March 1, 2011

Net worth Update : February 2011 - $4,851

I track my net worth monthly on NetworthIQ.

Our net worth for February 2011 was $647,872.   That is a $4,851 drop from January.

We fully funded a Roth IRA for my wife this month so that dropped our cash but increased our retirement.   Net change for cash and retirement was positive.   The key reason our net work dropped was that our real estate values continued to decline.  Since we own rentals a considerable amount of our assets are in real estate so if the value drops a little then it can hit our net worth pretty hard.   I'm hoping that the property values stop dropping soon.

1 comment:

  1. Good job! Figuring out your net worth can be tricky and you can play games with it if you are so inclined to puff up the numbers.

    But how do you calculate the value of an annuity in which you are not vested? Do you (I am asking you this question, personally, not rhetorically or to the reader) count Social Security you are expecting?

    Or how do you value a pension that includes cost of living increases?

    And do you include equity? Not everyone does.

    I also own rental property and it too has taken a hit in value but how do you place a value on it for the purpose of calculating your net worth. I mean, obviously, you could just Zillow a value and compare it to the mortgage balance. But what if you do not have a mortgage?

    What if you paid cash and the return is equal to 6% cash on cash? Why couldn't you value it like an annuity?

    Even with the intricacies of doing so, I think tracking your net worth is a very valuable exercise and goals pertaining to growth in it very effective as goals go.


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