THE COST OF HAVING NET WORTH
Your personal net worth may be more important to other people than it is to yourself depending on who you are.
In the CBB house we have tracked our net worth for a couple of years now and it’s more of an indication of our financial health.
It helps us to answer questions that we have regarding the way we save and spend our money.
Are we improving our personal wealth using the tools and knowledge that we have or do we need to follow a different path? This is what runs through our minds when we pull the data every month to share it with all of you.
So far, we’re happy about how far we’ve come although growing our savings and retirement fund will require dedication to our budgeting system and how we apply it to daily living.
Personal Net Worth Fuels the Fire
If your passion is personal finance knowing your numbers is critical to your success. Without knowing what your personal net worth is it’s hard to make financial decisions that may increase that number.
You have to spend money or invest money to “make money” and in order to do that you need to know how much you’ve got in the bank to do this.
Apart from understanding our own net worth there is a part of us that want to know how others are doing with their money, especially very successful people.
I’m betting there are lots of people out there that don’t even know their own net worth.
People who have lots of debt tend to focus more on that debt number rather than what they don’t have in the bank or investments.
Debt really is a financial mood killer for some people and for others they simply don’t care about net worth as long as debt is paid and the bank account is growing. I’m not talking about investment debt either, I’m talking consumer debt.
Every month when I sit to write this post I ask myself who on earth will care about our personal net worth? This post may not be the most popular post on CBB BUT I do get lots of fans who visit just to see our personal net worth numbers.
We’re far from any type of celebrity status and never will be but we are a Canadian family who shares what most people won’t, their financial numbers.
In one sense it gives our readers reassurance that our budgeting system does work for us and we do understand what it takes to pay off debt while saving for the future. On the other they may simply want to see numbers.
That makes sense though because I certainly wouldn’t want to follow someone who is talking about a system that should work but they are failing at it terribly. We are not perfect, but learning from past mistakes is usually how humans acquire knowledge.
People want to know what they don’t know or can’t see. It’s human nature and why so many people are rich today because others want to know their financial and personal secrets. The best part is that people WILL pay for them because they think their system will make them rich too.
It may, It may not.
Celebrity Personal Net Worth
Then there are the people who go crazy just to know what celebrities and rock stars have the highest personal net worth. I’m not sure if it’s about jealousy or people simply want to know what it costs to live a lavish lifestyle.
The average person will NEVER live that or even experience it unless they win the lottery. I’m talking about the mansions, sports cars, vacations and no money worries, EVER. Some people could care less about this life but they aren’t the people I’m talking about here today.
Personal net worth will only increase because of hard work and investment returns. Unless you get a massive inheritance or that lottery win you will have to work for your money until your money will work for you.
That’s right, hire your money in a permanent role of earning you more money. That is when the true riches of personal net worth shine through. Until then, it’s just a number.
Did you know that Kim Kardashian has a personal net worth of $85 million dollars? Who cares right? Some people do, in fact LOTS of people do. You knew Kim was rich just because she is in the media spotlight but that’s not only why. She’s rich because we made her rich and continue to make her rich along with many others in celebrity land.
Reality TV is what put Kim on the map for the most part and that’s because people crave for just a moment to see what life is like over the golden fence.
This is why the franchise reality television show “Cribs” did so well because we get that small glimpse behind closed doors. It’s as if your body is being transported to that exact moment and you experience that life of luxury even though you are likely sitting on your couch with a bowl of popcorn.
You’d have more luck budgeting to live a debt free lifestyle but you never know where life will take you… just look at Justin Bieber.
The fact stands that people want to know what others have even if they won’t admit it. People want to know the secret to success and how to make fast money. No one wants to live their life with debt that they can’t pay back or that will take them until they die to get rid of.
How much was Kim’s wedding hair and make-up? $150,000.
How much did he pay for that sports car? $350,000.
Jaws may drop but this is the stuff that keeps on making celebrities rich but if it’s someone of non-celebrity status it’s still juicy data that some people crave, even if they won’t admit it.
If it’s something that is typically a hidden gem people will want to hear about it or see it. Talking about money is taboo for lots and lots of people.
We are a comparison type society and that will never change. This is what fuels motivation and competition and the dark side of depression and loss of worth. If you can’t get or have something you will want it even more if you can find a way to get it.
Do you remember when I wrote that post about open houses and nosey neighbours? This is exactly why because they want to see what they are missing or compare their life to that of the neighbour who is moving.
Why else would you want to visit a house you have no intention of buying? Likely the entire time you walk through the house you are comparing and criticizing but this might push you to do better at whatever it is that you do.
Not every celebrity has millions of dollars in personal net worth either. Some act like they are rich when in-fact they are broke and paying off debt.
Don’t be surprised, it happens.
In conclusion I’ve come to realize that people love to know how much money other people have and I’m not shy to admit I like to know too. We just don’t pretend to live like the rich and famous when we don’t have the money to do so.
Fuel your fire and watch it grow whichever way works for you so long as you get rid of your debt first. It’s your choices that determine where you will take your finances not the number in someone else’s bank account.
Why do you think people are intrigued about the personal net worth of others?
Our net worth 2015
RESP Contribution 2015: $208.33 a month.
Where the money went:
The cash/income was our biggest increase this month, investments stayed fairly flat and there was even a dip in the exchange rate for the rest of cash left in the UK.
The markets are still up and down, but investments are supposed to be left to grow over the long-term.
There was no large expenses that ate into any cash income but spring is here and the weather has improved which means it’s time to spend money. I have multiple projects that either need finishing off or completing from start to finish.
With all these jobs that need to get done, I have decided it would make more sense to bring in contractors for certain jobs. Although I can do most of the jobs by myself having two jobs doesn’t leave me with a lot of spare time.
Before things start falling apart around our ears, it’s time to hire some help.
Another good piece of news for us is that a house on our street just went up for sale for more than we thought. I will be interested to see how much the property sells for but this will have no bearing on our property value.
I still believe we are in for a house price correction sooner rather than later so I will keep the property value as is.
How was your financial month?
Understanding net worth
What Does Individual Net Worth Mean?
Net Worth is a snap shot of your financial health sort of like a picture or debt to net assets. In simple terms it’s a total of the value of your assets minus your liabilities.
We credit the growth of our net worth due to patience, perseverance, using a monthly budget and not giving up. Your numbers may go up and down but don’t let the numbers scare you rather understand why and move on.
If you would like to use our budget I offer a FREE downloadable budget which I created and that you can use at home just like we do. I don’t charge for it because I want you to save money not spend more!
There are tonnes of other free printable lists offered at Canadian Budget Binder to help you achieve some of those financial goals and build your net worth.
Now… what you need to do is determine just how much net worth you actually have and go from there….
Determining net worth
Figuring out net worth is fairly easy as long as you know your personal numbers or monthly finances which means you need to do your homework. Net Worth is simply adding up all your assets (what you own) then taking away your liabilities (what you owe) which will give you a net worth number.
Understanding your net worth will help you determine if you are on track to meeting or beating your personal financial goals. It doesn’t get any easier than that.
Calculate net worth
Do you know how to calculate your own Net Worth?
Now you can stop asking yourself the question, how do you find out your net worth? Why? It’s easy to determine. We like to calculate our net worth every month so we know if we are still on track. Some people calculate it yearly or quarterly. It’s really up to you and how informed you want to stay when it comes to your financial health.
Net Worth is essentially an estimate and not everyone uses the same type of figures. Some people don’t include vehicles like we do or they may leave out the assets inside the home like we have. It depends on what you want to calculate or what you can sell today and make money on.
Why not go ahead and calculate your own using our Free Money saving Tool Net worth Calculator (Canadian Budget Binder 2012)
Why you should set goals
Setting goals are the only way we work towards achieving what we want to get done as a couple around the house and in our financial life. I know that without them we would be flying by the seat of our pants which wouldn’t work for us.
I find it’s much easier to be held accountable when I share what we need to do with all of you. Yes, my wife refers to the list when she asks what I plan to do next. I’m not sure if that’s a good thing for me or not.
In the graphical representation below, I have used excel to provide a prediction based on the past years monthly net worth figures.
Using figures from our actual net worth gains over the past 12 months (the red line) it has suggested that by the end of this year we should be at approximately $700,000.00.
This is nice to know but anything can happen over the next year. Hopefully with some careful planning we can achieve this goal and go beyond it.
Do you set goals for the year?
Our financial numbers
When budgeting anything is possible, we are proof of that although we still have a long way to go in our journey. These are our numbers and our goals, not a means of comparison towards your own goals to others target goals.
We don’t care how much money others make or if they have a high net worth or if it is lower than ours as it’s not a competition. I hope our experiences perhaps will help guide you along your financial path working towards debt freedom.
We all have different financial paths
Not everyone has the same path in life. Some of you may have had to start over like I did or go to school a second time and now have OSAP loans to pay back.
Others may have divorced, lost money in the stock market or other investments, suffered job loss, fell ill or was injured on the job etc. but you can’t let that stop you from achieving your financial goals.
Some of you may have been given trust funds, paid-for homes, paid educations or perks in life that give you a financial kick-start and that’s OK too. Remember what I said, “It’s not about how much money you make, it’s how you save it”.
Focus on you and don’t let the evil eye of money jealousy or keeping up with the Joneses cloud your vision. No one cares about your money as much as you do so don’t waste your energy trying.
The only reason people accumulate wealth is because they know how to save or invest it wisely even if they did inherit money or win the lottery. The smallest improvements should mean big strides in working towards reaching your goals.
Sometimes we have to fail in order to learn and we’ve all been there. Money can be an evil force for some people especially those who have a negative attitude towards their own financial situation.
I urge you to be optimistic and little by little with determination you too should see improvements, if you want that to happen.
Net worth updates 2015
Below you can click the links to read past 2015 net worth updates to see if we were on target or if we struggled with some of our numbers.
Since we are just starting off the 2015 year this is the first net worth update for the year I will start below with the end report for 2014 for those of you that missed it.
In the last year since March 2014 our net worth according to our figures has grown $91,255.49
March 2015 $667,952.26 – March 2014 $576,696.77 = +$91,255.49
That’s all for this month’s net worth update but please check in at the beginning of May 2015 to see how we made out in April 2015 and what has happened to our finances since.
Do you track your net worth? Share your net worth updates with CBB! You don’t have to give your name just a bit about yourself and what you are worth.
Remember: “It’s Not About How Much Money You Make It’s How You Save It“