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

[Mama Geek]

 

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! :)

 

 

I agree wholeheartedly with this. I was in my mid 30's before having dd and quitting work. Our house, student loans, and vehicles were paid off at this point. We were DINKS for more than 10 years and then got into traveling and doing contract work. Give yourself some time.

[2squared]

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.

 

 

I love talking about finances b/c I always learn something. I think making finances such a taboo subject really limits overall financial education. So many people advocate finance classes in high school or college, but really, I think the best way to learn is to talk to other people. We all go through seasons in life, and it's helpful to talk with people in your current season, the season ahead of you, and the season behind you.

[Guest]

I didn't vote in the poll; I don't know for sure at the moment and it's too time-consuming to calculate. I have done it before and I do think it is important at least to have a general idea. I definitely think it's important to be on the "plus" side, not the "minus" side, but beyond a certain point, how much farther on the plus side I am isn't terribly crucial.

[Laura Corin]

but beyond a certain point, how much farther on the plus side I am isn't terribly crucial.

 

That point will depend on circumstances, however. Because Husband and I lived overseas for most of our working lives - and didn't know where we would end up, so didn't make voluntary contributions - we will not get full government pensions. Husband has also moved job a lot and not contributed to private pensions that much. Our net worth therefore represents the capital (in our case, a rental property) from which we will derive our retirement income.

 

Laura

[2squared]

That point will depend on circumstances, however. Because Husband and I lived overseas for most of our working lives - and didn't know where we would end up, so didn't make voluntary contributions - we will not get full government pensions. Husband has also moved job a lot and not contributed to private pensions that much. Our net worth therefore represents the capital (in our case, a rental property) from which we will derive our retirement income.

 

Laura

 

So true. Once we have high enough retirement savings, we won't need to worry about how far we are on the plus side. Having enough, though, is quite a bit of assets and won't happen until we are much closer to retirement age. Once we hit that magical number, then we will need to manage our net worth so we can live off it. Managing to maintain value yet be liquid enough to make frequent withdrawals, minimize taxes, etc.

 

Since we are in the U.S., we have to worry about the cost of health care and long-term care. It's a lot to think about, and I am definitely feeling the pressure since I turn 40 this year. I'm almost 1/2 way through my working years (if you assume 65yo), and we still have little kids, we are still worrying about job stability, we are still not living in our "forever" home. I would really, really like to have a better vision for where we are going to end up.

[Guest]

That point will depend on circumstances, however. Because Husband and I lived overseas for most of our working lives - and didn't know where we would end up, so didn't make voluntary contributions - we will not get full government pensions. Husband has also moved job a lot and not contributed to private pensions that much. Our net worth therefore represents the capital (in our case, a rental property) from which we will derive our retirement income.

 

Laura

 

Yeah, I get it. My dh is self-employed, so our set-up is similar. What I meant in my post was that I'm not a believer in amassing ever-greater fortunes just cuz. Once I know that our income-stream is sufficient to live on, any point beyond that doesn't cause me great concern.

 

In my case, it would be fairly easy to calculate liquid assets, but difficult to calculate total net worth including all assets and subtracting all liabilities.

[Wheres Toto]

We're somewhere between breaking even and negative at this point. Dh started his own company after a lay-off last year and things are still very rough. Unfortunately, we fall into the "older" category. It looks like I may be returning to work in order to help our situation improve.

[dontknow]

One thing to consider when looking at Net Worth or any rolled up number for that matter is what's behind it.

 

For instance, how much does your real estate or other illiquid assets factor into it? Are you sure you're "valuing" the market values accurately?

 

Are you including Life Insurance Cash Values or Death Benefits? Should you? If so - are you also calculating tax impact before applying the number?

 

One number doesn't really say much unless the details are well thought out, scrutinized and known.

[Donna]

I didn't vote in the poll because I could only guess at it. I know what we have in the bank, how much we still owe on the house which will be paid off in a few years (we have a lot of equity because we downsized a couple years ago), what we have in retirement/pensions, etc... so I could guesstimate a number but I don't like to share that stuff on the internet. We don't have many other investments.

 

It is important to me to have an idea of net worth and a plan for increasing it (mostly by decreasing and limiting the debt portion at this point in time). We try to save when things are going well and limit spending more when they aren't.