Historical Net Worth since 2007
I annotated our historical net worth plot with our major life events. Inspiration from Revanche at AGL!
A few comments:
- In the early years, this is my net worth only. There is a bump about a year after we got married when I combined our net worth in my spreadsheet.
- Real estate equity assumes the tax assessed value, since the market value is hard to get a good estimate for. In California, the tax assessed value is limited to a small increase each year. I’d estimate market value is at least $100k higher, some sites state it is $300k+ higher.
- After 2014, the cash/investments line is just calculated as (Net Worth – Home Equity), so it captures everything that is not home equity. There is a tiny bit of student loan debt and car equity in there. I haven’t historically broke those out in my long term spreadsheet (only yearly). This is a simplification, but fixing it wouldn’t change the overall picture much and would take quite a bit of effort in digging through my historical spreadsheets. So, there it is. In the early years, the difference between investments and net worth is student loans.
After making this chart, a few things jumped out at me:
- We’ve lived in our house for longer than it feels like. It takes up a good 1/3 of this chart, but I still feel like we are new home owners! Time flies!
- All of my hard work in the first few years of my working career didn’t make much immediate traction, but the compounding returns help in the long run. We’d made some really great headway prior to T starting his first full time full salary job in 2014.
- Both of us having high paying jobs has been crazy helpful in making headway the past few years. The stock market helps too! It could be interesting to break this out further, but would take a lot more time. It probably won’t happen.
This is basically the only chart in our personal finances spreadsheet that T looks at on a regular basis, and it is the one I look at the least. I liked the picture Revanche made that more clearly showed the mortgage debt, since it is often significant if you live in a high cost area. I would have to play around to get this in my picture!
Do you track your net worth over time? Was there a particular inflection point in your life where your finances improved significantly? I would say ours improved a lot when we moved in together and cut housing, and then even more so when we moved to northern California and both had full salary jobs.
Stacking Pennies 
I wish I could do one of these charts but I’ve changed accounts around enough and relied too heavily on Mint to keep track (which has since just dumped a lot of the old data). If you include real estate gains, my net worth increased rapidly after buying a condo. Otherwise, though, it’s been a pretty constant climb.
This was my main reason for ditching mint for tracking – i need to maintain control over my information. It is less of a privacy concern and more that I wanted to be able to fiddle with plots and didn’t trust them not to lose it or change things or corrupt data or… whatever. I also mostly use a yearly budget/spending plan (although I track spending monthly), and Mint is (was?) pretty focused on monthly budgeting.
Yeah, I am pretty consistently disappointed by Mint’s data integrity. I am, however, also very lazy. Do you have an automated process for gathering financial info or do you do it manually?
More manual than not. BUT, net worth tracking is not very time consuming. Plus, if you miss a month or 6, it doesn’t really matter for the big picture.
Tracking spending can be a little more time consuming if I don’t stay on it (then I have to mix info from my aggregator with my manual methods). There were several years that I skipped tracking that because I was too busy and not that interested.
Ugh, I’m sorry about Mint losing much of your data! This is why I’m trying to get my husband less reliant on Mint.
This year has been both a) really fascinating to watch my net worth and b) shown me how net worth doesn’t matter in a lot of ways. It’s fascinating because I should see an almost six figure increase this year despite not working (thank you stock and real estate markets) and having an expensive year for that. That said, it’s definitely showing the effects of compounding at this point!
I agree with you on b), but am curious specifically what you are referring to in the comment.
Mostly just that net worth != liquidity or cash flow. I don’t agree with people taking that logic to them invest in dividend growth stocks, but that my net worth being so tied up in retirement accounts and condo equity leaves very little liquidity to cover things at the moment.
Yes, agree – although I agree that doesn’t mean you should change your strategy at all. If it were really just you, my understanding is that you have quite a bit of money in Roth (via backdoor methods), which you theoretically could access contributions to cover short term things (although you could never get it back in the roth). If this was a long term thing and you had enough NW to not want to work, there are ways to get at that money without paying penalties. You could refi or recast your mortgage to ease up your cash flow if you actually needed to – or even take money out! But you don’t need to do any of those things! It seems somewhat unrealistic to fully fund retirement, have a home paid for, and have an abundance of liquid taxable investments… all at a relatively young age.
But, cash flow from a job is a really nice part of any financial picture!
I’ve been thinking about changing strategy slightly next year to put more into tax deferred accounts. I was worried we were going to end up with in more those accounts than we would spend between age ~60 and death, but I now understand some ways to get at that money earlier if needed, so this is less of a concern. Still unsure though. It just seems silly not to take every tax break I can right now.
If it were really just me, then we wouldn’t have paid for a wedding and the ensuing costs for that, which would have left me with many more months of expenses in cash. I wouldn’t have recast the mortgage because my lender requires a $10,000 extra principal payment within 12 months to let you recast and it’s a $100 fee. But the amount “extra” I have to pay for letting the mortgage continue until it recasts at its February 2018 date is less than $10,000 and would have been even last September. And regardless, my husband took over paying the mortgage. He doesn’t even know how much it costs or see it as as bill, more as a choice that we’re choosing to keep it for now. Our estate planning lawyer saw our combined balance sheet, incomes, and the mortgage balance, laughed, and said she was sure we’d get bored of it soon and pay it off.
I don’t *quite* have enough NW to not work, though I am rather close at my average career income so far. Assuming being married and my husband owning half of the condo, I’m about 2-3 years away and he is about 5 years away.
I do have SO much Roth money. My breakdown (assuming I pay half of the joint expenses) is: 5 months cash, 29 months taxable, 49 months (4 years) Roth money, and 64 months (5.4 years) 401(k) money. If we were not married, I would absolutely draw down my taxable account and then probably a little bit of Roth money. My husband (usually not the more conservative one) was far more against me taking money out of retirement accounts than I was. He would rather pay for my half of the joint expenses than let me do that. We’ve agreed that we’ll use my HSA to pay for both of our health expenses though and I’m still using my money to pay for my personal expenses.
You probably will end up with too much money in tax-deferred accounts. I don’t know where exactly you and T are, but my husband and I already have enough in ours to cover our base level of spending at age 60, assuming a 5% rate of return. At our tax bracket though, I’m very certain we will continue adding more for years to come. Because of my husband’s “later” start saving for retirement than mine and no aggressive mortgage pre-payments, we actually have more in taxable investments between the two of us than we do in tax-deferred accounts.
Right, net worth is certainly not always relevant, but it helps a lot! 🙂
Yes, my math already projects “too much” in deferred, but I am comfortable with the ways of getting it at it if we want it early. It was somewhat intentional on my part to take care of funding retirement to the extent possible in the pre-kid phase of life. Assuming kids works out, it will be nice for retirement savings to be optional, especially when they are young and in need of care.
🙂 I definitely agree with you on the pre-kids thing! Me having more in retirement accounts also helps me be comfortable with my husband paying for more stuff right now. It still feels like I contributed somehow, even if it’s not right now with income, you know?
Not noted on the graphic – we got our dog in April 2015, which is just before things started to take off 😉 I think we should get more dogs…