Lazy Man and Money

What’s My Pension Worth?

by 8 Comments

The short answer to that question is zero, because I don’t have a pension… however, my wife does. She completed 20 years of military service in March, but continues to work (for now).

Pension - Net Worth

Earlier this month, I asked the question “Should You Include Your Pension in Your Net Worth?” and found that opinions were generally mixed. Most (61% in my small Twitter poll) believed that you should include it. This is consistent with how finance professionals and divorce courts view it.

However, there are still plenty of people who feel that a pension shouldn’t be included in your net worth. They explained that a pension is future money that you don’t have and can’t gift in an estate.

I ended up deciding that I’ll keep two logs. One log will count all the traditional assets and liabilities used in a typical net worth calculation. The other log will include the value of a pension and this website. I don’t know if there’s any great value in keeping two logs, but there’s no harm and it is a little work once you calculate the values. Also it doesn’t matter since net worth numbers don’t drive any of our financial decisions.

The first question in the comments of the article was what I wanted to write about today.

“How do you value the pension?”

If you are going to include a pension in your net worth, you have to have a number to plug in there. Fortunately, there are a couple of different methods that we can compare and contrast. For the purposes of this article, I’ll be presuming a military pension, but your pension circumstances may vary. If you are in the military, you may also be interested in “When should you retire from the military?”

1. Calculating Pension Value using Life Expectancy

The first idea that came to mind is to use the simplest math possible. My wife’s pension will be $[X] when she retires. Her life expectancy will be roughly [Y] years. The number of total pension dollar she’ll be paid is “$X * (Y – [current age])” The Social Security Administration has a life expectancy calculator that’s helpful.

Plugging my wife’s information into the calculator shows she is estimated to live another 41.7 years. That’s just as cold as I expected from the SSA. There are other life expectancy calculators that may be more accurate by factoring health and lifestyle behavior. This is good enough, especially because nothing is guaranteed.

My wife is a fairly high ranking officer (so proud!). If she retired tomorrow, her pension would be $55,462 per year. Simple math gives us: ($55,462 * 41.7) = $2,312,765.40 total pension dollars. (Since military pensions grow with inflation, we don’t have to worry about eating up the buying power.)

If my wife continues to work longer, you might think this method would value her total pension as being worth less. After all, she’ll have fewer expected years to collect. However, the pension will grow with more years of service.

2. Calculating Pension Value with with Annuities

On its most basic level, a pension is an annuity. Thus we could look at how much it would cost to buy an annuity equal to the monthly payout of the pension. I found a couple of calculators online, but they tried to get me to sign up and/or give personal information that I believe would lead to a sales pitch.

One showed that it would cost around $1,200,000 to produce the same $55,462 per year in income. I was surprised that it was so low. However, that $55,462 was not inflation-adjusted, so that $55,462 in 40 years from now is really worth $20,655 (assuming 2.5% inflation).

I next looked for inflation-adjusted annuities. Unfortunately, while they exist, they are harder to find and seemingly impossible without getting caught in the potential sales pitch.

For now, I’ll presume that the 1.2M in annuities without inflation protection would be about the same as the 2.3M number by using life expectancies when inflation protection is factored in. It at least seems plausibe.

3. Calculating Pension Value with Treasury Rates

A third way to look at a pension is by using Treasury Inflation-Protected Securities (TIPS). If someone gave you $1 million dollars and you put it in these, extremely safe investments, how much money would they generate each year. Current treasury rates between the 20-year and 30-year are very low, with an average of around 0.85%.

Thus we could say that hypothetical gift of a million dollars would yield only $8,500, a far cry from the $55,462 number we are aiming for. We need to work it backwards and take the $55,462 number and divide that by the 0.85% yield.

The result is that the pension is worth $6,524,941.18. That seems very wrong! It seems the problem is that interest rates are just too low.

What if we use another metric? The 10-year government bond rates is currently 2.33%. Using is makes the estimated value $2,380,343. Thus, if you invested $2,380,343 and were able to get a relatively safe 2.33% interest rate, you’d get $55,462 in interest.

However, the 10-year government bond rates are not inflation-protected. Twenty years from now, the $55,462 that you get back from that calculation will not have the same buying power.

4. Calculating Pension Value with a Finance Calculator

I found an interesting article on Sapling.com about calculating pension value. It uses a financial calculator, which is something that I’ve never been good at. It looks like this might be worth more value when you are looking at a point somewhere in the future when you get access to the pension. For us, it doesn’t seem to work since that date is not determined.

Final Thoughts on What a Pension is Worth

It’s hard to put a definitive number on what a pension is worth. However, considering that the first, second (after inflation-adjusting), and third calculation all came to about the same $2.3 million number, I will use that for the second net worth log.

That’s a very, very large number. It’s so big that it dwarfs much of our other financial assets – as you would expect. That’s why I’d keep it in a separate net worth log. It’s also a good time to reflect that I created this blog and have written about FIRE for the last 13 years because I knew my wife’s financial contribution wasn’t just her salary, but also a large stream of passive income. In 13 years of time, I haven’t been successful in creating $55K+ of annual passive income to match her. However, our alternative income is getting very close.

I don’t believe there’s a firm right or wrong answer to what a pension is worth. Fortunately, this is one area when a reasonable estimate is usually good enough.

Advocare Forced by FTC to End its Scam

by 9 Comments

There’s so much politics in the news nowadays that some really important stories are falling under the radar. For example, the NXIVM alleged “sex cult” MLM involving celebrity actresses and heiresses is getting very little attention. That particular link is just the latest news that came out yesterday. Stuff like that has been streaming out for a year or two now.

For a long time, I covered MLM scams as a side project here. MLMs fit well within personal finance territory because they bill themselves as a entrepreneurial opportunity to make extra income. They even fall within the area of FIRE (Financial Independence/Retire Early) because they pitch the idea of working for yourself with just a few hours of week.

Stop MLM

Of course those claims are too good to be true and the real “opportunity” is to trap a dozen others in a money-losing pit to boost yourself out. Not only that, but MLMs are NOT businesses since they avoid many core basics of business.

After reviewing a few dozen MLMs on the site, I realized there was a pattern. Each one would say that their MLM is different or better, but except for minor inconsequential details, they were the same. In fact, there videos like this one (not made by me), that covers many of the basic ingredients:

Of course John Oliver does the job with a lot more humor making it hilarious to watch:

Because each MLM seemed so similar, I decided to posit a theory… that every MLM is a scam. I realized that this would be practically impossible to prove for two reasons:

Despite this, no one has been able to meet the challenge of showing me a legitimate MLM. A few have tried with hilarious failings such as the ViSalus scam.

However, what I wanted to show with that article is how they all could be scams. My idea was based on the fact that MLMs contribute fiercely among themselves for distributors. This is done in secret much of the time, but it leaks out through lawsuits that companies poach other distributors. This is almost always done by targetting someone high up and getting their entire recruited pyramid of people – sometimes referred to as a downline in MLM.

My theory was that a legitimate company basing commissions on sales and not recruiting is at a competitive disadvantage. It’s an impossible sales pitch to tell someone with a big pyramid of recruits that they have to make money selling product by knocking on doors or setting up yard sales. Thus, I presumed the reason why no one can name a legitimate MLM company is because one doesn’t exist because it can’t exist in the competitive environment. Specifically:

If you are going to try to run a legitimate MLM organization, how can you draw people to your business and compete in an environment of illegal pyramid schemes? You can’t. If everyone is allowed to put a pile of aces up their sleeves in a poker tournament and you play an honest game, you aren’t going to be in the tournament very long.

Imagine if there were no drug testing in the NFL. It would be extraordinarily difficult for a clean linebacker to compete for a job against a group that are extensive steroids users.

FTC Forces Advocare to Leave MLM

I’ve often said that if any MLM wants to prove it is a legitimate company they can simply switch to single-level commission sales. Take the recruiting out of it. If your commissions structure is good enough, you don’t need to pay people to recruit people to it. There are lots of people who make a very good living on affiliate sales. If you’ve read personal finance blogs, you’ve seen them for hosting or financial management software*. Those programs are free to join and there’s no recruiting to them.

It’s such an easy solution to the pyramid scheme problem that MLMs face that no one has questioned it. The MLM supporters just have to change the subject, because if it doesn’t have the pyramid scheme recruiting aspect, they don’t count it. And they are right, the pyramid scheme recruiting aspect is the multi-level in MLM.

The big news is that Advocare has decided to do what seems to be exactly what I proposed… remove the pyramid scheme aspect of their compensation plan.

I applaud this decision because my analysis lead me to have the opinion that AdvoCare was a scam.

At the end of last week, Advocare released the official statement that it “gave notice to its more than 100,000 Distributors… [that] AdvoCare will revise the business model to a single-level distribution model, paying compensation based solely on sales to direct customers.”

The reason for this change isn’t that Advocare decided it was best to get away from what appeared to be a pyramid scheme. Instead it cited that it has been in “confidential talks with the Federal Trade Commission about the AdvoCare business model and how AdvoCare compensates its Distributors.” The CEO futher declared that “Based on recent discussions, it became clear that this change is the only viable option.”

While it would be great to have all the details of those discussions, it sounds to me that the FTC has finally started to regulate the MLM industry and is applying the same test I suggested.

It’s also important to note that there’s a federal lawsuit that alleges AdvoCare is a pyramid scheme. The suit uses AdvoCare’s own numbers to show that only 2000 of the 600,000 distributors make more than a minimum wage income. So you have about 0.33% (1 in 300) of doing better than any minimum wage job.

In the past when an MLM aspect has been terminated a company has become a shell of itself. The FTC specifically detailed the loss of business that Burnlounge experienced. The FTC similarly brought Vemma’s scam to an end by forcing it focus on sales and not recruiting.

Interestingly, a bunch of MLM people left one MLM to make another MLM called Yevo. Before that company got too far along with their $5 a serving oatmeal, they switched away from the MLM structure. I had received an email that the FTC was cracking on them, but I couldn’t verify its accuracy, despite it making the most logical sense to me. I don’t think the company is still in business.

Like the others, $40 juice or $5 oatmeal doesn’t seem to sell without a pyramid recruiting “business” opportunity.

What’s the Reaction of Advocare Leaving MLM

There are some websites that cover MLM in detail and give additional commentary such as this article. Many MLM distributors visit and comment freely. I don’t want to promote some of them, because I believe they profit by promoting the scams as a regular business. However, I will say that most of the discussion has some very UPSET distributors.

On one hand, it’s hard to blame them. They’ve been told that building a recruited pyramid is a good, legal business. Now they are being told that they’ll have actually sell products themselves instead of the recruiting.

On the other hand, if they had been doing selling products instead of pyramid recruiting there’s no change. There’s nothing to be upset about.

Final Thoughts on AdvoCare

It would be really interesting if AdvoCare was a publicly traded company with earnings that we could review. We might never hear how this impacted their business. My guess is that you’ll see dramatically lower cost products that can compete on their merits. Usually, MLM products are overpriced, because they’re used as an admission ticket to the pyramid recruiting building scheme.

This is an extremely big deal in the pyramid scheme/MLM world. If it can happen to Advocare, it can happen to anyone.

It’s also a reminder that it’s a bad idea to attempt to build a “business” on recruiting downlines or “teams” of recruiters. Not only are the odds of success extremely bad, but any kind of “success” means you put a bunch of others in a financial hole. And sometimes you wake up one morning and find that you never really had a business anyway.

For more analysis of MLMs I’ve covered in the past see:

* I have affiliate links for personal finance management software and blog hosting too, but I rarely include them in articles.

Starting Your Kids on a Financial Independence Path

by 7 Comments

Everyone is a product of where they focus their time and energy, right? As you can tell from this blog, much of my focus is on personal finance, especially financial independence. In my personal life, much of my focus is parenting two boys, ages 5 and 6.

Kids-Financial-Independence

Getting them started on a path of financial independence is inevitable. Given their age, we are working with simple things like chore charts and saving money for special toys.

One of my biggest concerns is the changes in the world. When I growing up in the 80s, I knew programing a computer was the future. Nowadays, retail stores and newspapers are closing. The automotive industry may nearly disappear as robot, on-demand cars may mean car ownership and driver jobs are a thing of the past. Artificial intelligence promises to disrupt more markets.

I know that most people think new jobs will be created. That’s probably true, but who knows if enough good jobs will be created. It seems that the current trend is replacing journalist jobs with influencer jobs. That should concern us all.

We can’t change where the world is going, but we can help prepare my kids. Here are a few things that we’re doing:

Teach Core Life Skills

This is a no-brainer. Some skills never grow old and can directly influence your bottom line. Here are the first two skills that came to mind. If you can think of more, I’d appreciate it if you could please drop me a line in the comments.

1. Cooking

Food is often one of people’s largest expenses. It doesn’t have to be. Eating out at restaurants is expensive. If you know the basics of cooking, going out to eat is less appealing.

We’ve got the kids enrolled in an after-school cooking class. They might not be learning much. (I’m still waiting to be served breakfast in bed.) However, they are learning and enjoying it. Those are the important things at this age.

In conjunction with learning cooking, I hope to teach the boys how to shop to save money. This will include updated versions of the following articles:

Being able to manage and limit one of their largest expenses can only help their financial bottom line in the future.

2. Handyman

I’m not handy at all. I can’t fix anything. I can barely work a screwdriver. If something breaks, I have to write a check.

That’s not good, especially for landlords like us. If you are good at fixing things and home improvement in general, you can create a lot of real estate opportunities with just sweat equity. You can fix up the house and move repeating the process over and over. You may even be able to keep the money tax-free when you sell. It may be a long time before artificial intelligence replaces carpenters and plumbers.

Perhaps someday, one of their jobs could be a managing our real estate “empire” and we could pass money and equity to them over time. I haven’t figured out exactly how this arrangement would work, but in theory there’s an opportunity there.

For now, I just want my kids to be better than I am with any handyman stuff. Home Depot has “kid workshops” once a month, but we haven’t had a chance to get to one yet. They also have workshops for adults, so maybe it’s not too late for me to learn a thing or two to pass on.

Personal Finance

I don’t think I’ll have to focus on teaching them too much about personal finance. I half suspect that they’ll learn it from osmosis perhaps like I did from my mother. However, I can give them a couple of boosts.

If they don’t master personal finance from osmosis, they can fill in the gaps with my Ultimate Guide to Financial Freedom. I’m hopeful that when they are older they’ll give their old man 10-15 minutes to read the Cliff’s Notes to financial success.

As a practical matter, I recently wrote about their kid Roth IRAs which will give them a head start in saving for retirement.

Education

Education is one of the foundations for a high-earning career. We’re investing a lot in private school now in hopes that it will set them on a great path for the future.

I’m still not sure that’s an optimal investment. For example, an episode of Teen Titans Go! (one of my favorite kid shows) brings up the idea that investing in a rental property is better than college. I don’t agree, but it’s an interesting topic. Of course, the Teen Titans teach a lot of personal finance.

Finally, it’s helpful that the the best financial independence book is actually a kids book.

Final Thoughts

One of things that I’m hoping to balance is giving an opportunity versus handing them too much. That’s why they are earning their kid Roth IRAs by picking up dog poop. That’s also why I think they would have to be property managers before they reap the benefits of the rental properties.

Alternative Income Update: April 2019 ($8,469.38)

by 2 Comments

It’s the middle of the month, so that means that I have the final alternative income numbers for last month. It always takes awhile for the tenants to have their rent checks in and for us to get all the money moved.

April was another busy month for us. In addition to all the financial stuff below, there was a lot of family stuff going on. The kids are still taking swim classes and one moved up a level. We reached a crucial milestone where if they fell into a pool they wouldn’t drown (I think). The older, 6-year old was one of the stars of a school play, so we’ll probably be investing in children theater classes in a few months. The younger, 5-year old seems to have acting in his blood, but he’ll have to wait until he’s 7.

They accidentally got renewed in a cooking class after school, so we just rolled with that. It’s great money-saving skill to learn at a young age. However, it means that we have to miss the local chess club. In a text document somewhere I have some research into Android apps that may fill the gap as long as they are still interested.

This also happened:


Both kids asked me if they could learn Japanese so they can work at The Pokemon Company someday. We’ve got more than 20 straight days on Duolingo together. We’re also learning French because their school starts that in Kindergarten. We’ll have to plan a trip to Canada in a little bit.

I’ll mix in some pictures throughout the financial update, because numbers can be boring.

If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll have a lot of questions.

Lazy Man’s Alternative Income – March 2019

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

This summed up our dog sitting in April:


Sometimes it felt like we had 101 dogs during the month. It was just a tremendous month where we were at our limit for a little while.

Blogging income for April was far above average as well. For some reason, advertisers were coming out of the woodwork and business was great.

In March, we were on vacation and these combined for a total of $2,148.86. In April, it was:

Total Blogging + Dog Sitting Income: $4,975.38

Ba-BAM!!

That’s the best these categories have done since 2017 and it’s nearly double what I’ve been averaging for a long time. The only downside is that I don’t think I discovered a secret that could lead to sustained success.

Here’s a historic chart with the red line being a 3-month average:

dogs blogs Income

2. Rental Property Income

Zillow kept the value of our rental properties about the same. Like every month, we paid off a couple thousand of mortgage debt. It was boring, but in a great, slow and steady way.

We now have 55.20% of the equity in our properties with an estimated combined rent of $3,325. The rent number is after insurance, property taxes, and condo fees. That’s so we can estimate what we’d really be taking home after expenses.

If you multiply $3,325 by 55.20% you get $1,835 in estimated monthly alternative income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 27 months, we’ve seen the number grow $661/mo. That’s like giving ourselves an annual $8,000 raise until the end of time from where we were just 2+ years ago.

The kids put on some fancy clothes for Easter Bunny.

As the years march on, the ratio will grow to 100% of the $3,325 monthly inflation-resistant rent. That’s what gets us to that annual $40,000 income I mentioned in the FAQ.

In the previous report, the rental property income was $1,819. This number always moves slowly. This number only changes if one of two things happen: 1) The properties go up in value. 2) We charge more for rent. Later this year, we should be able to raise the rents a bit.

Total Rental Property Income: $1,835

3. Dividend Income

April did nothing for our portfolios. The stock market soared in April, but I didn’t get to take the numbers until May 11 – after Trump escalated the trade war with China causing the markets to give up their gains

Total Dividend Income: $1,659

Last month, it was $1,656, so we gained $3 of theoretical monthly money from theoretical dividends. Earlier in the month, I think this would have been $1,700 or close to it. This is an all-time new record for us, but obviously not exciting.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some residual income from books, movies, or music, we’d include that here (but we don’t have that).

The stock market goes up and down fast which makes the dividends calculation fluctuate a bit. The rental property income keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen.

The Kindergarten didn’t just act in the play, but made the sets. I was only useful at consuming paste at this age.

Having both types of income working together for us is great. The diversification gives me great confidence that we’ll be better prepared than most people in the case of an unfortunate event. We’ll still likely get rent checks if there’s a brief trade war in China. We’ll still get dividend checks if a tenant is late paying one month.

Very Close to Passive Income: $3,494

Last month it was $3,475, so it’s up $19. Last month was an all-time high, so we continue breaking records. It has grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these two sources to $41,933. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet. However, I’m looking forward to 9 years from now when the mortgages on the investment properties are paid off. Add in stock market growth (of a conservative 4%) and this number could reach $85K/year or more.

Final Alternative Income

When you add up “dogs and blogs” to the “very close to passive income” you get:

December’s Very Close to Passive Income: $8,469.38

That would be $101,632.56 a year. I’ve been trying to get this number over $100,000 and we’re finally there. However, I don’t think we’ll stay over $100,000.

That largely hypothetical annual income for writing on a blog, and taking care of dogs, and investments feels a little like a dream. In the long term, that 100K+ would be a lot more income than we’d need. Here’s what our expenses for the next 45 years looks like.

This is what happens when you have a bazillion bad cavities. Pikachu and Squirtle for moral support.

These numbers don’t include any of my wife’s bread-winning pharmacist income, her NOW VESTED military pension or some of the freelance work I’ve been doing over the last several months.

As always, I’m still hoping to write a book someday. I’m probably going to tip my toe into self-publishing soon. I would love to talk to a real a publisher, but I don’t want to take on the “job” of writing. If you know someone who I could talk to contact me.

Net Worth Update

My net worth updates aren’t very exciting as I don’t share the exact numbers. That’s why it’s little more than a footnote here.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth can be useful, I think? (Let me know in the comments.)

I use Personal Capital to track my net worth and it makes everything easy. It’s free and you should give it a try. For full disclosure, I might make a few dollars if you do.

With the stock market not doing much and Zillow valuing our rental properties the same, there wasn’t much to impact our net worth. However, a neighbor sold their home and I think it triggered to Zillow to update their math as the value of our home went up. Our total net worth went up 0.95%. For the year it’s up 20.76%, a large percentage of that was based on a website sale that I had at the beginning of the year.

I always have to remember that percentages can be weird due to the law of large numbers. Imagine someone with a net worth of $100 finds a $100 bill on the ground. Instantly it doubles his/her net worth. As our net worth grows larger, the percentage of growth will come down too. You’d rather have 10% growth of a million dollars ($100,000 gain) than 20% growth of a $100K ($20,000 gain), right?

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask Should I Include a Pension in Our Net Worth?. I decided that it does make sense to do it. Later this month, I’m planning to write how to make such a calculation. It’s a big pension that’s potentially worth $2 million or more.

However, because that would ridiculously dominate our net worth, I think I’ll include it as two separate numbers in our spreadsheet. Since I don’t share the numbers anyway, except for these hints, it shouldn’t matter much.

How was your April? Let me know in the comments.

Should You Include Your Pension in Your Net Worth?

by 4 Comments

In late March my wife reached 20 years of military service qualifying for half of her basic pay. She hasn’t retired yet and as she continues to work the pension has the potential to rise exponentially.

Pension - Net Worth

Pensions are very rare nowadays. It seems like almost all companies have stopped offering them. Often companies have difficulties fulfilling those pension obligations. Pensions are still a part of many careers such as teaching, law enforcement, and firefighting. Typically those pensions are set by a state formula and each state is different. Sometimes states mismanage the pension fund. It seems that I’m often reading about how some corruption raided the pension fund.

Military pensions are indexed to inflation. They are also backed by the US federal government. As far as pensions go, it doesn’t get much better than that. We are grateful to have this tremendous financial benefit.

However, it does raise some interesting questions. Chief among them is:

Should we include the pension in our net worth?

I’ve been tracking my net worth with a spreadsheet since at least 2006*. What started as a very simple spreadsheet of a couple of bank and retirement accounts has expanded to incorporate my wife’s assets**, two kids assets, 3 rental properties, and a pile of formulas (liquid cash, real estate equity, and debt/net worth ratio, rule of 4%, etc.). I used to update it every quarter, but over the last 5 years, I’ve religiously updated it every month. It’s not a coincidence that I’ve been more motivated with this bull market

It’s been a tremendously helpful tool. However, like most tools, you can choose to use it how you want.

Some people choose are adamant that you can’t include the value of the your home in your net worth. They say that since you can’t use that money, it shouldn’t count. I never bought into that argument because there are options to access that home equity such as downsizing, getting a second mortgage, or a reverse mortgage. However, the biggest reason, I include the value of my home is that, if you own it, you don’t have to pay as much for your largest living expense. It’s mostly insurance, property tax, and maintenance.

But let’s get back to pensions. They are a little trickier. That’s money coming in the future. If you don’t have a pension, you can think of Social Security as something similar. Would you include the value of your Social Security benefit in your net worth? I don’t know anyone who does that. To take it a step further, I know very few of my personal finance blogging peers who factor Social Security into their retirement plans. Almost all would say it’s the cherry on top of the sundae, not the ice cream, hot fudge, nuts, and whip cream.

I decided I’d ask Twitter. My timeline typically consists of personal finance people, so it’s somewhat knowledgeable.

While 44 votes may not be enough, a 61% majority gives a slight edge to “count pension in your net worth.”

I’d put myself in that 61%. A pension can save one from having to directly put as much money into their retirement savings. That can free up hundreds of dollars a month that other people would put into their retirement plans. Also as one lawyer pointed out, pensions are considered assets in divorce court.

As I continued down this rabbit hole, I felt more and more confident about my position in counting it as part of our net worth. However, then I thought about this website. It’s a business that brings in income. It’s an asset. Theoretically, I could sell it. I’m not sure who would want to buy it, but there are some guidelines of how much it would be worth.

Yet, it’s never occurred to me, before now, to count this website in my net worth. I’m not sure many personal finance bloggers do… unless they sell it and unlock that value.

At the end of the day, you can calculate your net worth however you want. It’s simply a number. It doesn’t change the underlying finances.

* I remember using Quicken before that, but I was too Lazy to import and categorize everything and moved to a new system.

** We keep some assets separate, but even if we didn’t, some finances simply can’t be combined like her TSP or Roth IRA.

About

Learn more about Lazy Man and Money, how the site developed over the years, and more at the About page.

Recent Posts

Connect