Money Reasons

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Posts Tagged ‘net worth’

Our Net Worth Increased By 455% In A Ten Year Timespan

September 6th, 2011

From the year 2001 to 2011, our net worth has increased by 455%!

401k Performance History

Okay, first let me saying that any increase in net worth really depends on the starting amount and the ending amount. It’s easy to be amazed by a percentage like 455% until you consider the starting amount.

For instance let’s look at a few examples:

If my starting amount was $100, that would mean that I have $555 dollars today, not so impressive after all huh!

But if my starting balance was $100,000 then I would have $555,000, that’s a much nicer chunk of change!

What I used to calculate our net worth:

Roth IRA (didn’t exist back in 2001)
401k Balance (not to shabby even in 2001)
Home Equity (This is the biggest chunk of my net worth)
Checking Account Balance (stayed the same, surprisingly grrr)
Brokerage Account (big jump, yay).

So as I’ve said before, we’ve never had a year where our household income has exceeded $100,000. But since my wife and I are frugal, and I’m investing a decent amount of our discretionary income, we were able to grow our net worth nicely. While I won’t reveal our actual net worth number, I will say that it’s over $100,000.

Here are some random statistics about our change in net worth from 2001 to 2011:

Around year 2003, I started a Roth IRA
While my home value is the largest percentage of my net worth, my brokerage account had the greatest percentage increase (over 1000%) during the past ten years.
The amount in my checking account has remained at $5,000, but that’s because I have my money working for me.
My 401k has increased nicely too, over a 10% annual return since 2001. Back in the early days, I had some great appreciation in certain mutual funds.

We were able to do the above activities because we sacrificed and saved like we were still in college. Back then, we only went on a real vacation every other year or so. Our house is full of nice looking but mostly used furniture and hand me downs. We always looked for opportunities and took advantage of great values when we recognized them.

Hopefully for the next ten years, we can increase our net worth by 200%, I don’t think 455% is sustainable and not a realistic goal for the next ten years.

Do you frequently calculate your net worth change from the past to the present?

Bests,

MR

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Posted in Wealth

Tags: how I increased my net worth increasing net worth net worth sacrificing to get rich

Income Loss From My Wife Being a Stay at Home Mom

December 20th, 2009

After posting “How I Have Lost Over Half A Million Dollars Having Kids, So Far!”, I started thinking how many of my family and friend’s spouses work.

Let me start with our parents… both sets work. All the people I know at work, their spouse work. My boss who makes at least twice as much as I do, spouse works. Where I live, only one other neighbor’s spouse doesn’t work, the rest do. My college educated sister and brother-in-law (great people), both work. My sister is having a baby in Feb. 2010, and she claims she’s going back to work a few weeks after the baby is born. They already make more than me…

So, I decided to go out to the website: money.com to use their calculator for net worth and see what the median (the median, mind you) net worth would be for someone in our conservatively theoretical income range! The number came out to be $644,100.

: Missed Income

And that is the median! Both my wife and I are very frugal, and based on our frugality habits, I recalculated the number… I figured for us it would be somewhere in the $800,000 to $900,000 range, Grrrr!

Who is to blame for this? Well, unfortunately me! My wife and I discussed whether she would work or stay home raising the kids years before we had our first child. I told her once I make over a certain amount, she could stay home. Ironically, I accomplished that number more quickly then I imagined, and so she stayed at home after my son was born.

In hindsight, I don’t think this was the most prudent move on our part. It especially hits home seeing my 20 something sister start to pass me already with respect to net worth (did I mention that both she and my brother-in-law are both studying for their MBAs? If a future post, I’ll have to tell the story about how my sister won a free house).

Soooo, now that I know I’m behind compared to our theoretical income group’s class, what can I do? I’m thinking it’s time to start some side hustling (frugaldad.com’s word phrase).

How do I feel about my discovery? Sad, but not too disappointed. My kids are doing very well in all aspects of their development. It’s a hefty price to pay though, especially when we’re practically the only ones doing it in these days of the two income earner households. Shoot, If we had that money now, I could go into a semi-retirment state if I wanted to (I’m not old enough to think about that now though)…

Oh well, the moral of the story is, think twice before and your significant other decide to quit work to raise your kids.