Tracking the Neighborhood Finance Guy's Best Million Dollar Net Worth

Table of Contents

Prequel to the Neighborhood Finance Guy’s Net worth Monthly Review Series

Wait… what is a net worth? The nerdy version – your Assets minus your liabilities. In simple terms, what you have (value wise) vs what you owe. This goes way beyond what’s on your bank statement or what you see on the app.

A net worth breakdown is a full exposure and evaluation process. Most people are scare to look at their number. For post college grad, it’s likely negative but that’s ok. That can change rather quickly if you put in the effort to invest in yourself first. It doesn’t matter if it’s 2019 or 2020 – a quick review helps.

For this net worth break down, I will primarily use personalcapital.com which auto updates your data so you don’t have to do this manually. It helped me get from Negative $125,000 in 2012 to north of $340,000 in 2020. It also has other features including investing review, retirement planner, debt payoff tracker, etc.

For this example, I’ll be using my Fiscal 2019 numbers:

The Big Picture

What we have?

The assets category covers:

Cash – Either it’s free cash flow on hand for monthly expenses ie Checking Accounts, and generally some higher interest savings accounts.
Emergency Fund – That should go without saying. However while other keep a very high saving account at their back earning less than 1%, I favor being credit card liquid instead. That means if something happens, I cover it with a credit card first for the points and the expedience and pay for it later by moving money around. Besides, never seen someone ask you for your bank savings in an emergency, Visa is everywhere in an emergency.
Investments – Those are divided into:
1. 401ks – which makes up 63% of the investments
1. Individual Retirement Accounts (IRAs)– Traditional and Roth IRAs. With the Traditional rolled over during times when our taxes are slated to go down which will balance it out.
1. Health Savings Accounts (HSAs) – HSA which tags along for our health as we stack for the future.
1. 529 Plan – For my nephew.
Other Investments – This includes property values for my home and the rental (that I purchased with my Mom) and other misc. investments that the personal capital software can’t seem to call investments such as Lending Club, Car values ie $750, and Investment Group Personal Contribution (tracker).

What we owe?

The liabilities category covers:

Mortgage Debt – How much you still owe on the home. Some people opt to leave the home off the Net worth statement, their rationale is that they won’t sell their home. I keep it in since that how net worth is defined total assets minus total liabilities.
Credit Card Debt – Everyone is familiar with that part. Quickest way to improve is to pay it off and never carry more than 10% on the card. Anything over 10% starts to wreck shop on your credit score.
Student loans – $90,000+ are my Graduate school loan which charge about $730/month.
Other Liabilities – That’s merely my TSP i.e. 401k loan from 2017 that I’m paying off $130.82/pay period. Don’t worry the loan is about 2% back to me and will be paid off before January 2021.

The Final Snapshot

Think of your net worth as a report card. Avoiding it doesn’t work. Tracking it can help you see the mistakes or the opportunities that you might be forgoing. I can’t guarantee you that it won’t sting the first few times you see your numbers but over time, you will gain more mastery over your money management skills.

Check out the Mid 2020 Net Worth Breakdown.

Bonus Resources that I swear by:

One of my favorites, The Money Guy Show goes over the average net worth for every age group! (2020 Edition). Tracking your assets, liabilities, and bottom line will show you where you are, where you should be, and how to maximize your money.

Download FREE Financial Resources from the show ➡️

https://www.moneyguy.com/resources/

Watch our Financial Order of Operations (FOO) overview ➡️

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