We track our net worth regularly. It’s a great way to track your progress over time. Net worth is simply the total value of all your assets less any debt. It’s basically stockholder’s equity in your household finances.
For the first time ever, our net worth has surpassed $1Million. This is the natural result of our slow and steady saving and investing over the last decade. As markets have bounced back and are basically at all-time highs, we’re popping the champagne – not literally – we’re just continuing to do what we do. Growing our income, spending with intentionality, and consistently investing.
My net worth calculation includes college savings and cars, two items that arguably should NOT include in a net worth calculation. Cars and college factor about 10-15% of our net worth, so I include it but others may disagree. Interestingly, our car values are up 4.29% (since September) while our investment accounts are up only 2.91% (despite contributions).
Our cars apparently increased in value at a greater rate than our investment accounts
(including substantial contributions). This is probably not entirely accurate (as the cars probably wouldn’t bring the stated amount in cash) but there are certainly some weird things going on with used car prices due to short supply. Hopefully, this subsides soon and potentially creates an opportunity in a year or so to acquire vehicles at a discount.
We’re Millionaires, But, What if We’d Taken More Risk?
Total assets could be significantly higher had we taken more risk over the last 10 years. The market has exploded higher, particularly real estate, stocks, and freakin crypto. I did not invest in crypto early enough to even post it here. Of course, I’d really like to find a 10x or 100x stock or crypto, too. For example, taking my $6,000 college account and increasing it 100x would basically pay for all my kids’ private schooling and college, easily. Further, had I been taking some risk in 2014, for example, and acquired additional rentals, I would have taken on much more debt, but I’d likely be sitting on substantial gain in these properties. I could sell them now and probably have enough equity to pay off house or something else.
The big question is what do we do for the next 10 years. If we act now and take on more risk, will the market cooperate or will we have a similar regret? Ultimately, I’ve learned that I’ve been way too conservative. I clearly have a complex about potentially losing money that causes me to hoard cash. I need to be a bit more aggressive and create some growth. Had I simply been fully invested through the pandemic, our net worth would probably be 20-40% higher. Damn! Need to keep pushing and force savings. Maybe even open a taxable investment account at Fidelity.
Final thoughts – Net Worth Update – October 2021 – We’re Millionaires!
Happy and fortunate to pass the Million Dollar Net Worth Mark. It frankly doesn’t feel any different and probably wouldn’t until my home is paid off, and we’ve got employment optionality and substantial liquid assets. Something to keep working toward over the next few years or decades.