Net Worth

78 comments

In the spirit of transparency, I will provide monthly financials so that we can track my net worth on a monthly basis.  As I stated in an earlier post, I track my net worth almost daily for the past 4-5 years.  You can find my net worth trend here.  If you would like further details, please contact me.

Definitions:

  • Total banking (all checking and savings accounts)
  • Total Investments (401ks, Roth IRAs, 529, charitable gift fund, and personal investments)
  • Real Estate (Primary Home and 2 rental properties 1 rental property)
  • Other assets (Cars at current KBB value , stock purchase plan, pension lump sum, reserves in escrow)
  • Loans (Student Loan)
  • Mortgages (Primary Home and 2 rental properties 1 rental property)
  • Other Liabilities (Charitable Gift Fund, car loan, and security deposits)

Net Worth Update:  September 1, 2014

Assets     Liabilities
 Total Banking  $                  82,994  Credit Cards   $        10,041
 Total Investments  $             1,356,467  Loans (Student)   $        50,153
 Betterment  $                102,638  Mortgages   $       518,726
 Wealthfront  $                103,467  Other Liabilities   $       151,475
 Real Estate  $             1,055,000  Total Liabilities   $       730,395
 Other Assets  $                102,887
 Total Assets   $             2,597,348    
 Net Worth   $         1,866,953

 

Net Worth Update:  August 1, 2014

Assets     Liabilities
 Total Banking  $                  91,657  Credit Cards   $          5,077
 Total Investments  $             1,300,633  Loans (Student)   $        50,365
 Betterment  $                 99,250  Mortgages   $       521,089
 Wealthfront  $                100,060  Other Liabilities   $       153,475
 Real Estate  $             1,055,000  Total Liabilities   $       730,006
 Other Assets  $                101,876
 Total Assets   $             2,549,166    
 Net Worth   $         1,819,160

 

Net Worth Update:  July 1, 2014

Assets     Liabilities
 Total Banking  $                101,160  Credit Cards   $          5,079
 Total Investments  $             1,325,765  Loans (Student)   $        50,562
 Betterment   $                 99,120  Mortgages   $       525,601
 Wealthfront   $                100,068  Other Liabilities   $       153,475
 Real Estate  $             1,055,000  Total Liabilities   $       734,717
 Other Assets  $                100,650
 Total Assets   $             2,582,575    
 Net Worth   $         1,847,858

 

Net Worth Update:  June 1, 2014

Assets     Liabilities
 Total Banking  $                253,099  Credit Cards   $          8,632
 Total Investments  $             1,218,491  Loans (Student)   $        50,773
 Real Estate  $             1,055,000  Mortgages   $       526,347
 Other Assets  $                  99,957  Other Liabilities   $       214,975
 Total Assets   $             2,626,547    Total Liabilities   $       800,727
 Net Worth   $         1,825,820

 

Net Worth Update:  May 1, 2014

Assets     Liabilities
 Total Banking  $                267,413  Credit Cards   $          5,689
 Total Investments  $             1,165,817  Loans (Student)   $        50,972
 Real Estate  $             1,055,000  Mortgages   $       530,836
 Other Assets  $                  94,574  Other Liabilities   $       214,975
 Total Assets   $             2,582,804    Total Liabilities   $       802,472
 Net Worth   $         1,780,332

 

Net Worth Update:  April 1, 2014

Assets     Liabilities
 Total Banking  $                271,579  Credit Cards   $          6,642
 Total Investments  $             1,188,739  Loans (Student)   $        51,170
 Real Estate  $             1,055,000  Mortgages   $       531,577
 Other Assets  $                  36,574  Other Liabilities   $       159,775
 Total Assets   $             2,551,892    Total Liabilities   $       749,164
 Net Worth   $         1,802,728

 

Net Worth Update:  March 1, 2014

Assets     Liabilities
 Total Banking  $                308,175  Credit Cards   $          5,311
 Total Investments  $             1,167,044  Loans (Student)   $        51,372
 Real Estate  $             1,055,000  Mortgages   $       604,989
 Other Assets  $                  37,074  Other Liabilities   $       159,775
 Total Assets   $             2,567,293    Total Liabilities   $       821,447
 Net Worth   $         1,745,846

 

Net Worth Update:  February 1, 2014

Assets     Liabilities
 Total Banking  $                296,851  Credit Cards   $          6,418
 Total Investments  $             1,026,280  Loans (Student)   $        51,613
 Real Estate  $             1,055,000  Mortgages   $       605,796
 Other Assets  $                  41,074  Other Liabilities   $       159,775
 Total Assets   $             2,419,205    Total Liabilities   $       823,602
 Net Worth   $         1,595,603

 

Net Worth Update:  January 1, 2014

Assets     Liabilities
 Total Banking  $                256,861  Credit Cards   $          6,499
 Total Investments  $             1,105,129  Loans (Student)   $        51,802
 Real Estate  $             1,055,000  Mortgages   $       610,937
 Other Assets  $                  56,075  Other Liabilities   $       114,775
 Total Assets   $             2,473,065    Total Liabilities   $       784,013
 Net Worth   $         1,689,052

 

Net Worth Update:  December 1, 2013

Assets     Liabilities
 Total Banking  $                237,242  Credit Cards   $          5,599
 Total Investments  $             1,081,721  Loans (Student)   $        52,002
 Real Estate  $             1,055,000  Mortgages   $       612,967
 Other Assets  $                  58,552  Other Liabilities   $       117,775
 Total Assets   $             2,432,515    Total Liabilities   $       788,343
 Net Worth   $         1,644,172

 

Net Worth Update:  November 1, 2013

Assets     Liabilities
 Total Banking  $                237,405  Credit Cards   $        11,690
 Total Investments  $             1,036,035  Loans (Student)   $        52,211
 Real Estate  $             1,055,000  Mortgages   $       613,390
 Other Assets  $                  58,552  Other Liabilities   $       117,775
 Total Assets   $             2,386,992    Total Liabilities   $       795,066
 Net Worth   $         1,591,926

 

Net Worth Update:  October 1, 2013

Assets Liabilities
 Total Banking  $                228,528  Credit Cards   $        10,176
 Total Investments  $             1,011,333  Loans (Student)   $        52,383
 Real Estate  $             1,055,000  Mortgages   $       618,763
 Other Assets  $                  58,552  Other Liabilities   $       113,750
 Total Assets   $             2,353,413    Total Liabilities   $       795,072
 Net Worth   $         1,558,341

 

Net Worth Update:  September 1, 2013

Assets     Liabilities
 Total Banking  $                230,720  Credit Cards   $          7,159
 Total Investments  $                955,385  Loans (Student)   $        52,584
 Real Estate  $             1,055,000  Mortgages   $       632,249
 Other Assets  $                  57,737  Other Liabilities   $       109,275
 Total Assets   $             2,298,842    Total Liabilities   $       801,267
 Net Worth   $         1,497,575

 

Net Worth Update:  August 1, 2013

Assets     Liabilities
 Total Banking  $                220,561  Credit Cards   $          7,802
 Total Investments  $                974,469  Loans (Student)   $        52,785
 Real Estate  $             1,055,000  Mortgages   $       635,961
 Other Assets  $                  57,737  Other Liabilities   $       109,275
 Total Assets   $             2,307,767    Total Liabilities   $       805,823
 Net Worth   $         1,501,944

 

Net Worth Update: July 1, 2013

Assets     Liabilities
 Total Banking  $                212,820  Credit Cards   $          8,261
 Total Investments  $                924,647  Loans (Student)   $        52,989
 Real Estate  $             1,055,000  Mortgages   $       640,600
 Other Assets  $                  57,737  Other Liabilities   $       109,275
 Total Assets   $             2,250,204    Total Liabilities   $       811,125
 Net Worth   $         1,439,079

Net Worth Update:  June 1, 2013

Assets     Liabilities
Total Banking  $         200,400.00 Credit Cards  $    8,275.00
Total Investments  $         951,097.00 Loans (Student)  $  53,189.00
Real Estate  $       1,055,000.00 Mortgages  $642,999.00
Other Assets  $           57,737.00 Other Liabilities  $112,275.00
Total Assets  $       2,264,234.00   Total Liabilities  $816,738.00
Net Worth  $ 1,447,496.00      

Net Worth Update: May 1, 2013

Assets     Liabilities
Total Banking  $         202,856.00 Credit Cards  $    7,446.00
Total Investments  $         928,531.00 Loans (Student)  $  53,393.00
Real Estate  $       1,055,000.00 Mortgages  $652,766.00
Other Assets  $           58,237.00 Other Liabilities  $112,275.00
Total Assets  $       2,244,624.00   Total Liabilities  $825,880.00
Net Worth  $ 1,418,744.00

Net Worth Update: April 1, 2013

Assets     Liabilities
Total Banking  $         183,696.00 Credit Cards  $    7,751.00
Total Investments  $         897,928.00 Loans (Student)  $  53,593.00
Real Estate  $       1,055,000.00 Mortgages  $657,339.00
Other Assets  $           78,237.00 Other Liabilities  $112,275.00
Total Assets  $       2,214,861.00   Total Liabilities  $830,958.00
Net Worth  $ 1,383,903.00

 

Net Worth Update: March 1, 2013

Assets Liabilities
Total Banking  $         177,722.00 Credit Cards  $    7,209.00
Total Investments  $         837,763.00 Loans (Student)  $  53,802.00
Real Estate  $       1,055,000.00 Mortgages  $659,149.00
Other Assets  $           87,237.00 Other Liabilities  $  97,275.00
Total Assets  $       2,157,722.0   Total Liabilities  $817,435.00
Net Worth  $ 1,340,287.00

 

Net Worth Update: February 1, 2013

Assets     Liabilities
Total Banking  $         173,776.00 Credit Cards  $    2,909.00
Total Investments  $         821,953.00 Loans (Student)  $  54,001.00
Real Estate  $       1,055,000.00 Mortgages  $672,308.00
Other Assets  $           60,237.00 Other Liabilities  $  97,275.00
Total Assets  $       2,110,966.00 Total Liabilities  $826,493.00
Net Worth  $ 1,284,473.00

 

Net Worth Update: January 1, 2013

Assets     Liabilities
Total Banking  $         154,826.00 Credit Cards  $    6,540.00
Total Investments  $         760,381.00 Loans (Student)  $  54,200.00
Real Estate  $       1,055,000.00 Mortgages  $668,662.00
Other Assets  $           63,237.00 Other Liabilities  $  67,775.00
Total Assets  $       2,033,444.00 Total Liabilities  $797,177.00
Net Worth  $ 1,236,267.00

 

Net Worth Update: December 1, 2012

Assets Liabilities
Total Banking  $         158,561.00 Credit Cards  $    5,828.00
Total Investments  $         739,686.00 Loans (Student)  $  54,401.00
Real Estate  $       1,055,000.00 Mortgages  $672,018.00
Other Assets  $           64,805.00 Other Liabilities  $  67,175.00
Total Assets  $       2,018,052.00 Total Liabilities  $799,422.00
Net Worth  $ 1,218,630.00

 

Net Worth Update: November 1, 2012

Assets     Liabilities  
Total Banking  $         154,260.00   Credit Cards  $    5,912.00
Total Investments  $         728,582.00   Loans (Student)  $  54,599.00
Real Estate  $       1,055,000.00   Mortgages  $686,960.00
Other Assets  $           60,805.00   Other Liabilities  $  68,675.00
Total Assets  $       1,998,647.00   Total Liabilities  $816,146.00
Net Worth  $ 1,182,501.00      

 

Net Worth Update: October 1, 2012

Assets     Liabilities  
Total Banking  $         143,176.00   Credit Cards  $    7,430.00
Total Investments  $         738,365.00   Loans (Student)  $  54,800.00
Real Estate  $       1,055,000.00   Mortgages  $690,049.00
Other Assets  $           60,805.00   Other Liabilities  $  71,275.00
Total Assets  $       1,997,346.00   Total Liabilities  $823,554.00
Net Worth  $ 1,173,792.00      

 

Net Worth Update: September 1, 2012

Assets     Liabilities  
Total Banking  $         151,157.00   Credit Cards  $    6,424.00
Total Investments  $         720,323.00   Loans (Student)  $  54,997.00
Real Estate  $       1,055,000.00   Mortgages  $716,350.00
Other Assets  $           60,805.00   Other Liabilities  $  71,275.00
Total Assets  $       1,987,285.00   Total Liabilities  $849,046.00
Net Worth  $ 1,138,239.00      

 

Net Worth Update: August 1, 2012

Assets     Liabilities  
Total Banking  $         136,376.00   Credit Cards  $    5,639.00
Total Investments  $         701,877.00   Loans (Student)  $  55,194.00
Real Estate  $       1,055,000.00   Mortgages  $719,314.00
Other Assets  $           64,592.00   Other Liabilities  $  71,775.00
Total Assets  $       1,957,845.00   Total Liabilities  $851,922.00
Net Worth  $ 1,105,923.00      

 

Net Worth Update: July 1, 2012

Assets     Liabilities  
Total Banking  $         125,880.00   Credit Cards  $    5,992.00
Total Investments  $         696,550.00   Loans (Student, Car)  $  55,394.00
Real Estate  $       1,055,000.00   Mortgages  $723,023.00
Other Assets  $           64,592.00   Other Liabilities  $  72,275.00
Total Assets  $       1,942,022.00   Total Liabilities  $856,684.00
Net Worth  $ 1,085,338.00      

 

Net Worth Update: June 1, 2012

Assets     Liabilities  
Total Banking  $         123,327.00   Credit Cards  $    6,556.00
Total Investments  $         670,074.00   Loans (Student, Car)  $  55,590.00
Real Estate  $       1,055,000.00   Mortgages  $725,982.00
Other Assets  $           64,172.00   Other Liabilities  $  73,275.00
Total Assets  $       1,912,573.00   Total Liabilities  $861,403.00
Net Worth  $ 1,051,170.00      

 

Net Worth Update: May 2, 2012

Assets     Liabilities  
Total Banking  $         114,252.00   Credit Cards  $    4,103.00
Total Investments  $         711,831.00   Loans (Student, Car)  $  63,478.00
Real Estate  $       1,055,000.00   Mortgages  $728,152.00
Other Assets  $           65,472.00   Other Liabilities  $  77,275.00
Total Assets  $       1,946,555.00   Total Liabilities  $873,008.00
Net Worth  $ 1,073,547.00      

 

Net Worth Update: April 2, 2012

Assets     Liabilities  
Total Banking  $         157,308.00   Credit Cards  $    5,372.00
Total Investments  $         711,809.00   Loans (Student, Car)  $  64,214.00
Real Estate  $       1,055,000.00   Mortgages  $794,552.00
Other Assets  $           72,868.00   Other Liabilities  $  79,725.00
Total Assets  $       1,996,985.00   Total Liabilities  $943,863.00
Net Worth  $ 1,053,122.00      

 

Net Worth Update: March 2, 2012

Assets     Liabilities  
Total Banking  $         180,830.00   Credit Cards  $    3,548.55
Total Investments  $         646,292.00   Loans (Student, Car)  $  80,707.89
Real Estate  $       1,055,000.00   Mortgages  $796,514.00
Other Assets  $           96,368.71   Other Liabilities
 $  81,275.00
Total Assets  $       1,978,490.71   Total Liabilities  $962,045.44
Net Worth  $ 1,016,445.27      

 

Net Worth Update: February 14, 2012

Assets     Liabilities  
Total Banking  $      173,610.79   Credit Cards  $    6,852.81
Total Investments  $      632,605.29   Loans (Student, Car)  $  81,446.37
Real Estate  $   1,055,000.00   Mortgages  $798,476.18
Other Assets  $        96,368.71   Other Liabilities  $  81,275.00
Total Assets  $   1,957,584.79   Total Liabilities  $958,050.36
Net Worth  $ 989,534.43      

{ 77 comments… read them below or add one }

Noah February 14, 2012 at 8:57 pm

Is your “Total Banking” broken up into multiple checking accounts so as to be below the FDIC limit of $100K? Or is it a non-issue if you have multiple people on the account?

Also, what does “other assets” mean? Cars? Gold? Baseball cards?

Reply

iam1percent February 15, 2012 at 1:38 am

Yes, total banking is all of our cash accounts in checking and savings accounts. It is temporarily large right now because we will be using $75k next month to bring out mortgage down below the jumbo (417k) as part of a refinance.

I do have baseball cards including a Mark McGuire rookie card, but I didn’t include baseball cards. Other assets include KBB values of our cars (34k total), bonus payout due in March (25k), a pension lump sum if I were to leave my company, and reserves in my mortgage escrow account

Reply

Philly area February 14, 2012 at 9:45 pm

I also was wondering about other assets. Also, “other liabilities”. Why would you keep car loans, student loans and other liabilities if you have 173k in cash? I’m assuming your cc debt is at 0%.

Noah, the current (temporary) FDIC limit is 250k. For joint accounts held by a husband and wife, that makes 500k FDIC insured.

Reply

Noah February 14, 2012 at 9:47 pm

Thanks for the info!

Do you recall when it was changed? I remember when the collapse happened it was around 100K. (I never worried about it as I’m not there yet…haha)

Reply

Philly area February 15, 2012 at 1:14 am

The limit was raised right after Lehman Brothers collapsed in ’08. Turns out I was mistaken about the increased limit being temporary – it was permanently raised in 2010.

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iam1percent February 15, 2012 at 1:41 am

Other liabilities are my funded liabilities which include 65k in a Fidelity Charitible Gift fund, and the rest in security deposits that I have to return to my tenants. I may define these at the top of the page as people likely have questions about most of the categories…

Car loan is only 9k at 2.9%, and student loans are mostly at 2.75 and some at 3.5% so I know I could probably get more in the market. Credit card debts are paid off every month.

Reply

Philly area February 15, 2012 at 11:01 am

You’re about a dozen years younger than I am and so in that sense you can more easily bounce back, but I’d be seriously concerned about my debt level if I were you.

Student loans aren’t deductible, nor are they bankruptible in a worst case scenario. Your money in the bank is not going to be earning anywhere near 2.75%, so you may as well unload the student loans.

Houses right now are depreciating assests so I’d be very careful about including them in your net worth, particularly since they’re what’s making you hit that psychological threshold of a million. I would focus more on the psychological marker of being a million in debt and stop worrying about accumulating and start worrying about paying that debt down.

Honestly, I don’t think you should be taking on more car debt at this point. You’ve got two kids and locking yourself into more payments is not wise. God forbid, one of the kids could get sick or have special needs and you or your wife will have to take a year or two off work. Or it may be that one of them is a virtuoso violinist and will need more time and money spent to develop his talent properly. Or a pricey private school will better fit their emotional or intellectual needs.

Having grown up in first world poverty, my husband and I tend to be very conservative with our money, but I do think most financially savvy folks would say your balance sheet is a crisis or two away from disaster.

Reply

iam1percent February 15, 2012 at 12:54 pm

First of all, thank you so much for taking the time out to provide your input! It is much appreciated. I wanted to provide a little bit of color to my finances so you can get a better picture, because (believe me)…I’ve considered much of what you highlighted.

Regarding cash, we have that much in the bank now because we will be using approximately 75k to refi our primary home, we’d like to earmark 50k for a car, and the rest is considered “emergency”.

In regards to housing, yes they are a depreciating asset on a country average, but regionally tells a different story. In the Jersey/Philly area, prices have not declined as much as Miami or Vegas. Prices are pretty stable here and the current market value is what is reflected in my balance sheet. There are other parts of the country where home prices are actually rising.

I don’t plan to incur any more car debt. Any future cars would be paid with cash.

Regarding crisises, the only crisis I see highlighted in your comments is a potential health issue within the family. Other crisis could be a lawsuit at a rental property, fire, flood, etc. To cover these crises, we have a $2 million umbrella policy across all real estate and cars, really good health insurance, disability insurance, and life insurance in the millions. But to your point, this is why we also have a large cash cushion.

I think it is also important to note that we clear approximately $15k per month from our incomes after we pay all monthly expenses.

I hope this helps. I could be going about it all wrong, so I’m hoping to get more input after taking the details into consideration.

Reply

Philly area February 16, 2012 at 2:22 pm

Do you have $15k after daycare, food utilities, car insurance, etc.? If so, then you should be rid of your student and car loans in 7 months. I wouldn’t buy the new car until then.

What is your monthly net income (after taxes, retirement, health insurance and any other deductions) versus your monthly budget (everything – mortgages, utilities, food, daycare, gas, etc.). Personally, I’d run the budget two ways – how you’re living now, including eating out, housekeeping and lawncare, etc., and then how you’re willing to live during an income shortage/stoppage. Are you willing to give the rentals back to the bank in that scenario?

In any case, I don’t think 50k (if I’m calculating correctly) is enough of an e-fund for your lifestyle. Not with two kids and two income properties. For reference, two years ago, we had about 40k in unexpected bills in a 4 month period. The bills were the perfect storm of many things – medical, kid related, and major rental property repairs. Since the timing coincided with $20k of long anticipated spending, if we’d have had an income crisis at that point as well, we would’ve had to either go into debt or pay bills late. It was the wakeup call we needed to beef up our e-fund. We like having a year of normal expenditures.

Something I like to make folks aware of is out of network insurance reimbursement is typically 50% of what the insurer considers fair and equitable, not 50% of your bill. For my husband’s $10k out of network surgery, we were given a check for $750. The surgeon we went with accepted no insurance of any kind simply because he didn’t have to. My guess is going forward, insistence upon cash only from the best surgeons will become quite common.

C The Writer November 14, 2012 at 12:11 am

Can I just hug you? No, seriously.

Reply

whoa February 14, 2012 at 9:57 pm

$1,000,000 of debt? sorry, but you’re totally fucked.

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iam1percent February 15, 2012 at 1:41 am

I’m not worried. I am 1%.

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Nick February 20, 2012 at 9:15 pm

Haha! Watch out or you’ll get occupied! Great job on the NW and looking forward to seeing you cross the million-dollar level – next month?
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Reply

iam1percent February 21, 2012 at 12:41 am

I think we’ll be there come March 1st when I post an update on my NW. Its already up to 995k, and my wife and I get paid at the end of the month, though our mortgages and other expenses are due at the end of the month as well.

Reply

Financial Samurai April 4, 2012 at 1:35 pm

Such a great response!
Financial Samurai recently posted..Corporate Greed By PG&E Killed My Friend’s Family And My Credit ScoreMy Profile

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Noah February 15, 2012 at 3:20 pm

How much of your income is your wife’s? If she were to be laid off and wanted to stay home if you had a 3rd child, would you still be able to stay above water?

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iam1percent February 15, 2012 at 3:27 pm

Currently, we don’t use her income. We live off of mine. However, to your point, things would be a bit tight so we would have to make a few adjustments in spending. This is why the 8 month emergency is in place. To give us a cushion as she finds a new job.

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Poor Student February 15, 2012 at 8:54 pm

I would also be concerned about that debt like the other comments above this, but to each his own. You at least have it figured out and are able to keep it under control. Mostly I guess I am jealous

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Financial Samurai February 17, 2012 at 6:52 am

Thanks for sharing mate.

What is the definition of 1% exactly? It’s my understanding that when people talk about the 1%, they talk about income that’s around $380,000/year+. What’s the 1% level for net worth?

I like the $1.05 million in indebtedness if it can be all primary and vacation home if you’ve got the income and assets to support it. Tax shields up to the max are nice.

S

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iam1percent February 17, 2012 at 12:57 pm

Yes, the 1% I refer to is in terms of income. I’m not sure I’ve seen a statistic of the top 1% in terms of net worth.

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Financial Samurai February 17, 2012 at 7:09 am

Does the top 1% for income of ~$350,000 mean per person, or per household? I always thought it was per person, but now I’m not sure based on your definition, and it seems by tax return, which could be a married joint return. thx

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iam1percent February 17, 2012 at 12:56 pm

I’ve seen it defined both ways. I’m using household income in my case.

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Financial Samurai February 17, 2012 at 2:46 pm

Gotcha. Best to register weare1percent.com then too!

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Mochi & Macarons June 21, 2012 at 3:37 pm

Never mind, you just answered my other comment’s question :)
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Jason B February 17, 2012 at 3:13 pm

I think looking at debt alone and saying “That’s a big number and it is bad” is really short-sighted. Would any of the naysayers like to compare the overall Net Worth number to their own? My “net worth” is -$136k before considering my home and car values… approximately $64k after. So, I have way less debt. So… I’m way better off :)

Net Worth, of course, and also monthly cash flow. Lots of debt can mean lots of negative cash flow because of interest costs, and if the debt was on depreciating assets (like all cars, no home) then you’d also see a negative shift in net worth over time.

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Suzanne February 18, 2012 at 4:22 pm

If the interest on the student loan isn’t deductible (and I bet it isn’t) – just kill it before you buy the car. Not sure how much car you are buying – but it would only take a few months to save up money & I bet you could get 0% – or less than 2% – so cheaper than student debt (and then kill it quickly.

You have great cash flow, but I would kill a bit more debt. My numbers aren’t as big as yours (we’re the 4%) – but I would focus on the following:

-max out all tax advantaged vehicles possible – 401(k), kid’s college funds (529?), maybe a HSA – but certainly a FSA every year.

- kill all nondeductible debt – school loans, cars

- make sure you can live off one salary – the lowest

-save/invest the rest

-explores LLP/LLC/other to hold real estate – both to shield personal assets in case of litigation and tax benefits

-increase umbrella insurance – I have way less and carry $1M umbrella – you might look at $3M or so – although depends on how you end up carrying the real estate

overall great job (my back story is very similar to yours btw) – you just have a little unnecessary drag on your economic boat!

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iam1percent February 19, 2012 at 2:26 am

Suzanne, thanks for taking the time to provide your thoughts. I’m seriously considering paying off the student loans. My only hesitation was that the market has been doing much better than my student loan interest rate. IN other words, if I had paid off my loans, I would’ve missed out on major market gains.

All tax advantages vehicles are maxed…401k, 529, and FSA

My wife’s and my salary are about equal…we’re currently living off mine

We’ve explored the LLC for the real estate, but it doesn’t shield your personal assets as people think it does. We have a pretty good umbrella, but I may take your advice and get $3M.

I’d love to hear a little about your story too!!

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Nick February 20, 2012 at 9:19 pm

I’m not a 1percenter (and also not as open w/ my numbers at SAFTM) but I’ve made the same decision on student loans, keeping the cash around. For us, we’re looking to buy a primary residence (we each own rental property but rent where we live). So I like putting that $$ towards a mortgage (interest rate after tax is a wash or still a bit higher for a mortgage and the student loans disappear if I die, but the mortgage doesn’t). I’m not very risky with everything else, so bankruptcy is a risk, but one we’re taking for now.
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MiddleClassAtHeart October 13, 2012 at 7:06 pm

Browsing your website, I had a few question:
1) Do you & your wife have numbers in mind for target net worth/passive income stream before you both quit your jobs?
2) Do you use an agency to manage your 2 rental properties? Are the rentals cash flow positive?
3) Do you or wife feel any guilt for not being able to be a more constant presence with your children? Also, are you planning for private school?
4) Could you and your wife ever adopt a lower class lifestyle? or, are you locked into living life at a certain standard at any cost?

IMHO, your net worth profile looks a bit aggressive (home + 2 rental properties, lots tied up in stock market), but, so long as you don’t get unexpectedly downsized or your wife loses her license to practice, your household income is high and you are both relatively young (mid 30′s?). Yes, unexpected health related problems can happen, but, it sounds like you both have health insurance & long term disability insurance to keep money flowing in regardless. If the stock market ever takes a total cliff dive and drags the housing market along with, you could wait it out for decades given your age. Of course there is the ugly topic of divorce… it seems to be a pretty common thing in our culture, but, it doesn’t happen to all married couples.

So, overall, I think if you are totally comfortable with your profile and not losing any sleep over it, then that’s the way you should play your game.

I would play it somewhat differently, but, that’s a different story.

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iam1percent October 13, 2012 at 9:36 pm

To answer your questions:
1) No, we don’t have a number in mind. The wife loves her job and is not looking forward to the day sher retires and I like my job. We’ll work for a while.
2) No agency, I manage myself. It is cash flow positive
3) My wife works 2 days a week and they are evening shifts so she spends all day with the kids. The other 5 days, she’s home. I work 2 days a week from home and don’t work any weekends. So, we have no concerns about being a presence at home.
4) We will likely not adopt a lower class lifestyle, but we are certainly living below are means currently.

I’m not sure what you’re suggesting outside of stuffing money in a mattress. The rental properties will provide a good income stream in the future, we have a large amount in cash (see net worth), and the rest in investments.

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A February 20, 2012 at 7:28 am

This is interesting. When I read your posts on “Get Rich Slowly” I thought you were much wealthier than I, but my net worth is about $500K more. I don’t consider myself a one percenter though; just an above-average earner, frugal spender, and reasonably smart (and lucky) investor who has a good nest egg but doesn’t yet feel financially independent, which is what I’d consider true wealth.

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iam1percent February 20, 2012 at 7:43 am

1% refers to our income…not net worth. Do you earn more than 343k annually? Secondly, net worth doesn’t say much unless you state your age.

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Tony February 27, 2012 at 8:13 pm

Only 1% of the US Population (Aprox. 300,000) have a net worth of $1,000,000 or more. However your house valuations should be carefully analyzed bucause the true value of a house is what you sold it for, not what you want to get for it. You should probably run a probabilistic analysis en Excel (using Crystall Ball) to obtain a true Expected Value of your properties or at least assign an uncertainty range to the value of you real estate.

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Jonathan February 27, 2012 at 8:23 pm

Tony, what for? For the purposes of tracking net worth, as long as one isn’t assuming some flat appreciation rate without any regard to actual market conditions, a reasonable estimate of the current property value is totally appropriate. You don’t track net worth like a stock certificate or an account balance…It’s understood that you can’t walk into a bank tomorrow and “cash in” your net worth. It’s not necessary to know it down to the last dollar and with expected margins of error. It’s an approximation to provide a big-picture view of how you’re doing. Being off by a few thousand dollars is basically irrelevant (especially when you’re in the range of iam1percent, and growing your NW at a healthy rate).

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iam1percent February 28, 2012 at 3:12 pm

Jonathan..I agree wholeheartedly. Thanks for your input.

Lars T. (Primal Minimalist) February 25, 2012 at 12:35 am

So glad I discovered this blog. From now I will be tracking my Net Worth on a monthly basis and analyzing the growth.
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iam1percent February 25, 2012 at 1:54 pm

Thanks for visiting and I appreciate the kind words!

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Simple Spreadsheet February 27, 2012 at 6:22 pm

Thanks for sharing this info!

Just thought I would share a simple spreadsheet people can use to calculate their own net worth. It’s not setup for those who want to calculate it daily, but it does allow for a trend to be viewed graphically.

http://www.spreadsheetshoppe.com/personal-balance-sheet.html

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Daisy March 2, 2012 at 5:58 am

It’s so interesting seeing the other side of the coin; many of our PF blogging peers are struggling with lower net worths, or even negative (like me!)
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White Coat Investor April 4, 2012 at 4:36 am

I’m not sure a million in net worth gets you into the 1%, does it? Do you qualify by virtue of your income?

I did a post a while back and discovered most docs don’t actually get into the 1%. Top 5% for most, but not 1%.

Anyway, just found the blog and enjoying it immensely.
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iam1percent April 4, 2012 at 12:32 pm

Yes, I am referring to the 1% of income earners, not net worth.

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Josh @ Live Well Simply May 22, 2012 at 10:32 pm

Fascinating discussion. Personally I’d rather be part of the 99% then have your debt load, but each person has their financial ‘comfort zone’ I’ve found.
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iam1percent May 22, 2012 at 10:38 pm

Just so I’m clear, you’d rather not have a net worth of over ~$1 million?

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Swoozie August 26, 2012 at 11:59 am

Not quite getting your thinking, here, 1am1percent. To feel so comfortable with so much debt? We have got $5 million stashed and ZERO debt. But there’s NO WAY IN HELL we’d go out and pay $50K for a car. Sheer stupidity. A car is the BIGGEST waste of money. You buy a dependable $23K car, maintain it, and drive it 10-15 years. You don’t buy a car to “show off” your success. To me, that’s just arrogance. And spending $50K on a car is telling me you aren’t as smart about money as you may think you are (mainly because you can’t afford it). And you are definitely not in as good of shape as you are trying to convince yourself you are. I would get your HUGE amount of debt paid off – you have no idea what the future holds and that could sink you……FAST! When you have ZERO debt, THEN you can start to get just a LITTLE comfortable.

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iam1percent August 27, 2012 at 9:15 am

I’ve mentioned before that I’m very comfortable with this debt. Its all mortgage debt (everything else are funded liabilities). I think it all depends on your age, career, and income. We are young, have high-demand careers, and a $50k car would be about 1.5 months of income. It like saying that a family earning $120,000 a year is stupid to spend $18k on a car.

What’s even more stupid is to have $5 million in the bank and not spend some money on something you want. You plan on being buried with your $5 million?

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Andrew August 29, 2012 at 8:00 am

$6 Million Gets You Into 1% at 40, but Not at 60 – Yahoo! Finance
http://finance.yahoo.com/news/6-million-gets-1-40-154917921.html

“The price of being a One Percenter might seem like a simple number. For income, it’s around $380,000 a year. For wealth, it’s a total net worth of
- $8.4 million.
There are also big differences in wealth cut-offs depending on age.
- For people in their 40s, it takes a total net worth of $5.8 million to get into the one percent.
- For people in their 50s, it takes nearly $10 million. For people in their 60s, it takes around $11.6 million.

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Travis November 2, 2012 at 12:36 am

I am a little surprised how many previous commenters don’t understand leverage. I think they just see a huge number and think “wow, I couldn’t handle that much debt!”

Perhaps an article showing the breakdown between your primary residence and your two rentals will show people that having so much mortgage debt isn’t such a bad thing. When they can see that debt is actually giving you a solid return on your original down payment, and your renters are paying down those mortgages for you, it might show them the power of leverage (“good debt”).

Also, you mentioned in a previous article that you refinanced your primary residence to 3.125%. What are the rates on your rental properties? I did a quick search on your site and couldn’t find any mention about those rates.

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iam1percent November 2, 2012 at 8:43 am

Thanks for seeing my balance sheet the same way I do! I don’t think I ever disclosed the rate on the rentals, but one is at 5.25% and the other is at 4.625%

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Travis November 2, 2012 at 1:44 pm

Certainly. As William Nickerson wrote, “The path to riches is paved with borrowed money.”

I’m curious how your mortgage debt plays out between your primary residence and your rentals. Do you have enough equity built up in your primary residence that you could do a cash-out refi and pay off one (or both) of your rentals? I know you already refinanced your primary residence twice, but if you have the equity available, that would probably be the way to get the lowest rate possible for your rentals.

If not, those rates are still really high compared to what you can get through a refi right now, even with the premium they charge for investment properties. (Did I just say 4.625% was “really high”?! If only we had known 10 years ago what rates were going to be like today!)

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Rambler January 3, 2013 at 1:56 am

This $8.4 million statistic is misleading. A New york Times piece mentioning the same statistic disclosed that it was based on 2007 data from the Federal Reserve. Median net worth has decreased big time since then…

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john lee November 14, 2012 at 9:30 am
Jon April 7, 2013 at 9:11 am

How about an update of real estate values? It’s your number one asset and it has undoubtedly changed. Some markets are up substantially over the past year. Yours?

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iam1percent April 8, 2013 at 9:21 pm

I’ve kept it flat as its hard to determine an accurate real estate value. Zestimates are not accurate and with so many variances with upgrades in local comps, I have decided not to update this number until I realize (sell) the properties.

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Dillon May 17, 2013 at 4:26 pm

I noticed that your liabilities have increased $28,703 since January 1st, 2013, but your net worth has increased $182,477. That is really interesting to me. It is hard to write exactly what is so interesting to me about that but it brings up a these issues that I have hard time with: debt is ok and debt can create wealth. I am really anti-debt because it feels like a noose around my neck, but potentially it could help me make even more money.

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iam1percent May 19, 2013 at 6:51 pm

Well, yes and no. My liabilities have gone up on paper, but that is only because I received a lump sum in stock options from my employer that I usually earmark for my church/charity. So its reflected as an asset and a liability on my balance sheet. All other liabilities (mortgage) are trending down. Hope that makes sense.

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Giz June 9, 2013 at 6:58 pm

Your net worth is a good start. Mortgage leverage is fine as long as you have a job in a career that has strong long term prospects. Regarding 1%, income is misleading…the key is to be able to stop work tomorrow at any age and live off of your investment income. The 1% net worth is defined from as low as $2.5MM to $8.5MM. The reality is it depends on age, contingent liabilities (age of children), and where you live. I would say of you are 50, children are independent (college educated and good jobs), live in the Southeast/Southwest, and have a $5MM portfolio producing $350,000 of income with no debt puts you in the 1%. Every situation has to be evaluated separately.

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Sam Figgs August 11, 2013 at 10:15 am

Very good blog. Check out another perspective from JT Foxx, one of the world’s top business strategist and wealth coach. He has a difference spin on why the Top 1% should not reveal their income

http://www.jtfoxxblog.com/jt-foxx-net-worth-finally-revealed/

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RichUncle EL September 27, 2013 at 1:08 pm

Great Net Worth! I agree with some of the commenters to get rid of the debt before investing on any other investments. I have realized a bigger jump in net worth and cash flow when not in debt. I would rather save money paying down my student loans than keeping it in an emergency fund. (Interest payments will be saved) IF no emergencies have occurred in the last year, the probability of it happening in the short term is low. 15K surplus can do a lot and debt is a weight nobody should have.
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iam1percent September 27, 2013 at 1:51 pm

But what people don’t realize is that the student loan debt and mortgage debt are at extremely low rates. Had I paid off that debt instead of investing it in the market, I would’ve lost out on all the gains over the past 4 years.

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junior November 5, 2013 at 9:22 pm

With your total net worth….why would you carry credit card debt and student loan debt? Is there a reason you would?

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iam1percent November 6, 2013 at 8:16 am

We have about 5 different credit cards and pay them off each month. Each has a different close date each month and we put a lot on the card so it seems like we carry a balance, but we don’t. I recently charged about $5k for our trip to Disney.

With regards to student loans, the loan is for my wife’s medical education. The interest rate on the loan is about 2.75% and is a tax deductible expense as part of her S-corp to run her business. We obviously have the money to pay it, but we get much better returns by investing the money.

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Making Money November 27, 2013 at 10:45 am

Holy crap – you really are the 1% – awesome performance!!
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support.hookit.com December 13, 2013 at 3:23 am

Thankfulness to my father who stated to me regarding this blog,
this weblog is actually awesome.
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Derek Olsen February 11, 2014 at 3:27 pm

Very cool. Thanks for taking the time to post all of this.

My wife and I just started posting our numbers.
It’s good to see others posting numbers too.

-Derek
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Richard March 20, 2014 at 11:21 pm

What is the minimum net worth,2014,US,to be in the top 1 Percent?I’m wondering if I’m there?I would appreciate knowing,if You have access.Thank You,RK

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iam1percent April 7, 2014 at 8:57 am

Latest reliable data from IRS is from 2011. DIfficult to tell what is required in 2014 until 2014 is complete.

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Ken April 1, 2014 at 1:39 pm

Very interesting blog! I think a great deal about wealth as well, and recently stumbled upon a different definition than those traditionally used in the US — Income and Net Worth. It has to do with measuring the ratio between your expenses and your passive income.

The thinking is that, if your passive (investment) income equals or surpasses your needs, then you’re wealthy. Your time is your own, you work only because you choose to, at whatever you choose to do.

So now, in addition to tracking my family’s Net Worth, I look at everything with regard to how it impacts our Passive-Income-to-Expense Ratio. Am I taking on a new monthly fee (like a subscription)? Am I reducing an ongoing or a one-time expense? Are my investments earning all they can? Do I have lazy cash?

I find this measure much more useful — as it approaches 100% I feel more free and in control. Of course, you still need to manage your portfolio, but that becomes part of the fun.

That is

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A Frugal Family's Journey June 10, 2014 at 12:25 am

Very well done…looking at your progress, you have grown roughly $800K (or 80%) in 2 years! That is impressive. With the exception of rentals, which we hope to add to our investment portfolio one day, we aren’t doing that bad ourselves. Keep up the great work, you are an inspiration to families like ours who are striving to be in the 1 percent one day. Best Wishes! AFFJ
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J @ the expat investor July 1, 2014 at 7:10 pm

Hey just stumble on your blog seem like you’re doing great on your net worth. I hope to get there one day. Hope to hear more from your progress and keep up the good work.
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iam1percent July 2, 2014 at 8:27 am

thanks! make sure you subscribe to get any updates!

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Thad July 16, 2014 at 10:30 pm

After reading these comments, its pretty clear why most don’t achieve the level of success you have. Instead of listening to your story, they try to educate you on what you should be doing… :) pretty bizarre – but that is the truth and reality of the world!

Good job. I appreciate the info you post here, and will continue to read and study.

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skipper July 24, 2014 at 10:06 pm

my net worth is ironically so close to yours and has gone up approximately the same in the couple of years. I noticed that you haven’t adjusted your real estate net worth. I have several rentals and other properties and in the last couple of years they have gone up over 6% each year. I’ve even sold two of them this year to reduce my liabilities to under a million to 900K. I think it would be more accurate if you adjusted your real estate.

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iam1percent February 16, 2012 at 2:43 pm

We live on about 50% of our income. In addition to the 50k that we would have in a e-fund, we do have 100k in a very conservative investment account that will not fluctuate much either way. If we are in a pinch, I’d just pull it. But in the meantime, we are building a cash reserve from our income.

You do have me thinking about paying off the student loans and cars however, and waiting on the car. Will have to strongly consider this after doing the math.

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Jonathan February 16, 2012 at 5:11 pm

Allow me to speak in support of your balance sheet. You’ve got lots of assets and strong cash flow, as well as a strong cash cushion. You both have good jobs and good prospects for replacing the jobs should the need arise. You have over $600k in other investments, some of which could surely be liquidated, drawn from, borrowed against, or sold at a discount should a serious problem occur. You have lots of insurance which could pay off your debts should you become disabled or die. While $1m in debt is nothing to ignore, you have a clear direction and lots of backup options should the unexpected (and in my opinion, generally unlikely) happen. If you’re comfortable with your level of debt as it compares to your assets and cash flow, stay the course!

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iam1percent February 16, 2012 at 6:42 pm

Jonathan, thank you for your comment. You obviously see my balance sheet the same way I do. When I look at it I’m not worried, however, I did begin to question my approach based on some of the comments. Thanks for grounding me.

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Jonathan February 16, 2012 at 6:49 pm

Haha, no problem, but I feel like I did the opposite of “grounding you” – I argued for the more risky approach. My basic feeling is, you are in a solid AND safe financial position despite your level of debt. Lots of people may (d0) disagree and it’s up to you to decide the best way to handle your own finances.

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iam1percent February 16, 2012 at 7:12 pm

I may not have stated my position clearly. I know you agreed for the risky approach and appreciate you seeing things the way I see them!

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