What is your Net Worth?

[AuricGoldfinger]

What is your Net Worth? I thought it would be interesting to see what range we have on the forum. The poll is anonymous but please feel free to share your story or goals below.

[GoldElliott]

6 hours ago, AuricGoldfinger said:

What is your Net Worth?

Nice try HMRC

[AuricGoldfinger]

@GoldElliott....expect a brown letter in the post VERY soon!!

[ChrisSilver]

Interesting poll. In my opinion net worth is not so important. What is important is cash flow, what are the fixed expenses vs income. Someone could live in a multi million dollar house but have a huge mortgage and be heavily leveraged on other investments/property, or someone could live in a relatively small apartment and have relatively small fixed expenses and therefore have a large amount of surplus cash each month.

[GoldElliott]

4 minutes ago, ChrisSilver said:

Interesting poll. In my opinion net worth is not so important. What is important is cash flow, what are the fixed expenses vs income. Someone could live in a multi million dollar house but have a huge mortgage and be heavily leveraged on other investments/property, or someone could live in a relatively small apartment and have relatively small fixed expenses and therefore have a large amount of surplus cash each month. Cash flow is king.

I think it depends on what you are trying to achieve. Many people aim to strike a comfortable work-life balance and get by relatively easily. As such cash flow and expenses are probably more relevant- striking a trade off between working hours and living expenses and luxuries.

Many on here stack PMs to preserve wealth and provide a form of inheritance for their children and family and as such net worth is probably more important to those people.

[AuricGoldfinger]

I personally think Net worth is very important - if you have high income yet a low net worth then you are doing something wrong. I see too many high earners who think they are wealthy, live like they are wealthy, spend like they are wealthy, but as soon as the income ends they are screwed. Cash flow is also a very important factor, we have all heard the saying “asset rich and cash poor”. 
 

Someone living in a multimillion dollar house with a huge mortgage is likely to be a high earner with a low comparable net worth. The individual in the apartment can use surplus cash can grow their net worth. Net worth is nothing to do with the size of the house you live in or the image you choose to present to people. The book the millionaire next door touches really well on this subject and i have to say i agree with its findings and viewpoint.

[ChrisSilver]

5 minutes ago, AuricGoldfinger said:

I personally think Net worth is very important - if you have high income yet a low net worth then you are doing something wrong.

Yes propensity to save is important. 

[richatthecroft]

2 minutes ago, AuricGoldfinger said:

 

I personally think Net worth is very important - if you have high income yet a low net worth then you are doing something wrong. I see too many high earners who think they are wealthy, live like they are wealthy, spend like they are wealthy, but as soon as the income ends they are screwed. Cash flow is also a very important factor, we have all heard the saying “asset rich and cash poor”. 
 

 

 

Agreed with the caveat:

9 minutes ago, GoldElliott said:

I think it depends on what you are trying to achieve. Many people aim to strike a comfortable work-life balance and get by relatively easily. As such cash flow and expenses are probably more relevant- striking a trade off between working hours and living expenses and luxuries.

The above very important. 

Sadly, my old man is the proverbial, ‘richest man in the graveyard’.   
As is a close friend of mine.  

Both worked extremely hard for good rewards financially to provide for their respective families, and never went mad with their money, and created wealth and prosperity in terms of comfortable homes and provision for the future.  Sadly- both never achieved the work/ life balance- and working all hours was likely the precipitator To both of their early demises. 

I know my mother and my friends family are left very well provided for- but I also know that wealth isn’t the be all and end all.  
I miss my fathers wise words, particularly his business and money advice- he made profit every single day of his working life- but unfortunately, he didn’t invest in taking things easy and resting. 

I’ve only just gained insight into me potentially walking blindly Into this trap.  
 

Just my take on wealth- it’s not just about net worth- but I concede it’s helpful, if created in a balanced way. 

[AuricGoldfinger]

@richatthecroft thanks for sharing this. 
 

I completely agree. Wealth means many things and includes not just finances but health, family, friendship and happiness. 
 

Sometimes people lose sight of what they are looking to achieve. If the goal is to be a millionaire then remember to ask WHY? A better life?what makes it a better life? What makes you happy? This is where work life balance come in and it’s a shame when you see people waste their lives if they don’t know the answer to WHY. The real big achievers are those who can do it all and be content.
 

I know a few people who are worth over a mil but have no answer to the question, even the thought of their kids having their money makes them squirm. I guess it’s easy to get caught in a cycle, it’s hard but important to try and take stock every now and then I think to ask yourself WHY you do something.

I’m sure you’re late father would be proud to know you have learned so much from him, sometimes the job of a parent it to not only show us how to do things but also how not to do things. A combination of the two creates a wealth of knowledge to pass on through the generations.

[PapaLazarou]

The quality of your time is far more important than the quantity of your money.

[eppteink]

20 minutes ago, PapaLazarou said:

The quality of your time is far more important than the quantity of your money.

Agree but money can give you quality time. You trade your time for money most of your life, if you have enuff money your time will be used in things you enjoy doing. 

[AuricGoldfinger]

I’m sure we can agree it’s all about balance. Money isn’t everything - you can always get money back but once time is gone it’s gone. Having money certainly Can help improve the time we have and the quality of life for ourselves and our love ones. Your net worth growing in my opinion can help secure and improve your position.

[mr-dead]

2 hours ago, PapaLazarou said:

The quality of your time is far more important than the quantity of your money.

Providing you can afford a roof over your head and food on the table without a weekly worry.

[vand]

Absolute net worth isn't hugely meaningful. It's far more important to consider your net worth in relation to your living expenses. If you live on £10k a year with £500k net worth you are minted. If you live on 100k and have £1m in the bank you still have a long ways to go.

FI principles say you need an investment portfolio 25 times your annual living costs to provide income for 30+ years of retirement with a 95%+ success rate of not running out of money (aka the 4% rule).

I'm about 2/3rds of the way there, but would ideally like to get a portfolio somewhere between x30-35 times living costs, so probably about half way to where I want to be. I don't include any home equity in these calculations, although of course owning your own home brings ultimately brings your living costs down so you don't need such a large retirement fund.

The biggest problem for retirees in this country is that most of their net worth is tied up in their homes, and they have not saved enough outside of their home to pay for their daily living costs.

 

[KDave]

3 hours ago, vand said:

 

The biggest problem for retirees in this country is that most of their net worth is tied up in their homes, and they have not saved enough outside of their home to pay for their daily living costs.

 

I agree with your way of looking at homes as a living expense and not an investment. That means on your last point, we are observing retirees that have not saved enough for retirement. Buying a home to live in that then becomes your biggest asset through cyclical effects is not retirement planning imho. 

I am a fair way from where I'd like to be in terms of wealth, but I feel wealthy in terms of family and time, though you can never know where your threads been cut on time. It's all perspective. 

My house will be paid off at the end of the decade if I fix now for ten years and overpay. Work based pension, sipp and PM savings will provide financial security in retirement, all being well. I've said it now 

My old man said to me the other day how much more money he has now he has paid his mortgage off, a couple of years ago now. He said "you have no money when you need it and have loads of it when you don't". Made me think perhaps I'm better spending those overpayments on the family instead. A ten year fix is security enough to keep a roof over our head while we raise the kids. 

[Paul]

How much are you worth ? it is only a score £££ 

it will depend on so many factors.  folk can live a millionaire lifestyle on a lemonade budget if they dont have bills of a millioniare 

one things i can guarantee for a fact, you will never, EVER and without doutct, EVER become rich working in a job or for someone else

Stop thinking about business in terms of your selfish desires, whether it’s money, dreams or “do what you love.”

Instead, chase needs, problems, pain points, service deficiencies, and emotions.

People pleasing, pleasing people the nature result of this is money coming into your mit, do it in the right way, and scaled correctly it can be in the hundred/thousands/millions or billions 

Instead of digging for gold, sell the shovels.

Instead of taking a class, offer a class. Instead of borrowing money, lend it.

Instead of taking a job, hire for jobs. Instead of taking a mortgage, hold a mortgage.

Break free from consumption, switch sides, and reorient to the world as producer

A job seals your fate into a criminal time trade: five days of life traded for two days of freedom.

A job chains you to a set grade of experience.

A job takes away your control.

A job forces you to work with people you can’t stand.

A job forces you to get paid last.

A job imposes a dictatorship on your income. These limitations are counter-insurgencies to true wealth.

[GoldElliott]

10 minutes ago, Paul said:

How much are you worth ? it is only a score £££ 

it will depend on so many factors.  folk can live a millionaire lifestyle on a lemonade budget if they dont have bills of a millioniare 

one things i can guarantee for a fact, you will never, EVER and without doutct, EVER become rich working in a job or for someone else

Stop thinking about business in terms of your selfish desires, whether it’s money, dreams or “do what you love.”

Instead, chase needs, problems, pain points, service deficiencies, and emotions.

People pleasing, pleasing people the nature result of this is money coming into your mit, do it in the right way, and scaled correctly it can be in the hundred/thousands/millions or billions 

Instead of digging for gold, sell the shovels.

Instead of taking a class, offer a class. Instead of borrowing money, lend it.

Instead of taking a job, hire for jobs. Instead of taking a mortgage, hold a mortgage.

Break free from consumption, switch sides, and reorient to the world as producer

A job seals your fate into a criminal time trade: five days of life traded for two days of freedom.

A job chains you to a set grade of experience.

A job takes away your control.

A job forces you to work with people you can’t stand.

A job forces you to get paid last.

A job imposes a dictatorship on your income. These limitations are counter-insurgencies to true wealth.

Whoever works his land will have plenty of bread, but he who follows worthless pursuits will have plenty of poverty. Proverbs 28:19

Interesting take on things, however I find a lot of these kind of messages are easier said than done. In reality an average person of average means would probably find it hard to transition to complete financial independence in short-medium term, but the points you raise are valid  

[Paul]

22 minutes ago, GoldElliott said:

Whoever works his land will have plenty of bread, but he who follows worthless pursuits will have plenty of poverty. Proverbs 28:19

Interesting take on things, however I find a lot of these kind of messages are easier said than done. In reality an average person of average means would probably find it hard to transition to complete financial independence in short-medium term, but the points you raise are valid  

I'm just an "average person". i am not from money or was gifted anything.   I live a nice stress free semi-retired life in my early 40s

Avoiding a wife & kids has probably helped no end adding a good few extra fiat debt tokens to my net worth to be fair ! 

 

 

 

[Cornishfarmer]

24 minutes ago, Paul said:

 

Avoiding a wife & kids has probably helped no end adding a good few extra fiat debt tokens to my net worth to be fair ! 

 

 

 

This is definitely true...... but what ever they cost they are worth every penny.    

[KDave]

9 hours ago, Paul said:

I'm just an "average person". i am not from money or was gifted anything.   I live a nice stress free semi-retired life in my early 40s

Avoiding a wife & kids has probably helped no end adding a good few extra fiat debt tokens to my net worth to be fair ! 

A wife can be a good investment Paul, household income is usually higher, it just needs a strong hand to keep expenditure under control 

[vand]

"You'll never get rich working for somebody else."

Well, maybe. Most people will never become rich working for someone else, but most people will never become rich working for themselves either. Most people will never become rich regardless... that's just a truism. 

There are many possible paths to wealth. The irony is that none of them are easy to follow.  It's certainly not impossible to become a well paid employee, make a lot more than you spend, invest the difference wisely, do it for a long period of time and become very comfortably rich. On esimoney.com he has interviewed a lot of multimillionaires and many of them have exec careers and built their wealth that way. 

[Notafront4adragon]

14 hours ago, GoldElliott said:

Whoever works his land will have plenty of bread, but he who follows worthless pursuits will have plenty of poverty. Proverbs 28:19

Interesting take on things, however I find a lot of these kind of messages are easier said than done. In reality an average person of average means would probably find it hard to transition to complete financial independence in short-medium term, but the points you raise are valid  

Where do I get some land to work?

[KDave]

The biggest financial commitment I have ever made without realising it has been children. It changes everything. Without children to raise and look after financially I would have a lot more money now, but I would be poorer for it.

I am average, started with nothing and not a penny from anyone, but if I didn't have children in my 20's I would be much wealthier today. They have cost a fortune and will continue to do so, they limit the amount of risk I would otherwise take, certainly in terms of my employment/business and investment. I would have been able to use the capital I have put into a house with more bedrooms for children, on investment. My wife and thus household lost years of earnings and experience. I still wouldn't want wealth instead of offspring because its the whole reason we are here. 

Perhaps having them later in life after amassing wealth would have been better, but then I would have been wealthier and older, looking after and spending time and money on children, not retired early. I would not trade it now. At current progress we will be mortgage free around the same time that the kids will be getting old enough to start leaving home, it seems like a good compromise.

[GoldElliott]

2 minutes ago, Notafront4adragon said:

Where do I get some land to work?

Uproot some of your cucamelons and I'm sure you'll have plenty of land for bread trees

[MancunianStacker]

Where is the negative option? 😉 

Unless your assets are more than your liabilities (including a mortgage), it’s unlikely to be possitive.