If you were hoping this would be a post where I wouldn’t feel the need to mention my student loans, you are mistaken. After all, net worth is calculated by subtracting what is owed from what is owned.
Hence, you could have $1 million in assets, but if you have $1.5 million worth of debt, of course you still have a negative worth.
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Despite my frugal ways, I’ve had a negative net worth for most of my working life to this point. In addition to having student loans, I also financed my first car. When I was fresh out of college, I definitely didn’t track my finances, but I would estimate that at one point, I was $100k+ in the red. Yikes.
Fast forward to today, and things look a lot better. No, I’m not anywhere close to FI, but at least I can say that I am indeed back to black. Self five!
You might be wondering how I know I have a positive net worth. Especially when I have been known to not track things as much as I probably should.
There are a lot of blogs and such that promote Personal Capital*. I decided to do so as well because I have been using it for the past couple of months. I plugged all of my accounts into it and found it very simple to use. The best part is that it’s free, so you really can’t go wrong. The only downside is probably the fact that the refreshing sometimes seems delayed, but overall, I enjoy using it.
The reason this site/app is nice is that it will let you add your accounts from many different banks/institutions, and then adds that balance to your net worth. I’m not sure how much support it has for smaller banks; all of the ones I use happen to be larger.
In any case, this is really nice because I have several different accounts. Currently added to my Personal Capital account are:
- Three credit cards
- Two IRAs
- Two 401a accounts
- One checking account
- One 401k
- One 457b
- One taxable brokerage account
Yep, every single one of these accounts is separate. (If the above is Greek to you, don’t worry. I have you covered with this post: 401k and Other Retirement Plans.)
Now, there is some overlap where more than one of my accounts is held by the same institution. Still, you can pretty easily see why this would ordinarily be difficult to track. If I had to log in to three or four different sites to check different balances, that would be a lot of time!
Luckily, Personal Capital allows me to add them all in one place. I have noticed that it can take a bit of time to refresh. But that still pales in comparison to the time that would otherwise be spent logging in to several different accounts.
My Net Worth
I’m sure by now you are dying to know my actual net worth. So, without further ado, drum roll, please…
Success! I’m a little better than broke. In other words, I am worth more than I owe. No, I’m not a millionaire. Not by a long shot. But hey, I still think I’m doing pretty well, in my not-so-humble opinion.
By the way, I should probably mention the fact that I actually have yet another retirement account that is not captured above. That plan is a retirement account I had with a previous employer, and it’s in limbo because it is currently being sent to my Fidelity rollover IRA.
The “liabilities” seen above represents the combined posted balances for my credit cards. I only have two that actually have anything on them right now. And, actually, I have already reduced those balances since I originally grabbed this snip from my account information.
This is all I have in terms of liabilities currently, but obviously, that will not be the case for everyone. Specifically, many of you out there will have an auto loan, mortgage, or both. Alternatively, you could also own your car or home. Many of you will have some combination of those four scenarios.
Adding Your Vehicle And/Or Home
I looked into how Personal Capital handles these situations, and it sounds like it could be hit or miss. For example, based on this support article, it sounds as though support for a loan will depend on the individual bank.
If you own the asset outright, you have a couple of options for tracking them in Personal Capital. However, you may or may not find them particularly useful. Their suggested way to add the value of your home is by using Zillow’s Zestimate. That value may or may not be totally accurate though, as it uses an algorithm.
Another option is to add an offline account. This could be a better option in that it allows you to add the exact value of your car or home. However, as the name implies, the site will not automatically update the value, meaning it must be done manually. So, the time saved by doing this way might prove to be marginal at best.
Other Features: Budgeting and Retirement Planning
The site has a couple of other features I found at least somewhat useful while poking around.
It allows you to add a monthly budget. You determine this number on your own, but it will then show your progress toward this number:
As it turns out, I’m not in terrible shape, but I am probably not doing the best I possibly could be, either. However, it’s worth noting that the $239 check you see above was my payment for my ticket to FinCon 2018 (!!!). The ticket was courtesy of Mrs. Groovy, by the way.
Considering the fact that that number is almost exactly the same as what I’m over, and I don’t typically buy FinCon tickets, I am actually right where I need to be.
I also found the retirement planner to be reasonably useful. You are sent through a wizard that asks you for key information, such as your annual retirement savings, when you want to retire, and your retirement savings rate.
Once you add that all in, it will show your chance of meeting your retirement goal:
Again, not terrible, but I would like that number to be 100%, if possible. That said, I do intend to increase my savings rate in the next 3 years, so that should help a lot.
We All Start Somewhere
I’m sure you have heard this saying before. I have spoken before about the importance of saving for retirement. And not just the importance of it, but, specifically, doing so early and often.
And yet, I very much understand the brooding of the masses when they were told to have twice their income saved by 35. After all, I am not sure, based on where I am right now, that this will be possible for me. I’m giving it my best shot, but it will be tough.
You know what though? The truth is, it doesn’t really matter. Benchmarks are just that: a figure for which you should aim. If you miss the mark by a small margin though, it isn’t really a cause for significant concern.
I hate to get all “A for effort” on you, but there is something to be said for that concept. After all, if you are saving as diligently as possible, that is what is most important.
Your ability to reach some arbitrary goal set by MarketWatch? Not as important.
Each one of us has a wildly different set of circumstances, and they will almost undoubtedly have a significant impact on our finances. I feel as though I started a bit behind due to the large amount of student debt I had, but I’m trying not to harp on it.
Instead, I am saving as much as I possibly can. And that’s enough.
Things will only get better from here. That’s what I’m focusing on. Continuing to save, so that I can create a better future for myself. Hopefully, you are doing the same. And if not, maybe this can serve as a source of motivation for you.
So get out there and start saving. We all start somewhere, but it’s where we’re going that really matters.