don't know of anyone who compares specific net worth, and if they did, I wouldn't care. I am inspired by people who are able to do more with less than we have, and I have learned a lot in my lifetime from people willing to talk about finances. Ironically, I am also inspired by people who do less with more than we have - inspired to keep walking our path and not join their path.

 

 

Probably won't happen? Tell that to all the people who lost everything when the market crashed. All that time they spent "wealth-building," all wiped away in a matter of days. We have what we need, and don't feel the need to sit down and figure out how much our accumulation of stuff is worth. We definitely don't need to compare it to anyone else's accumulation of stuff. The idea that we all have to be obsessed with money and investments and net worth and take classes on it and have spreadsheets and computer programs and so on ad nauseum is simply clever marketing on the part of the financial industry. But everyone has different priorities in life.

[Mergath]

Well... I didn't read the OP as a comparison of numbers. Maybe I missed some subtext there. I did answer the poll and explained why I track it.

 

And let me tell you ... it is very possible to have a significant net worth, yet not have much $$ to spend. The farm is a huge asset. But, I can't spend it. Also, because the whole point of buying the farm was to secure it for future generations (and this is the 5th generation to farm it!), I can't sell it. What I can do is spend a lot of resources -- time, energy, and lots of money -- trying to hang on to that huge asset. It's worth can't be measured in mere $$. I would gather that I'm probably not the only one on these boards who has such an asset -- which is almost, at times, more of a financial burden than a financial asset. Numbers don't make you wealthy, and it's a fool who thinks he is above reproach or eminent disaster just because he has big numbers.

 

Now... if this thread really is all about whipping out the financial equivalent of your wangs and measuring up, then I'll shut up an walk away because that's a b---s--- game.

 

 

I was referring to the op's story about moms sitting around comparing net worth. I got the impression they were comparing.ETA: Also, isn't that always how these threads end up? Someone with an impressive number will get into specifics, and then everyone else throws out their numbers, and before you know it people are having a giant pissing contest. Ugh.

[Mergath]

Sorry, I'm having issues with my posts today. But I just wanted to add that if it isn't about comparing net worth, the op's poll would be rather pointless. It would seem that we all need to see how many people have more or less, so that we can feel appropriately better or worse about ourselves.

[LMD]

Well... I didn't read the OP as a comparison of numbers. Maybe I missed some subtext there. I did answer the poll and explained why I track it.

 

And let me tell you ... it is very possible to have a significant net worth, yet not have much $$ to spend. The farm is a huge asset. But, I can't spend it. Also, because the whole point of buying the farm was to secure it for future generations (and this is the 5th generation to farm it!), I can't sell it. What I can do is spend a lot of resources -- time, energy, and lots of money -- trying to hang on to that huge asset. It's worth can't be measured in mere $$. I would gather that I'm probably not the only one on these boards who has such an asset -- which is almost, at times, more of a financial burden than a financial asset. Numbers don't make you wealthy, and it's a fool who thinks he is above reproach or eminent disaster just because he has big numbers.

 

Now... if this thread really is all about whipping out the financial equivalent of your wangs and measuring up, then I'll shut up an walk away because that's a b---s--- game.

 

 

Thanks for this post Audrey, I found it inspiring! We have just sunk a bunch of our liquid assets into a secure asset like this, we figure that these things (farms/homesteads etc.) didn't just spring up out of nowhere - someone has to be the first generation, right? Of course just after we signed the contract there was a bushfire in the area, about 1km away. Nothing is ever guaranteed!

 

 

Other than that, in liquid assets we are pretty poor - :lol: A small credit card debt but otherwise no debt at all.

 

Retirement savings is an interesting one, here we have compulsory superannuation contributions. Most people spend their 30's & 40's paying off a mortgage so they have a secure housing asset & won't have to worry about paying rent in retirement, then spend their 50's onward putting that money into their superannuation accounts &/or other financial investments. We are not yet near our 40's or 50's - and by that stage we'll likely have 2 incomes again - so we're not in save for retirement mode yet, we're in the 'build up business and house' stage.

 

DH & I do keep a general track of where our finances are. Neither of us feel comfortable when we get too close to the wire (incomes v outgoings). However, we do not stress about money. We're on the same page, we know where we are and where we want to go so we just keep going, what else is there to do?

 

I have no problems discussing money. No big deal to me.

[Melissa in Australia]

Sorry, I'm having issues with my posts today. But I just wanted to add that if it isn't about comparing net worth, the op's poll would be rather pointless. It would seem that we all need to see how many people have more or less, so that we can feel appropriately better or worse about ourselves.

 

:huh:

 

I didn't read it like that at all. And I don't view the whole thread in that light.

 

The reason I know the value of my assets is because I need to enter it onto forms all the time, not because I gloat on it.

[Catwoman]

Probably won't happen? Tell that to all the people who lost everything when the market crashed. All that time they spent "wealth-building," all wiped away in a matter of days. We have what we need, and don't feel the need to sit down and figure out how much our accumulation of stuff is worth. We definitely don't need to compare it to anyone else's accumulation of stuff. The idea that we all have to be obsessed with money and investments and net worth and take classes on it and have spreadsheets and computer programs and so on ad nauseum is simply clever marketing on the part of the financial industry. But everyone has different priorities in life.

 

If those people had been more sensible about managing their money, that wouldn't have happened. Sure, they may have still lost some money, but most of the people who "lost everything" were looking for unrealistically high returns on their investments, and as such, put too much of their money into high-risk investments. Their portfolios weren't balanced.

 

I know that many people say they don't worry about money or that they spend what they make because they're not worried about the future, but if they suddenly become ill or injured or unable to work -- or worse yet, if one of their kids develops a serious medical problem -- I can't imagine that they wouldn't look back and wish they'd paid a bit more attention to their finances and tried to put a few dollars aside here and there. As much as many people seem to want to deny it, money does matter in life. I'm not saying that everyone should want to be wealthy, but that it seems pretty foolhardy to not care at all about what you'll do in the future if you don't try to put at least a little bit of money away when you can.

 

I don't think anyone needs to be obsessed with their money or investments. Unless you're a billionaire, it's not exactly a full-time job. Honestly, it's not even a part-time job -- if you're relatively organized, it doesn't take very long at all.

 

I do agree with you, though, that there's no need to compare who has more or less money than anyone else, but I don't think that was the OP's goal when she started this thread -- and I don't see anyone getting competitive with each other about who has the highest net worth.

[Catwoman]

Sorry, I'm having issues with my posts today. But I just wanted to add that if it isn't about comparing net worth, the op's poll would be rather pointless. It would seem that we all need to see how many people have more or less, so that we can feel appropriately better or worse about ourselves.

 

I think you're right that the OP's poll would have been better without the "how much $$$ do you have" section. (I didn't respond to any of it, because I don't think it's anyone's business, but I'm interested in the discussion.)

 

If the dollar amounts hadn't been specified in the poll, we would have been talking only about whether or not people kept track of their net worth, and how they felt about it. The actual monetary amounts don't matter, anyway, but by including them in the poll, I'm sure it did make people feel better or worse about their own situations when they compared themselves with what others posted, and I think that was unnecessary.

 

One thing, though -- when it comes to money and net worth, let's all remember that a lot of people lie about stuff like that. (And hardly anyone ever says they have a lot less than they really have, unless they're filling out a financial aid application, so I think the "how much is your net worth" numbers should be taken with a grain of salt. :D)

[Jane in NC]

Sorry, I'm having issues with my posts today. But I just wanted to add that if it isn't about comparing net worth, the op's poll would be rather pointless. It would seem that we all need to see how many people have more or less, so that we can feel appropriately better or worse about ourselves.

Sorry you feel that way.

 

Over the years there have been some peculiar posts and threads on all sorts of glimpses into the lives of fellow boardies. Bathroom habits, dietary habits, number of this or that in the pantry or the closet. Perhaps there is some self righteousness associated with having or not having something. For the most part though I see these posts as curiosity about the community.

 

Some people are curious about some very strange things--strange to me at least. There are numerous threads that I do not open. But certain financial things interest me. I saw the poll as a glimpse into demographics. And I'd rather read about financial stuff than some of those "not for the squeamish" kinds of threads.

[Catwoman]

Whether you do or don't keep track of your finances, you still can't be "sure" you'll always have anything. Besides, thinking too much about money depresses me - whether I'm in the black or the red. I have certain "relatively safe" funds designated to certain things (my kids' education being the biggie). Other than that I don't try to project what I'll be able to spend in the future.

 

 

I agree, but if you do keep track of your finances, you are a lot more likely to have more than someone who doesn't keep track. It's very difficult to be financially solid for the long term without knowing what you have and how it's invested. And it's tough to build your net worth if you're not paying attention to how much you make, how much you spend, and how much you save (and how you're investing those savings.)

[Catwoman]

I was referring to the op's story about moms sitting around comparing net worth. I got the impression they were comparing.ETA: Also, isn't that always how these threads end up? Someone with an impressive number will get into specifics, and then everyone else throws out their numbers, and before you know it people are having a giant pissing contest. Ugh.

 

 

I didn't get the impression that anyone was comparing, but you are absolutely right that if one person mentions a number, someone else is going to feel compelled to mention a higher number... and within a few short pages, it will turn out that at least 20 people here are wealthier than Bill Gates. :rolleyes:

 

I hate it when things get competitive like that. And some people will compete about anything. I hope this thread doesn't go in that direction.

[Catwoman]

Sorry you feel that way.

 

Over the years there have been some peculiar posts and threads on all sorts of glimpses into the lives of fellow boardies. Bathroom habits, dietary habits, number of this or that in the pantry or the closet. Perhaps there is some self righteousness associated with having or not having something. For the most part though I see these posts as curiosity about the community.

 

Some people are curious about some very strange things--strange to me at least. There are numerous threads that I do not open. But certain financial things interest me. I saw the poll as a glimpse into demographics. And I'd rather read about financial stuff than some of those "not for the squeamish" kinds of threads.

 

 

I really could have lived without knowing some of the bathroom habits. ;)

 

Just a little tip for anyone thinking of starting a new thread tonight:

 

Yes, there really is such a thing as TMI.

[justamouse]

Well... I didn't read the OP as a comparison of numbers. Maybe I missed some subtext there. I did answer the poll and explained why I track it.

 

And let me tell you ... it is very possible to have a significant net worth, yet not have much $$ to spend. The farm is a huge asset. But, I can't spend it. Also, because the whole point of buying the farm was to secure it for future generations (and this is the 5th generation to farm it!), I can't sell it. What I can do is spend a lot of resources -- time, energy, and lots of money -- trying to hang on to that huge asset. It's worth can't be measured in mere $$. I would gather that I'm probably not the only one on these boards who has such an asset -- which is almost, at times, more of a financial burden than a financial asset. Numbers don't make you wealthy, and it's a fool who thinks he is above reproach or eminent disaster just because he has big numbers.

 

Now... if this thread really is all about whipping out the financial equivalent of your wangs and measuring up, then I'll shut up an walk away because that's a b---s--- game.

 

 

 

So true, and when you're building something generational, the responsibility is enormous. You don't want to be the idiot that lost it all. And that's not dwelling on how much you have, or the temporal, it's planning for the generations that come after you which is pretty selfless. Stewardship is a lot of responsibility.

[2squared]

If those people had been more sensible about managing their money, that wouldn't have happened. Sure, they may have still lost some money, but most of the people who "lost everything" were looking for unrealistically high returns on their investments, and as such, put too much of their money into high-risk investments. Their portfolios weren't balanced.

 

 

Both my parents lost quite a bit in that crash, and they both had to push out their retirement dates. I saw it coming, and my brother, dh & I often talked about how risky they were invested. After the crash my mom is now putting her money into paying off her house whereas before she was purposely keeping her mortgage so she could invest in single stocks. My dad invested in real estate and lost most of his retirement. My mom tried so hard to convince to invest like she did - and I stubbornly refused. I am perfectly OK with solid, long-term performance. Anything which glitters is not gold.

 

They have less now than they did before, but I am sure they are glad they still have something. At least they can retire, even if they had to push it out a few years. If they hadn't saved anything, they would be pushing 60yo will no ability to slow down or stop working. Now they are putting away even more than they did before, so I guess having lost everything or even a lot didn't convince them to give up. Instead, they are convinced to invest prudently and invest even more than they were before.

[TravelingChris]

I just want to really, really agree with Audrey. You can have a high net worth but low liquid assets. For example, I have relatively liquid assets in the ten thousand column but even there, I get penalized if I use about half of them right away and I really don't want to use any of them in regular course of business. Of course, if I really needed to use them- I couldn't borrow any money and I needed it right away for something like taking a medical trip, getting unreuimbursed high cost medical supplies, whatever emergency, yes, I would use them. But my everyday reality is higher net worth than I can access now and tight everyday budget. Of course, it isn't as tight as someone on unemployment but as someone who has been losing ground to inflation with pay raises that don't match inflation at all, each year is getting harder. Which is why I am so interested in getting dh to retire from the military, get his retirement and get another job. It would stop me from worrying how to afford very costly tree removal (last year they needed to bring in a crane to remove it and it cost thousands, and I have another tall tree this year that threatens the house which is not looking like it is leafing out).

 

LIke Audrey said, having a higher net worth than what would appear by your bank balance at a given time, is a comfort for tough times.

[Kari C in SC]

Also discussing things with people can also sometimes help. Years ago we were in Costco buying a bedroom set that we really liked. We spent a fair amount of time waiting and we ended up talking to an associate for awhile. A few years later she came up to us and said that she remembered our discussion of waiting to buy just what we wanted until we had the cash to pay for it. (We had hand me down furniture up until that point that had been given to us or we had bought cheap and used.) She said that she was applying that to her life and that it was making a difference. Dh and I remembered her, but had no idea that we had such an impact on some one just because we were excited to be buying our first furniture just because it was what we wanted and we had the money to buy it. We had probably been married 10 years or more at that point.

 

 

I agree with you on this. 19 years ago, I was a 22 year old in a new accounts payable position. I was working for a 22 year old working on his CPA. He decided to share his knowledge of amortization tables with me. We spent some time talking about what he had learned in college. He asked me if I had credit card debt. I told him my dh and I had $8000 on a credit card. He put together an amortization table and showed me what I was paying and how long it would take to pay off. Then he challenged me to pay it off. It took 10 months, but we paid it off and have never carried a balance since then. I worked with him for 3 years and learned a lot talking to him, but the amortization tables have come in handy many, many times. He changed our lives that afternoon discussing personal finances.

 

[Mergath]

I didn't get the impression that anyone was comparing, but you are absolutely right that if one person mentions a number, someone else is going to feel compelled to mention a higher number... and within a few short pages, it will turn out that at least 20 people here are wealthier than Bill Gates. :rolleyes:

 

I hate it when things get competitive like that. And some people will compete about anything. I hope this thread doesn't go in that direction.

 

 

I've just seen soooo many threads go that way, and it always ends with people talking about the wonderful, hard-working rich and the lazy, mooching poor who steal from all the decent people. Anytime I see a thread start with a poll that asks how much money we have, it puts me right on edge. I probably wouldn't even have said anything if that poll hadn't been there, but I saw that and rolled my eyes so hard I think I strained something. I'm trying to breathe away my frustration now, lol.

[Sun]

I was referring to the op's story about moms sitting around comparing net worth. I got the impression they were comparing.ETA: Also, isn't that always how these threads end up? Someone with an impressive number will get into specifics, and then everyone else throws out their numbers, and before you know it people are having a giant pissing contest. Ugh.

 

 

OP here. We weren't sitting around comparing. Does anyone really do that? I have a very hard time picturing that with anyone I know. "Oh, we have $XXXX." "Oh, really? Well, we have $XXXXXX!" I just really can't picture that kind of conversation happening. The actual discussion was more along the lines of worrying about retirement and someone mentioning net worth, which led to a side discussion of how you calculate it and why you should know it for future planning, including planning for college expenses and retirement. No one mentioned numbers---the closest anyone got was one mom saying that she tracked it regularly and she liked watching it grow. She didn't say any amounts, though, so it didn't strike me as competitive. The whole concept was a new idea for me, and as I said upthread I was a little surprised that it had never crossed my mind before. I know that sounds bizarre, but there it is.

 

I was also not imagining that anyone would post their net worth, even in round terms on this thread. I was much more curious about people's thoughts about knowing it. The poll was just because I like polls, and I find it interesting to see the range of responses. It's private because I don't think anyone needs to know anyone's vote--that's just creepy to me!

[Sun]

I'll also say that since that original conversation, I've realized how tracking it could help lead me to better financial habits. Being aware of our situation (where we are vs. where we'd like to be) can only help us make better choices.

[Catwoman]

I'll also say that since that original conversation, I've realized how tracking it could help lead me to better financial habits. Being aware of our situation (where we are vs. where we'd like to be) can only help us make better choices.

 

:hurray: :hurray: :hurray:

 

I think that is the main benefit of keeping track of your finances -- you can't make better choices, or plan for your future, if you don't know where you are today.

[SKL]

Sorry, I'm having issues with my posts today. But I just wanted to add that if it isn't about comparing net worth, the op's poll would be rather pointless. It would seem that we all need to see how many people have more or less, so that we can feel appropriately better or worse about ourselves.

Except that some of us, myself included, didn't vote in the poll. It's one thing to compare numbers, another to discuss philosophy on the focus on wealth building.

[Catwoman]

I've just seen soooo many threads go that way, and it always ends with people talking about the wonderful, hard-working rich and the lazy, mooching poor who steal from all the decent people. Anytime I see a thread start with a poll that asks how much money we have, it puts me right on edge. I probably wouldn't even have said anything if that poll hadn't been there, but I saw that and rolled my eyes so hard I think I strained something. I'm trying to breathe away my frustration now, lol.

 

Then, of course, there are the threads about the greedy, evil wealthy people, who make their money off the backs of the kind, decent, hardworking poor people... :rolleyes:

 

I hate both kinds of threads. Neither are accurate, and both types of threads end up with people getting their feelings hurt.

[Mergath]

Then, of course, there are the threads about the greedy, evil wealthy people, who make their money off the backs of the kind, decent, hardworking poor people... :rolleyes:

 

I hate both kinds of threads. Neither are accurate, and both types of threads end up with people getting their feelings hurt.

 

That's very true.

I hate money. Can we just go back to trading chickens for shoes or whatever? :p

[SKL]

 

I agree, but if you do keep track of your finances, you are a lot more likely to have more than someone who doesn't keep track. It's very difficult to be financially solid for the long term without knowing what you have and how it's invested. And it's tough to build your net worth if you're not paying attention to how much you make, how much you spend, and how much you save (and how you're investing those savings.)

 

Perhaps, perhaps not. I have done both at different times in my life. The difference I noticed is that I was more unhappy when tracking my money closely. It made me feel nervous every time I spent a penny I didn't need to spend. Every discretionary penny was making it take longer for me to reach financial independence. That's no way to live IMO, especially for some goal most people never meet. ... In the experience of many including me, wealth grows faster when you are more willing to give some away and risk some. But to do this you can't be in the mindset I was in during the money-tracking season of my life. ... I can't really tell, but it seems to me you are talking about wealth in the form of bank accounts. I'm talking about that plus the wealth that is invested in business etc. Building the latter kind of net wealth happens in very unpredictable ways; tracking the past does not necessarily tell anything about the future. If this sort of wealth (and related debt) is the largest single thing on your balance sheet, keeping track of the bank accounts doesn't tell you much.

[Catwoman]

That's very true.

I hate money. Can we just go back to trading chickens for shoes or whatever? :p

 

 

I've got the shoes, but I'm a little low on chickens right now. ;)

[Mergath]

 

I've got the shoes, but I'm a little low on chickens right now. ;)

 

 

I've got a chicken! You, er, wanted it without the head, right? ;)

[mommymilkies]

I have no ability to do anything with money except spend it. Seriously. I was never taught and trial and error is failing me here. I'm going to put my guess at -$8 trillion dollars for my net worth because that's usually how it feels. I wouldn't even know where to begin calculating a real one, but I'm sure it would be depressing. Oh, oh, unless Legos count. We have too many of those.

[Joker]

This is always a difficult subject for me because my dad worried a lot about what he would leave us, how he would take of himself, and tried to plan. Then, he died young and none of it mattered. Life is so stinking short and I just kind of refuse to play the same game. Dh's job actually has a really good pension plan so if we make it to there, we're ok. We are very aware of where our money goes and we save/invest as much as we feel comfortable, but it's not a primary focus.

[aggieamy]

I'm too cheap to buy many shoes and I gotta keep my chickens for a dowry for DD. We want her to marry someone amazing. We might have to get a donkey too for the dowry.

 

We know what ours is and try to actively manage it. We have no debt, we have savings in bank accounts as well as IRA's.

 

This is us now. It gives me such relief to know that we are in control of our money.

 

I have no ability to do anything with money except spend it. Seriously. I was never taught and trial and error is failing me here. I'm going to put my guess at -$8 trillion dollars for my net worth because that's usually how it feels. I wouldn't even know where to begin calculating a real one, but I'm sure it would be depressing. Oh, oh, unless Legos count. We have too many of those.

 

This is me when I met DH. Seriously Mommymilkies, I know just how you feel. I know his plan isn't for everybody but DH and I did a Dave Ramsey plan right after we were married and it just clicked with us. It's the only way I can survive because I'm the type of gal if you handed me a hundred dollar bill and just told me to just spend it without a plan then I'd manage to spend three hundred dollars. :(

[Catwoman]

I'm too cheap to buy many shoes and I gotta keep my chickens for a dowry for DD. We want her to marry someone amazing. We might have to get a donkey too for the dowry.

 

I hate to burst your bubble here, but if you want "amazing," it's gonna cost you a couple extra donkeys and probably at least 2 goats.

 

Perhaps your dd would consider "halfway decent, although with somewhat poor eyesight," which would be considerably cheaper.

 

Something to think about... ;)

[Arcadia]

Paying off a mortgage builds net worth, right? A 401K is savings, is it not? .

 

 

That was why I said the term savings was not clearly defined in the question. Paying off an underwater mortgage is just reducing debt. 401K is not liquid savings.

A year ago, paying down our underwater mortgage to refinance would have wipe off our entire savings. There were people who did that though to secure the low fixed rate loan.

[nd293]

This was an interesting exercise for me. I track our finances about once a month, but only ever focus on the debt aspect, with a view to tracking how close we are to having the mortgage paid off. It never really occurred to me to look at the value in the house, as it were. I'm sitting here having a think about what motivates me to want to save: thinking about what separates us from the goal of a paid off house, or about how much we have achieved by living well within our means. I might have recent begun to focus too much attention on the former.

[Pawz4me]

One thing, though -- when it comes to money and net worth, let's all remember that a lot of people lie about stuff like that. (And hardly anyone ever says they have a lot less than they really have, unless they're filling out a financial aid application, so I think the "how much is your net worth" numbers should be taken with a grain of salt. :D)

 

Well, you know there's always an exception! I'm positive I voted that our net worth is lower than it actually is. It was an attempt to be honest, and since I don't have the exact figure in my head, and we're pretty close to one of the cut-off points, I decided I'd rather under-estimate than over-estimate.

[2squared]

That was why I said the term savings was not clearly defined in the question. Paying off an underwater mortgage is just reducing debt. 401K is not liquid savings.

A year ago, paying down our underwater mortgage to refinance would have wipe off our entire savings. There were people who did that though to secure the low fixed rate loan.

 

 

The OP Used the specific term "net worth" which is defined simply as assets less debts. Reducing debt and increasing savings are actions which increase net worth. Liquidity is not a factor in calculating net worth.

 

Like many others have posted, most of our net worth is tied up in our retirement accounts and house. Neither are liquid assets. Our monthly cash flow is much tighter than I would like (which is true of everyone I expect), and the only reason you might guess our net worth is because we are in our early 40s. We don't have nice cars or a nice house. We don't have gadgets or go on vacations, but we've had 20 years of building. When we were in our 20s making the same salary with fewer mouths to feed, our net worth was much, much lower.

 

Personal finance is just that - personal. If I had a large, underwater mortgage and a secure job, I would have seriously considered paying it down with cash to lock in a lower interest rate. That's a positive long-term move, but only if you are willing to bear the risk of a lower emergency fund.

[2squared]

This was an interesting exercise for me. I track our finances about once a month, but only ever focus on the debt aspect, with a view to tracking how close we are to having the mortgage paid off. It never really occurred to me to look at the value in the house, as it were. I'm sitting here having a think about what motivates me to want to save: thinking about what separates us from the goal of a paid off house, or about how much we have achieved by living well within our means. I might have recent begun to focus too much attention on the former.

 

We, too, are motivated to be mortgage free. If I didn't see our net worth every time I turn on Quicken, I would be very tempted to short retirement to pay off the mortgage. Our retirement funds, though, are really starting to work for us. They are growing faster than the value in our house and are growing faster than the interest we pay on our mortgage. So, we are committed to fully funding retirement while finding little pockets of extra to pay off the mortgage early.

[delaney]

Well... I didn't read the OP as a comparison of numbers. Maybe I missed some subtext there. I did answer the poll and explained why I track it.

 

And let me tell you ... it is very possible to have a significant net worth, yet not have much $$ to spend. The farm is a huge asset. But, I can't spend it. Also, because the whole point of buying the farm was to secure it for future generations (and this is the 5th generation to farm it!), I can't sell it. What I can do is spend a lot of resources -- time, energy, and lots of money -- trying to hang on to that huge asset. It's worth can't be measured in mere $$. I would gather that I'm probably not the only one on these boards who has such an asset -- which is almost, at times, more of a financial burden than a financial asset. Numbers don't make you wealthy, and it's a fool who thinks he is above reproach or eminent disaster just because he has big numbers.

 

Now... if this thread really is all about whipping out the financial equivalent of your wangs and measuring up, then I'll shut up an walk away because that's a b---s--- game.

Exactly. DH is partner in a tech firm. Do we have enormous cash flow? No. Do we bills? Hell yes. Is his company worth millions? Yes. That is for our future. We live, we enjoy, we don't stress the almighty dollar. And that is coming from a person who doesn't have a loving, holy power to fall back on in prayer if the sh&t hits the fan. I want to forge great memories and teach my kids the value of a dollar and that the money we earn is OURS and not theirs to enjoy when we are dead.

[Meriwether]

Well... I didn't read the OP as a comparison of numbers. Maybe I missed some subtext there. I did answer the poll and explained why I track it.

 

And let me tell you ... it is very possible to have a significant net worth, yet not have much $$ to spend. The farm is a huge asset. But, I can't spend it. Also, because the whole point of buying the farm was to secure it for future generations (and this is the 5th generation to farm it!), I can't sell it. What I can do is spend a lot of resources -- time, energy, and lots of money -- trying to hang on to that huge asset. It's worth can't be measured in mere $$. I would gather that I'm probably not the only one on these boards who has such an asset -- which is almost, at times, more of a financial burden than a financial asset. Numbers don't make you wealthy, and it's a fool who thinks he is above reproach or eminent disaster just because he has big numbers.

 

Now... if this thread really is all about whipping out the financial equivalent of your wangs and measuring up, then I'll shut up an walk away because that's a b---s--- game.

 

My mom always said that a farmer was the only person who lived poor and died rich. All those assets, no cash.

[DawnM]

My husband is an accountant. We do keep track of our $$ and our assets. I think it is important to plan. Yes, things can happen, yes, you could die tomorrow, but you need to have some idea of how you are doing and save for the future.

 

I don't see this as touchy at all. I have no intention of posting my answers to the amounts on this forum, but we do ok. We know people in our income bracket and higher who spend differently and are always "broke."

 

Dawn

[walkermamaof4]

This was a bit eye opening for me to ponder. Honestly, I know this is so stupid of me, but I always thought of us as doing fine since we have a good cushion in the bank and some 401k. But when I thought through our net worth today, I realized that if we liquidated everything it would just pay off our mortgage. Uh oh.

 

The coolest thing to me about reading this question today is that we started the Dave Ramsey's Financial Peace University class just this Tuesday. Oh my! How excellent! Funny, enjoyable, and very enlightening. It will absolutely affect purchases we had planned to make this year but help my heart to be ok with the choices we make. I am so sorry we didn't take it when we were 19. I would bet that we take it more than once to stay on our toes with this. I highly recommend it.

[Mnemosyne]

We currently have a negative net worth (both graduated university last year with some student debt), but we keep track of this number and are able to pay it off on an accelerated rate, while maxing our IRA (not quite maxing the 401K yet), and on one salary. We are also able to have a size-able emergency fund and save up for vacations.

 

This would definitely not have been possible without keeping close track of our finances and budgeting for our goals. If it wasn't for this, we would have bought a house and a second car and had a little bit more 'leverage' to bite off than we could chew. I find being aware of finances extremely important because it allows for us to have the quality of life we want without feeling stressed or like we don't have enough. Even though I'm looking at a red number, the peace of mind it gives me is invaluable - knowing I don't have to rely on overdrafts or credit cards for day to day life and that I can buy a book when I want one is a good feeling.

 

Then again, I tend to stress about everything - if I hadn't been keeping such close track of our finances, I'd be much to scared to spend anything at all, because WHAT IF?!??!

 

So yes, I know my net worth. To the penny. And it makes me, personally, feel so much better.

[SwallowTail]

Um, with student loans and a mortgage, we are extremely "underwater" , LoL, With me home handling homeschooling, there is not much to be done about it.

[Catwoman]

Well, you know there's always an exception! I'm positive I voted that our net worth is lower than it actually is. It was an attempt to be honest, and since I don't have the exact figure in my head, and we're pretty close to one of the cut-off points, I decided I'd rather under-estimate than over-estimate.

 

LOL! Go ahead, prove me wrong! :D

[Catwoman]

Um, with student loans and a mortgage, we are extremely "underwater" , LoL, With me home handling homeschooling, there is not much to be done about it.

 

Sure there is. It's just going to take time. The more organized you are, and the better you manage the money that comes in, the more money and financial security you'll have in the future. It's a slow-but-steady kind of process, and sometimes it can feel pretty discouraging, especially when you have a sudden huge expense that drags you back to square one.

 

Please remember that a lot of us are much older than you are, so we've had years to work, plan, save, and pay off debt. It can be discouraging to hear that people are debt-free when you're not, but whenever you start comparing yourself to those people, don't forget to remind yourself that if they're 20 years older than you are, you shouldn't be comparing yourself to them at all -- at least not for 20 more years! :)

[Sun]

This was a bit eye opening for me to ponder. Honestly, I know this is so stupid of me, but I always thought of us as doing fine since we have a good cushion in the bank and some 401k. But when I thought through our net worth today, I realized that if we liquidated everything it would just pay off our mortgage. Uh oh.

 

The coolest thing to me about reading this question today is that we started the Dave Ramsey's Financial Peace University class just this Tuesday. Oh my! How excellent! Funny, enjoyable, and very enlightening. It will absolutely affect purchases we had planned to make this year but help my heart to be ok with the choices we make. I am so sorry we didn't take it when we were 19. I would bet that we take it more than once to stay on our toes with this. I highly recommend it.

 

 

Yeah! I'm glad that this topic helped someone else the way it helped me!

[Catwoman]

 

Yeah! I'm glad that this topic helped someone else the way it helped me!

 

 

I think it turned out to be a very good discussion. Fortunately, everyone seemed to stay on-topic, and no one tried to turn it into a competition of who has more and who has less than anyone else, which is what I think a few people were afraid would happen.