Investing

Tracking Networth

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  • Dec 13th, 2019 9:34 am
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[OP]
Member
Jan 13, 2016
439 posts
207 upvotes
Vancouver, BC

Tracking Networth

I noticed networth iq's site has gone down so i'll have to find another way to track my networth. There is a site called networth share but i'm feeling a little burned by networth iq's demise. How are people tracking their networth? Do you include your residence, money saved for vacations and emergency fund? Do you use excel?
15 replies
Deal Addict
Nov 9, 2013
3640 posts
3120 upvotes
Edmonton, AB
I do it every 6 months in excel.

For assets I include residence, cars (current fair market value for both), cash in bank, investment accounts, cash / assets in private corp, etc.
Keep calm and go long
Sr. Member
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Nov 23, 2004
863 posts
399 upvotes
Edmonton
I never used Networth IQ but I also use Excel. I broke it into liquid assets (cash in bank), Investments (RRSP, TFSA, GICs) and assets like Vehicle and property. I ballpark what my vehicles are worth and slowly depreciate them for the sake of having a more realistic view of my network.

I have a few formulas showing difference from previous month as well as trailing 12 months difference and finally, the difference since I've started tracking my networth. For the row for my stock market account value, I've set a rule that highlights the month where the value is the highest ever, just for my viewing pleasure as I don't trade much.
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Deal Fanatic
Sep 23, 2007
5061 posts
1150 upvotes
I just use excel. I am an accountant so it is very natural to me.

Net worth is your assets minus your liabilities. In accounting it is called a balance sheet.

Examples of assets:
-Cash, including non-GIC accounts like savings.
-Investments (TFSA, RRSP, non-registered accounts that hold investments)
-Fair market value of real estate

Examples of liabilities:
-Mortgage balances
-Auto loans
-Any kind of promise to pay something back. If you promised to return a non-cash item that is of large value, I would include it here.

So subtotal and the difference between the 2 groups is your net worth. I personallywouldn't call a car, or your education credentials an asset. For a car, the resale value is often quite low and hard to guess. If you want to put your car, then you have to keep calculating depreciation. I just treat automobile purely as an expense. For education, it is a sunk cost and the market value is not something you can measure.

Things like your vacation expenses and property taxes you can treat as part of your cash flow statement. You need both cash flow statement and balance sheet if you want to measure your financial health. Balance sheet says how much you have. Cash flow says how much money you make net of expenses. As you make money (from employment or otherwise) and get paid, your cash balance goes up. Then as you put the money into investments, you are increasing your non-cash assets. If you pay down your mortgage, you reduce your cash balance but also reduce your liabilities.

In your cash flow statement, list your cash inflows and outflows.

Examples of inflow:
-Employment income
-Recurring expected dividends
-Interest income
-Business income (including rental income)

Tons of cash outflows for the average adult ranging from property taxes, to mortgage payments, childcare expenses...you name it. When you are done listing your in and out flows of cash, you will get a picture of how much disposable cash you have to play with.

I do my statements monthly with the months going horizontal so I can compare my growth. My cash flow statement is by month but subtotalled for the year so I can plan for the whole year. Like...I know I like to review my RRSP around January so I usually put a planned number there for additional RRSP contribution in February. I plan my vacations in advance and generally know how much cash I need during the year.

I never find an app necessary. I don't find it necessary to be updated every single time I have a transaction. That would drive me insane.
Member
Mar 26, 2012
317 posts
153 upvotes
BananaHunter wrote: I just use excel. I am an accountant so it is very natural to me.

Net worth is your assets minus your liabilities. In accounting it is called a balance sheet.
In accounting, it is called net assets, or owner's equity or shareholders' equity (assets minus liabilities).

I dont track my NW, but do have a rough idea of its amount, plus or minus 200k.

QUOTES ON NET WORTH:
- Dont let your networth determine your self worth.
- I can see why people want to become a millionaire, but after that, it is the same hamburger (bill gates)
- Money does not buy happiness. I had 48M last year, and 50M this year. But I am not happier this year. (arnold schwarzenegger)
Deal Addict
Feb 26, 2017
1446 posts
1326 upvotes
I track my investments monthly with the Boggleheads irr spreadsheet.

https://www.bogleheads.org/wiki/Calcula ... al_returns

I really recommend this as its a good method of tracking your real returns (I have it set up to also give an overall balance).

The rest of my net worth is from my house. I only really know a ballpark amount though and it could be +/- 150k. I don't hold much cash and my two cars are not worth much so I don't track that either.
Deal Addict
Sep 2, 2004
2190 posts
491 upvotes
I just use Excel to track net worth, similar to above. I do include my residence but it's shown at the purchase price so the number is conservative compared to market value. I do not include my vehicles or any other smaller assets.
Chance7652 wrote: I track my investments monthly with the Boggleheads irr spreadsheet.

https://www.bogleheads.org/wiki/Calcula ... al_returns

I really recommend this as its a good method of tracking your real returns (I have it set up to also give an overall balance).
Thanks for the suggestion. I've been meaning to do more return/IRR calculations and tracking so I might give this a shot.
Member
Oct 31, 2014
217 posts
88 upvotes
Edmonton, AB
Do you guys count your RRSPs at 0.75 value? Because surely when you take it out, you'll be taxed at least 25%

Also how do you ball park your house? I bought mine for 250k put 20k reno's in it, and 7 years later I know its worth well over 300k based on the area and friends trying to buy... also minus the fees for selling?
300 - mortgage?
Deal Fanatic
Mar 24, 2008
5947 posts
2167 upvotes
Toronto
SheaButters wrote: Do you guys count your RRSPs at 0.75 value? Because surely when you take it out, you'll be taxed at least 25%

Also how do you ball park your house? I bought mine for 250k put 20k reno's in it, and 7 years later I know its worth well over 300k based on the area and friends trying to buy... also minus the fees for selling?
300 - mortgage?
RRSP withdrawals are taxed based on your income in the year if withdrawal. It could be 25% (or more) or it could zero. It depends on your personal situation.
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Deal Addict
Nov 9, 2013
3640 posts
3120 upvotes
Edmonton, AB
SheaButters wrote: Do you guys count your RRSPs at 0.75 value? Because surely when you take it out, you'll be taxed at least 25%

Also how do you ball park your house? I bought mine for 250k put 20k reno's in it, and 7 years later I know its worth well over 300k based on the area and friends trying to buy... also minus the fees for selling?
300 - mortgage?
I take my RRSP at 1.00 value. You're right in that this doesn't take into account a future tax liability, but I also do not know what this future tax liability will be. If you really wanted to be conservative you can adjust downwards, but I personally don't.

I ballpark fair market value for my house based on my subjective perception of the current market value. Unfortunately, over the last 5 years it's been continually revised downwards.
Keep calm and go long
Member
Mar 26, 2012
317 posts
153 upvotes
How do you guys account for pension income receivable in your net worth calculation:
- Life expectancy?
- Present value?
- Future value?
Deal Addict
User avatar
Feb 1, 2012
1271 posts
1612 upvotes
Thunder Bay, ON
I use Quicken to track my net worth, investments, income and spending. I have over 25 years of data. Great for tracking things like home and car expenses, and when I made any major purchases or expenditures.

I also use the Bogleheads returns spreadsheet mentioned upthread by Chance7652. Highly recommended.

I record my RRSP and other investments at current (pre-tax) value. If adjusting current value of RRSP to account for taxes, you should do the same for capital gains taxes if you have a non-registered account. Instead of doing that, I record everything at current value, then when I project future portfolio withdrawls I adjust then for investment taxes. It lets me apply different tax rates at different times. Tax rate based on my salary while working, then much lower during early retirement years, then higher when I turn 71 and mandatory RRIF withdrawals begin.

For a DB pension I never included its current value in my net worth. I included income from it (and taxes) in future income projections. For DC pension where the value is easy to see, include it in net worth.
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.
Deal Addict
Feb 26, 2017
1446 posts
1326 upvotes
fkungery wrote: How do you guys account for pension income receivable in your net worth calculation:
- Life expectancy?
- Present value?
- Future value?
I'd probably look at it from its present value (I think its referred to as the Commuted Value). You might want to check your yearly statement.

My wife has a pension that she's paid into but I don't know how much its worth or factor it into our net worth. What I've looked at is trying to estimate what it will pay out (this is almost 20 years away). I track my investments every month but don't really follow the other areas that make up my net worth closely.
Deal Fanatic
Sep 23, 2007
5061 posts
1150 upvotes
fkungery wrote: How do you guys account for pension income receivable in your net worth calculation:
- Life expectancy?
- Present value?
- Future value?
Good question. This isn't an exam question so you are free to do whatever. My advice is to keep the math simple.

For RRSP, I simply take current value of the RRSP as per the latest account statement because these fluctuate with the market. To adjust for present value and factoring in life expectancy seems a bit redundant. So simply log into the account and the number you see is what I would recommend you factor in as your asset. I would rule out future value because this is crystal ball territory. Technically, you can cash out your RRSP at any time, though it would be taxable. If you want to be conservative, you can take the balance of your RRSP accounts, and subtract from it a modest amount of expected tax you will pay. I don't personally do this. This would make sense especially if you anticipate cashing out.

For CPP, you can't just "cash out". Service Canada calculates your expected monthly payment. Viewable online. You can take this number to an online Annuity calculator. Make some assumptions about interest rate and just put in a conservative number for the value of your CPP.

While you are at it, for any large sellable asset with fair market value, the value I would put on the balance sheet would be the net realizable value after taxes and commission. So if your home is worth 1M, when you sell, if it is not a principal residence, then assume 50% of the gain is taxable and that you will pay perhaps 5% commission.
Deal Addict
Mar 10, 2010
1291 posts
285 upvotes
I do what Capt. does too. Excel sheet with only my house (purchase price + small upgrade) I don't include cars as it's not worth it. I include all liquid assets I control. For pensions I use the commuted value as of the date I calculate net worth (usually Jan 1). I don't reduce either my pension or my RRSP's.

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