Quest for a Million – Net Worth – 12/2010

Money!photo © 2005 Tracy O | more info (via: Wylio)
Net worth. It’s an interesting concept. I first became interested in net worth when I saw that I could calculate it in Yodlee, along with all the transaction tracking and account aggregation services. Another place you can track it is at Net Worth IQ. You can check out my profile there if you like. I like their interface, and it’s interesting to compare your net worth to others in your age group or state or education or other factors. It’s very nice to see how December 2010 net worth compares to the same time period in 2009 – up almost 30%!

I think it’s important for everyone to have a general idea of their net worth. It can help put a lot of your financial pieces into perspective. For me, it’s interesting to note that 60% of my assets are tied to my personal residence. I would like this to be lower. The only way for that to happen aside from selling this house and buying something smaller is to increase other assets. At present my focus is on adding my first investment property in 2011.

When you’re looking at the table below, much of this is in aggregate. I have a multitude of savings accounts since I am continuously shopping for the best place for my emergency fund. Breaking these out would be onerous and non-informative. It’s much more useful to be able to quickly look and see my liquid assets are still far below where I would like them to be. These assets include future down payments for investment property and vehicles as well as $5,000 that needs to be added to my and my wife’s Roth this year. That doesn’t leave much for an emergency fund.

For the retirement accounts, about a third of it is tax-exempt while the rest is tax-deferred. Most of that is in stock or bond ETF’s or their fund equivalents. Investments include my son’s 529 plan which grew nicely this year. He starts kindergarten next fall so there is time to build this up. Brokerages includes a custodial account for my son and my own play trading account where I can speculate all I like. This protects me from going crazy with some of my more important accounts. Although I no longer make investments on Prosper I still have some loans that have yet to default or get paid off completely – this account will likely go to zero in mid-2011 once all the loans are paid.

On the Liabilities side, there’s not too much going on. I have revolving credit card debt, but all of them get paid in full every month so they operate more like interest free loans than anything else. My student loans are in solid shape, and I just re-financed my home at 4.375%. With the mortgage tax deduction, my effective interest rate drops to 3.159% so I’ll be in no hurry to pay that down. I do make 1 1/12 mortgage payments each month as a mildly accelerated plan to home ownership and as a guaranteed rate of return, but I will not increase this anytime soon.

I would love to hear your questions or comments on my net worth. I plan to track it monthly here from now on.

Net Worth December 2010

Real Estate
My Home (Zillow)$382,000
All Accounts$37,336
All Accounts$200,613
529 Plan$9,229
Total Assets$634,377
Credit Cards*
All Accounts$10,129
Student Loans
All Accounts$69,270
Mortgage Loans
My Home$302,229
Total Liabilities$381,628
NET WORTH$252,750
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