Financial Net Worth

[TSR Capital]

Just curious.

[dragoncar]

We have these polls from time to time but I guess it can't hurt to get an update.  A common complaint is that there aren't enough options-- I say max it out with more increments and go above 2 million

[Clever Name]

I agree with dragoncar.  Someone with a net worth of $40 should not be in the same category as someone with a net worth of $225,000.

[Cromacster]

I agree with dragoncar.  Someone with a net worth of $40 should not be in the same category as someone with a net worth of $225,000.

Agreed, this category has the most hits, but yet it is essentially meaningless. 

I would probably add a 0-25, 25-50, 50-100, 100-150, 150-225

[frugally]

I ultimately agree, but I think it's really interesting to see the numbers broken down like this.  I think that means most people are either just starting out/just found mustachianism. :)

[dragoncar]

I ultimately agree, but I think it's really interesting to see the numbers broken down like this.  I think that means most people are either just starting out/just found mustachianism. :)

The benefit of smaller ranges is that you can break it out into wider ranges easily, but you can't reverse that processs

[LalsConstant]

Or there are just more regular everyday people with sub 50k incomes who don't climb past that 250k barrier so quickly.  Just saying is all!

[El Gringo]

Or there are just more regular everyday people with sub 50k incomes who don't climb past that 250k barrier so quickly.  Just saying is all!

+1

[frugally]

Or there are just more regular everyday people with sub 50k incomes who don't climb past that 250k barrier so quickly.  Just saying is all!

Very true.  And Dragoncar makes a good point, I just don't think to aggregate the data on the fly.

[CommonCents]

The other issue is whether people are reporting singly (halving their networth if married) or by household. 

[dragoncar]

The other issue is whether people are reporting singly (halving their networth if married) or by household.

I forgot about this one.  It really bothers me, since I think people should report the per capita number.

[Nords]

Apparently we need a poll to determine how we're going to design this poll.

Of course anyone who disagrees is welcome to start a poll on whether we should start a poll about designing a poll.

[iamlindoro]

Apparently we need a poll to determine how we're going to design this poll.

Of course anyone who disagrees is welcome to start a poll on whether we should start a poll about designing a poll.

Whoah, whoah, fella, did you get the committee to vote before writing your post about the poll to poll the pollees about polling to design a poll?

[dragoncar]

Apparently we need a poll to determine how we're going to design this poll.

Of course anyone who disagrees is welcome to start a poll on whether we should start a poll about designing a poll.

Whoah, whoah, fella, did you get the committee to vote before writing your post about the poll to poll the pollees about polling to design a poll?

Hey there, comrade!  Did you pay the application fee for the permit to start that comittee?

[Dicey]

Damn funny, all three of you. Thanks for keeping it interesting.

[CommonCents]

The other issue is whether people are reporting singly (halving their networth if married) or by household.

I forgot about this one.  It really bothers me, since I think people should report the per capita number.

Me too!  Except, I didn't think when I first voted and since the question didn't prompt me...I voted as a unit.

Apparently we need a poll to determine how we're going to design this poll.

Of course anyone who disagrees is welcome to start a poll on whether we should start a poll about designing a poll.

Whoah, whoah, fella, did you get the committee to vote before writing your post about the poll to poll the pollees about polling to design a poll?

Hey there, comrade!  Did you pay the application fee for the permit to start that comittee?

Don't forget you can only pay the application fee in person when the office is open - on full moon Tuesdays between 3:30-4:30AM.

[odput]

Apparently we need a poll to determine how we're going to design this poll.

Of course anyone who disagrees is welcome to start a poll on whether we should start a poll about designing a poll.

Whoah, whoah, fella, did you get the committee to vote before writing your post about the poll to poll the pollees about polling to design a poll?

Hey there, comrade!  Did you pay the application fee for the permit to start that comittee?

Don't forget you can only pay the application fee in person when the office is open - on full moon Tuesdays between 3:30-4:30AM.

North Pole Time Zone

[sheepstache]

Apparently we need a poll to determine how we're going to design this poll.

Of course anyone who disagrees is welcome to start a poll on whether we should start a poll about designing a poll.

Whoah, whoah, fella, did you get the committee to vote before writing your post about the poll to poll the pollees about polling to design a poll?

Hey there, comrade!  Did you pay the application fee for the permit to start that comittee?

Don't forget you can only pay the application fee in person when the office is open - on full moon Tuesdays between 3:30-4:30AM.

North Pole Time Zone

Bring a flashlight and lock-picking kit.  Ignore the sign that says "Beware of leopard."

[TreeTired]

Seems ironic to exclude the house in the calculation of household net worth.

[Cromacster]

Apparently we need a poll to determine how we're going to design this poll.

Of course anyone who disagrees is welcome to start a poll on whether we should start a poll about designing a poll.

Whoah, whoah, fella, did you get the committee to vote before writing your post about the poll to poll the pollees about polling to design a poll?

Hey there, comrade!  Did you pay the application fee for the permit to start that comittee?

Don't forget you can only pay the application fee in person when the office is open - on full moon Tuesdays between 3:30-4:30AM.

North Pole Time Zone

Bring a flashlight and lock-picking kit.  Ignore the sign that says "Beware of leopard."

Upon receiving the permit you will be baked.....and there will be cake!  (The cake is a lie!)

[simonsez]

I agree with dragoncar.  Someone with a net worth of $40 should not be in the same category as someone with a net worth of $225,000.

Yup and perhaps a 20 year old shouldn't be in the same category as a 50 year old?  Single question polls are tough to make robust, though.

Alternative (with options listed):
-20's or younger, negative to $0 net worth
-30's, negative to $0 net worth
-40's, negative to $0 net worth
-50's, negative to $0 net worth
-60's or older, negative to $0 net worth
and then repeat for each successive net worth level.  Obviously, the more concise you make the groups the less you can derive from the poll but you don't want anything too hairy either.

[arebelspy]

I agree with dragoncar.  Someone with a net worth of $40 should not be in the same category as someone with a net worth of $225,000.

Yup and perhaps a 20 year old shouldn't be in the same category as a 50 year old? 

Let's not forget that location/cost of living matters, so maybe that should be included.

And gender matters, as males still (unfortunately) make more than females, typically, so that should probably be included.

And type of job matters (a lot harder for a hairdresser to save 200k than a lawyer), so maybe we should include profession, so that it's apples to apples.

And let's not forget ....

Single question polls are tough to make robust, though.

This.  Or, in other words, Nords point.

[AdrianC]

I forgot about this one.  It really bothers me, since I think people should report the per capita number.

I expect most people report household net worth.

[dragoncar]

I forgot about this one.  It really bothers me, since I think people should report the per capita number.

I expect most people report household net worth.

I'll just double my responses in the future then

[Clever Name]

I agree with dragoncar.  Someone with a net worth of $40 should not be in the same category as someone with a net worth of $225,000.

Yup and perhaps a 20 year old shouldn't be in the same category as a 50 year old? 

Let's not forget that location/cost of living matters, so maybe that should be included.

And gender matters, as males still (unfortunately) make more than females, typically, so that should probably be included.

And type of job matters (a lot harder for a hairdresser to save 200k than a lawyer), so maybe we should include profession, so that it's apples to apples.

And let's not forget ....

Single question polls are tough to make robust, though.

This.  Or, in other words, Nords point.

As Voltaire said, the perfect is the enemy of the good.  It's silly to say that since we can't make the poll perfect, we shouldn't try to improve it at all.

[arebelspy]

I agree with dragoncar.  Someone with a net worth of $40 should not be in the same category as someone with a net worth of $225,000.

Yup and perhaps a 20 year old shouldn't be in the same category as a 50 year old? 

Let's not forget that location/cost of living matters, so maybe that should be included.

And gender matters, as males still (unfortunately) make more than females, typically, so that should probably be included.

And type of job matters (a lot harder for a hairdresser to save 200k than a lawyer), so maybe we should include profession, so that it's apples to apples.

And let's not forget ....

Single question polls are tough to make robust, though.

This.  Or, in other words, Nords point.

As Voltaire said, the perfect is the enemy of the good.  It's silly to say that since we can't make the poll perfect, we shouldn't try to improve it at all.

Oh, I certainly agree, which is why I've created a poll in the past asking the exact same question as this one.

I was teasing the people who wanted to change the poll for this reason, or that reason.  There's always a million tweaks that can be made, and a million ways to skin the cat.  Doesn't mean we shouldn't change it, but I was hoping one would take my post and use it to realize that we'll never have a perfect poll, and that's okay.  :)

[imustachemystash]

It looks like most of us are still in the process of building up our stash!

[Emilyngh]

We are currently at $195k.....come onnnnn 200!

[quilter]

You need to add two categories:

1. None of your business

2. Enough.

[dragoncar]

When you finally make it to the next category:

[gecko10x]

Oh, I certainly agree, which is why I've created a poll in the past asking the exact same question as this one.

Hey! I've moved up a slot in that poll. Should I change my vote?

[AdrianC]

I forgot about this one.  It really bothers me, since I think people should report the per capita number.

I expect most people report household net worth.

I'll just double my responses in the future then

Would it change your answer?

I consider our stash our family net worth. I don't think that we need to split it five ways.

[arebelspy]

Oh, I certainly agree, which is why I've created a poll in the past asking the exact same question as this one.

Hey! I've moved up a slot in that poll. Should I change my vote?

Oh neat, I have too!  :D

Nice what a little time will do with a high savings rate plus compounding.

(I'm leaving my vote, as it was a snapshot at that time, but feel free to do whatever feels right to you.)

[AdrianC]

Oh, I certainly agree, which is why I've created a poll in the past asking the exact same question as this one.

Interesting comparing the last poll with this one. The amount of >$1M has doubled.
Though, I understand the former poll didn't have the >$1M category till later, plus 726 total votes versus 200 odd.

[arebelspy]

Though, I understand the former poll didn't have the >$1M category till later

What makes you think that?

[CommonCents]

I forgot about this one.  It really bothers me, since I think people should report the per capita number.

I expect most people report household net worth.

I'll just double my responses in the future then

Would it change your answer?

I consider our stash our family net worth. I don't think that we need to split it five ways.

It's less about splitting it with kids (because well, it's really what you and your spouse own, right?)  But it allows a better comparison picture between singles and those partnered up.  It also drives me a bit batty every time I run across a bitter post by a divorcee on here, lambasting their spouse and the divorce that took away all/most/half of their wealth.  Well, properly calculated, half of that wealth was never theirs.  Anyways, I think it makes sense to divide it in two if married, but as mentioned above, it isnt worded that way so I didn't think to do it.

[dragoncar]

Though, I understand the former poll didn't have the >$1M category till later

What makes you think that?

Yes, I edited the poll so users can change their votes.

I had initially turned this off, as I wanted a snapshot in time -- eventually we'll all be moving up to the highest level of this, so it'd be useless (I myself moved up a level since posting this)  ;)

I went ahead and added some higher categories as well, which suddenly makes the poll inaccurate (all of the people who voted 250k+ are now automatically categorized in the 250-500k range), but since it doesn't matter for anything, who cares?  And they have the ability to edit their vote now, so they can fix it (if they bother to come back and read this)!

Although that doesn't say anything in particular about the >$1 million category

[Carrie]

I don't see the value in excluding the home in networth calculations.  We've put a lot of effort into putting a 40% down payment and paying down the mortgage substantially since purchase.  The equity position in our home is a good percentage of our networth and will be reaped when we sell to downsize. 

[arebelspy]

Although that doesn't say anything in particular about the >$1 million category

Thanks, I had forgotten that, and my quick skim of the thread missed it because it was on page 2.  :)

[SwordGuy]

I don't see the value in excluding the home in networth calculations.  We've put a lot of effort into putting a 40% down payment and paying down the mortgage substantially since purchase.  The equity position in our home is a good percentage of our networth and will be reaped when we sell to downsize.

In that case, the difference between what you could sell it for and what you could buy a replacement for would be appropriate to add in.

The equity that's "locked into" the house has no value for paying the bills so that's why it's not included.

[AdrianC]

It's less about splitting it with kids (because well, it's really what you and your spouse own, right?)  But it allows a better comparison picture between singles and those partnered up.  It also drives me a bit batty every time I run across a bitter post by a divorcee on here, lambasting their spouse and the divorce that took away all/most/half of their wealth.  Well, properly calculated, half of that wealth was never theirs.  Anyways, I think it makes sense to divide it in two if married, but as mentioned above, it isnt worded that way so I didn't think to do it.

Right. I guess us happily married types tend to think as a family. I voted as household net worth less house.
My vote is the same if I cut it in half.

[dragoncar]

I don't see the value in excluding the home in networth calculations.  We've put a lot of effort into putting a 40% down payment and paying down the mortgage substantially since purchase.  The equity position in our home is a good percentage of our networth and will be reaped when we sell to downsize.

In that case, the difference between what you could sell it for and what you could buy a replacement for would be appropriate to add in.

The equity that's "locked into" the house has no value for paying the bills so that's why it's not included.

Sheesh, I didn't even notice that bit about excluding the home.  I just assumed it said include home equity.  I agree with carrie -- it doesn't make sense to exclude it.  It's part of your net worth. 

If I sell my house and start renting the same house, you think my net worth increases?

[Cheddar Stacker]

I don't see the value in excluding the home in networth calculations.  We've put a lot of effort into putting a 40% down payment and paying down the mortgage substantially since purchase.  The equity position in our home is a good percentage of our networth and will be reaped when we sell to downsize.

In that case, the difference between what you could sell it for and what you could buy a replacement for would be appropriate to add in.

The equity that's "locked into" the house has no value for paying the bills so that's why it's not included.

Carrie, a lot of people here believe strongly that you shouldn't put 40% down on a mortgage or pay it down quickly because any extra cash should be used for investing. The investment income should far exceed the mortgage interest paid based on simple mathematics and historical returns, hence the strategy.

While I understand the strategy and agree with it, I have also deliberately paid extra towards my mortgage to reduce PMI, get to 80% LTV, and refinance to a shorter term mortgage so I could get an interest rate < 3%. All of these efforts have been very worthwhile, and have improved my overall financial stability.

I like to include my home equity in my net worth for the same reasons you mentioned, but I definitely see the other side of the argument as well. You can't spend the money as sword guy mentioned, and it rarely produces a substantial return on investment after considering inflation.

[Cheddar Stacker]

Sheesh, I didn't even notice that bit about excluding the home.  I just assumed it said include home equity.  I agree with carrie -- it doesn't make sense to exclude it.  It's part of your net worth. 

If I sell my house and start renting the same house, you think my net worth increases?

+1.  Good point. Liquidation of home equity should not increase net worth. Any counterpoints to that one? I'm genuinely curious.

EDIT: I wouldn't count the home equity in my 4% SWR, but that's a different story.

[soccerluvof4]

Anyway you look at it its still money. I think home equity should be part of your net worth.  If you want to subtract a cash burn percentage thats one thing.  Just my vote nothing else. Doesn't effect my poll category.

[AdrianC]

+1.  Good point. Liquidation of home equity should not increase net worth. Any counterpoints to that one? I'm genuinely curious.

Not a counterpoint, just a comment that once your stash is at a real-world FI amount, for most people hanging out here the home equity will be a small percentage of overall net worth. $1.5M net worth, 150K house, for example.

[CommonCents]

+1.  Good point. Liquidation of home equity should not increase net worth. Any counterpoints to that one? I'm genuinely curious.

Not a counterpoint, just a comment that once your stash is at a real-world FI amount, for most people hanging out here the home equity will be a small percentage of overall net worth. $1.5M net worth, 150K house, for example.

I'm not sure I've ever even seen a $150K house where I live (Boston).  It's probably a less sum of overall net worth than average folks, but I don't know that it's quite such a discrepancy as you portray it.  Be another interesting poll - home equity as a percentage of net worth.

[dragoncar]

+1.  Good point. Liquidation of home equity should not increase net worth. Any counterpoints to that one? I'm genuinely curious.

Not a counterpoint, just a comment that once your stash is at a real-world FI amount, for most people hanging out here the home equity will be a small percentage of overall net worth. $1.5M net worth, 150K house, for example.

I'm not sure I've ever even seen a $150K house where I live (Boston).  It's probably a less sum of overall net worth than average folks, but I don't know that it's quite such a discrepancy as you portray it.  Be another interesting poll - home equity as a percentage of net worth.

Yeah, if I stay in SF housing is gonna be a huge part of my expenses.  Based on my current living situation, I housing accounts for 5/6-5/7 of my target net worth

[DoubleDown]

The mathematician in me says that the only further breakdown needed perhaps is dividing the "1 - $249,000" category into two or possibly three groups. Then we'd have a bell curve as expected, and life would be perfect. Although we might argue life would be more perfect if 100% of the answers were "$1 million +".

[Cheddar Stacker]

+1.  Good point. Liquidation of home equity should not increase net worth. Any counterpoints to that one? I'm genuinely curious.

Not a counterpoint, just a comment that once your stash is at a real-world FI amount, for most people hanging out here the home equity will be a small percentage of overall net worth. $1.5M net worth, 150K house, for example.

I'm not sure I've ever even seen a $150K house where I live (Boston).  It's probably a less sum of overall net worth than average folks, but I don't know that it's quite such a discrepancy as you portray it.  Be another interesting poll - home equity as a percentage of net worth.

AdrianC - Good point.
CommonCents-Mine is either 15.64% or 11.22%, depending on what I include in my NW. I own some privately held stock that I don't include in my NW # for now since it's not super marketable or liquid, but if I include it my home equity % drops.

What's your %?