300k net worth at 32 - good?

Having a new car that is paid off compared to a three year old car with four years of payments left means you are in a better position to add future cash flow to savings or debt reduction.

So it can be useful to consider the net value of your car in thinking about your overall net worth and how you would build it.

It's not that bad. Some people have a lot less at that age so you shouldn't be too discouraged. I've recently been working a lot on my portfolio and there are a lot of things I am gaining besides experience. I am currently looking for a good way to figure out how much my personal net is worth. I recently found a good online calculator that helped me get a rough estimate of my finances but I am also going to hire an accountant to check the state and a potential broker to keep my stocks in check. You can calculate your net worth here: https://www.juststartinvesting.com/how-to-calculate-net-worth/

Free_the_thigh wrote:

truth hertz wrote:

Let's see.

To the OP: You're 32. If you didn't graduate university with student debt, then probably you have forgotten to mention some help from mommy and daddy, but let's just pretend you had a full-ride scholarship and were not in the red at 22.

300k / 10 years is 30k per year. What have you been doing for work that left you with 20-30k to spare every year since 22?

1. It would be less than 30k a year given the market returns

2. The portion that is being saved would likely be mostly tax free

3. Having 300k net worth by 32 isn’t something hard to believe. Lots of people make 100k or more and aren’t idiots with their money

Yeah. 10k you invested in index fund a decade ago is more than 30k today. OP's generation has been really lucky. I also bet that he gets general matching contribution from his employer.

Clearly having an asset that offsets expenses increases cashflow and is important to understand. That said, most American's aren't that economically efficient and tend to blow extra cash flow on stupid stuff. For practical reasons this is why I think it is really better to measure liquid, invested (or investable) assets + appreciating assets like real estate. It gives you a more honest appraisal of how well you are truly set-up for retirement. If anything, I would simply model increased cashflow into our year projections rather than including an asset like a car into my current NW estimate.

Make sense?

net worth should not include any depreciating asset such as a car, etc. But most likely, you have debt on that new(er) car so there is not much equity in there regardless.

few posters trying to get to $1mm and "retire" - the only way it *might* work if that $1mm is in marketable securities / cash. You can't count your home equity, 401k, etc.

Also (my opinion), adding in 401k to your net worth is somewhat bogus - we can all agree that money is locked up for a long time (sure you can take it out with some penalties, but best to exclude it).

highhoppingworm wrote:

Clearly having an asset that offsets expenses increases cashflow and is important to understand. That said, most American's aren't that economically efficient and tend to blow extra cash flow on stupid stuff. For practical reasons this is why I think it is really better to measure liquid, invested (or investable) assets + appreciating assets like real estate. It gives you a more honest appraisal of how well you are truly set-up for retirement. If anything, I would simply model increased cashflow into our year projections rather than including an asset like a car into my current NW estimate.

Make sense?

What "most Americans" do with extra cash flow is entirely irrelevant in planning my retirement, or anything else I plan to do with my money.

Make sense?

I've posted this before but here you go:

36 year old, married, 2 kids under 4

Home Value: $500k

Mortgage: $215k @ 3.5% - refied 30 year mortgage in 2016

2 Japanese non luxury cross overs. Both bought used 3 years old, 36k miles : 2013 paid off, 2014 with 2 years to go @ 2.125% ~$9k owed

401K between spouse and I: ~$670k

Taxable: ~$132k in Stocks/Funds/Options

Cash: $30k (would be invested but potentially will be buying a house. Closing costs/Expenses with that)

No student loans or other debt.

Day Costs Per Month: $1,200 (2 days a week)

Allocations:

401k:

Fidelity Contra Fund: 15%

Fidelity Nasdaq Index: 10%

Fidelity Low Price Stock: 10%

DoubleLine Shiller Enhanced CAPE: 10%

Fidelitiy Small Cap Growth: 10%

Fideilty GrowthCo Fund: 10%

SP500 Fund: 10%

Fidleity Overseas: 10%

Fidelitiy Emerging Equity: 10%

Fidelity High Yield Fund: 5%

Taxable:

Individual Stocks/Options: 30% (FB/SQ/SPY Options strategy)

Fidelity ContraFund: 24%

Fidelity Small Cap Index: 16%

SP500 Fund: 15%

DoubleLine Shiller Enhanced CAPE: 10%

Wasatch MicroCap Fund: 5%

Did you mean to respond to my post? I literally just said that while the definition of NW does include all assets, including depreciating assets typically doesn't make sense from a practical standpoint. Instead, if a depreciating asset offsets other expenses (such as not having a car loan), just factor in the increased cash flow when projecting/planning for out months/years.

Not including 401ks and home equity in your retirement planning is garbage. It is all dependent on context. If your plan is to liquidate you primary home and down-size or rent in retirement it should absolutely be considered when thinking about the investable assets you will have at your disposal. Not factoring in 401k balances is also hog-wash insofar as you have enough non-401k assets to get you over the hump to penalty free 401k withdrawals.

I am not particularly confrontational on message boards but your post is just garbage, literally garbage. All that matters at the end of the day is that you have a plan to access capital in retirement that is commensurate with your current and projected future expenses and that you are willing to accept the associated risk of whatever withdrawal rate you have arrived at. For me, that is 3% of invested assets for a 40+ year retirement, for others it might be 2 or 4.

Not sure why you are getting defensive. If you want to include your car in your net worth calculation that is clearly your prerogative. That said, if a low-value depreciating asset materially impacts your financial picture/retirement planning there are probably bigger issues that need to be addressed.

highhoppingworm wrote:

Not sure why you are getting defensive. If you want to include your car in your net worth calculation that is clearly your prerogative. That said, if a low-value depreciating asset materially impacts your financial picture/retirement planning there are probably bigger issues that need to be addressed.

I am not defensive. You are. The value of my car does not impact my financial picture at all, except that it's fully paid, and it has only 24k miles so far. I have enough in my 401k and IRA to retire comfortably at the time I want to retire.

What "most people" do matters only when you start comparing yourself to other people. I have enough for my own needs, and I couldn't care less if I am doing better or worse than other people.

This isn't about comparing your financial situation to anyone else. I am simply stating why, for most people, it is impractical to include a car in a NW calculation. I am not prescribing what you should or should not be doing. Hope that clears it up.

Glad to hear about your financial success!

Meh. I’m 31 with a net worth of -$300k. No worries or stress though.

big winning wrote:

Meh. I’m 31 with a net worth of -$300k. No worries or stress though.

And you are probably happier than the OP.

lakersgirl wrote:

It's not that bad. Some people have a lot less at that age so you shouldn't be too discouraged. I've recently been working a lot on my portfolio and there are a lot of things I am gaining besides experience. I am currently looking for a good way to figure out how much my personal net is worth. I recently found a good online calculator that helped me get a rough estimate of my finances but I am also going to hire an accountant to check the state and a potential broker to keep my stocks in check. You can calculate your net worth here:

https://www.juststartinvesting.com/how-to-calculate-net-worth/

Hey! Good article, thank you!

Silly not to consider assets that depreciate. If one guy has 2 cars valued at $75k each paid off, there is some vale there. If he also owns a boat worth 1m, there is value there. What if he just bought $50k in furniture also? Nah, I guess he is no better off than his neighbor who has 2 car payments and no boat and crappy furniture.

Not my usual HN wrote:

Yeah. 10k you invested in index fund a decade ago is more than 30k today. OP's generation has been really lucky. I also bet that he gets general matching contribution from his employer.

our generation gets a match, you idiots got a pension.

wanna trade?

Financial guru wrote:

Silly not to consider assets that depreciate. If one guy has 2 cars valued at $75k each paid off, there is some vale there. If he also owns a boat worth 1m, there is value there. What if he just bought $50k in furniture also? Nah, I guess he is no better off than his neighbor who has 2 car payments and no boat and crappy furniture.

cars can be a great investment.

if you bought an old porsche for 30k a few yrs ago, its likely worth 50k now.

counter to that, if you bought a new loaded accord for 30k a few yrs ago, its depreciated a ton.

not everything is created equal....

24 years old

~100k in real estate (small properties) (great tool for real estate HONELY)

12k crypto

50k stock market

75k into start-up

Im working to getting to 500k at 27 and hope i can do it with the momentum I have now. (I lost 40k and crypto and hope to make it back)

100k is going to 80.

12k is prolly at 0 already.

50k is going to 30k.

75k is prolly going to zero soonish (assuming tech start-up)

That is 110k, not 500k anytime soon. Sorry bub.