My Decade-Long Journey To Five Million » net worth

More Accurate Net Worth Update

5m10y — Fri, 12 Sep 2008 15:37:36 +0000

NetworthIQ is fantastic! It lets you keep track of your net worth, and compare it with the net worth of people from similar education background, age group, income bracket, and so many other things.

I wish I had found this site before I wrote this post and this page, which, in retrospect, aren’t really accurate. After including my mortgage, my net worth isn’t really that big actually… it’s even negative! :-S I’m gonna update the net worth page tomorrow to point to my Networth IQ page instead.

(UPDATE: Wrong. My net worth is not negative. It’s actually way positive, because I didn’t include in the calculation the house I currently live in.)

It’s really inspiring to see how people in my age group and income bracket can have such high net worth. I’m hoping to learn a thing or two from them!

And if you’re going there, please drop by and say hi! Here’s my public profile: http://www.networthiq.com/people/5m10y

How Much Should You Have When You’re Retired?

5m10y — Sun, 07 Sep 2008 09:20:02 +0000

You know, the thing about thinking about retirement is that it’s neither a lot of fun nor inspiring. I mean, yeah, I know all about the magic of compound interest, especially when it’s dragged across 40 years. But heck! Who wants to retire at 70? I want to retire when I’m still healthy, when I can still bring my family around the world without arthritis or a replaced hip or even a whellchair!

But that’s beside the point, since to address that we need to concentrate more on wealth building. The question I’d like to address in this post is: given inflation, how much should I have when I really need to retire (ya know, when I’m getting real old)? Trent Hamm from The Simple Dollar answers this question in this money post. I won’t repeat the thumbnail estimating method that he uses there, but I’ll convert it to a formula so I can easily apply it to my goal:

Total $ you need = 300 * (monthly $ in retirement) * (inflation ^ years to retirement)

So plugging the following into the equation:

Having $5k every month (in today’s dollars) to spend when I’m retired
Inflation of 5% per year
25 years to retirement

So we have the total $ I need, which is 300 * 5000 * (1.05 ^ 25), or roughly 5 million dollars. Hey! Sounds familiar! That’s what I’m gonna have in 10 years!

Tracking My Net Worth

5m10y — Sat, 06 Sep 2008 04:39:53 +0000

Without tracking my progress, there’s no way to tell whether I’m getting closer to my goal, farther, or even staying in place. Therefore I’ve introduced a page that I’ll use to track my net worth. As you can see, I’m still so far away from my goal!