Comments on: May 2007 Net Worth Update (+3.04% )

By: FrugalTrader

FrugalTrader — Tue, 26 Jun 2007 21:09:40 +0000

Nobleea! It really depends on how to want to keep track of your finances. Technically speaking though, Net Worth = Assets – Liability. A primary residence is considered an Asset. How I normally calculate the value of my primary residence is the price I would receive if I sold the house after real estate and legal fees.

Unfortunately, I don’t have the luxury of living in a hot housing market.

By: nobleea

nobleea — Tue, 26 Jun 2007 20:07:16 +0000

Most financial planning books I have read do not include the value of your primary residence (or mortgage) in calculations for net worth. Does your goal of millionaire by 35 include the net worth of your primary residence as well? For those of us living in hot housing markets such as Calgary or Edmonton, this would certainly help our cause!

By: FrugalTrader

FrugalTrader — Fri, 01 Jun 2007 13:09:10 +0000

Thanks for the encouragement guys.

FinancialBlogger: The $35k in savings is in a PC Financial savings account (4%). The reason why we’re saving the cash is because we plan on purchasing a new home soon, and we’ll use most of the cash then towards a down payment.

QCash: Good point! But I like sudden 10% jumps in savings. :)

By: Q Cash

Q Cash — Fri, 01 Jun 2007 09:16:58 +0000

Good job FT.

One thing I do though is if I know I have a income tax return coming, I set up an “accounts recievable” account on my NW statement because the cash you recieved is actually a credit against the income tax you paid last year.

It should be included in your NW statement of 2006 at Dec 31, 06.

That way, it doesn’t skewer your results (10% in savings increase) from what you normally would do month to month.

At the same time, if there are taxes owing, I set it up as an account payable at Dec 31.

Usually, I have a small return and my wife usually owes a little so the two amounts usually balance each other out so the overall effect on my NW is not huge.

By: FinancialJungle.com

FinancialJungle.com — Thu, 31 May 2007 22:30:07 +0000

May have to rename your blog to TwoMillionsDollarJourney.com.

By: FinancialJungle.com

FinancialJungle.com — Thu, 31 May 2007 22:26:18 +0000

Well done, MDJ. According to the rule of 72, you’ll be worth $1 million in 3 years, assuming you can grow your net worth at 24% per year.

By: FourPillars

FourPillars — Thu, 31 May 2007 13:24:16 +0000

I’ll say that’s impressive – just looked up your age in the ‘about’ section.

When I was 27,28 I had about $15k in rrps, $15k in personal debt and no other assets so you are miles ahead of where I was.

By: The Financial Blogger

The Financial Blogger — Thu, 31 May 2007 10:52:17 +0000

Hi MDJ, That is quite impressive for your age actually. Small question, are you investing this 35K in Savings or it is just left as liquid cash in case of trouble?
Cheers,
FB.