When I first started this blog a decade ago, I would write regular net worth updates. A lot of anonymous bloggers did it. I shouldn’t use past tense as there are still hundreds who still do it. However, many of the people who I followed back then don’t do it any more for a variety of reasons.
I stopped too. (I’ll explain why in a bit.)
As you can tell from the title, I’ve had a change of heart of late. Why?
Tracking your net worth is important
Last night I went to my kids’ school’s parents conference. The headmaster had some interesting things to say about education about nowadays. One of them that stuck with me is that the students can get more information from a computer than a teacher. This is leading towards more “student-centric” learning vs. “teacher-centric” learning. There are pros and cons to each, but students who are motivated to learn can get more out of “student-centric” learning.
It seems much of the focus on education nowadays (at least in theory and what they are pushing at my school) is on motivating students. Of course motivation has always been important…
… but motivation is more important than ever.
There are very few things more motivating than tracking your net worth over time. Once you start automating your finances, your net worth grows and you don’t even need to do anything. We max out our retirement accounts (pay ourselves first). Our investment properties (after years of losses due to buying at the wrong time) are paying off significant principle. We have to pay money to keep the properties renovated, but the mortgage is going down each month and the property values tend to go up (sometimes a little each month… sometimes a lot).
In short… do a few simple things over time and you’ll see great results. If you see great results they will snowball.
The best way to keep track of your net worth is Personal Capital. It’s free! I have soooo many brokerage accounts (TD Ameritrade, USAA, and Fidelity to name a few) and even more bank accounts than that. My wife has a few different accounts and we have mortgages all over the place from our investment properties. Personal Capital keeps everything in one place and it uses bank-level security. Did I mention it is free?
Why I Don’t Share my Numbers
I’m going to
steal borrow from Mrs. Our Next Life.
1. Comparisons aren’t always helpful. We live different lives. Mrs. Our Next Life doesn’t have kids and we have two. We have different jobs that earn different amounts of money. It’s like comparing a score in King Kong to a score in Pac-Man. It’s not even apples and oranges.
That said, it may be helpful to have a broad idea of where we are with our finances. You can get that kind of broad from an article I wrote a couple of years ago: What Does an Annual $200,000 in Retirement Income Look Like?
2. I’m not really anonymous. The engine that makes sharing financial work is anonymity. No one wants their long lost cousin calling them up asking for loans.
3. Lawsuits and such. In helping consumers protect their money, I expose scams. Companies scamming people don’t like that. They use the money they’ve scammed out of consumers to hire lawyers to sue me using “alternative facts” to say that I defamed them. One of those alternative facts is trying to argue that my motive to help consumers is to make money damaging other companies. That’s obviously not true, and I don’t think I’m ever the first person to label these scammers as scams.
4. My net worth numbers aren’t always accurate. For years, I included my net worth, because those were the numbers I had. Then I got married and we’ve slowly merged our financial lives over the last 10 years. There are still a few accounts of my wife’s that I don’t have access to. For example, I can’t sign into her government TSP account to get an exact number. Some months, she does give me exact numbers. Other months, she’s busy so I just estimate the numbers as best I can. It’s good enough for my purposes, but not perfect like many other bloggers who track things down to the penny.
February 2017’s Net Worth
Our net worth went up 0.8% in January. That’s nearly a 10% pace for the year. I’d love to that was due to some hard work, but it was simply what it is every month, real estate and stock markets doing their thing.
We would have had a bigger gain, but we had a tenant move out which lead to some renovations. I also haven’t made much money with the blog as I’m still in the middle of redesigning the site. Also January is typically a slow month for the dog sitting business. And this January was no exception. February’s dog sitting income is already nearly double all of January.
Some bloggers track all their earnings and expenses down to the dollar. I’ve never been a fan of such vigorous budgeting. I use the the third budgeting system, which is just to focus on not overspending.
Ask the Readers: Is this Helpful?
Assume for a bit that I had a more eventful month and/or covered it in greater detail. Imagine that I had a nice graph. Is it useful to read that my income was up 0.8% in January when you don’t have the exact numbers?
Let me know in the comments.