NetworthIQ is a site where you can track and share your net worth.
For those readers who don't know, net worth is the sum of your assets, less the sum of your liabilities (debts). As an example, you have the following assets and liabilities:
Car: KBB Trade in value of $5,000
Checking Account: $600
Savings Account: $50
Credit Cards: $1,200
Auto Loan (for the car above): $5,100
Your net worth is ($5,000 + $600 + $50) - ($1,200 + $5,100) = $5,650 - $6,300 = $650 (red because it's less than $0).
Note that the Auto Loan is for the car listed, this illustrates equity, the difference between an asset's value and how much is owed on it. In this case, there is negative equity of $100 on the car, since more is owed than it is worth.
Now, back to NetworthIQ. There are several things you can do at this site, most important of which is the ability to enter your assets and liabilities (along with an optional entry explaining changes that have occurred). The other functions you have are: Posting/Answering Community Questions, blog through Journal entries, post Tips, send and receive private Messages, run a Comparison Report (more on this feature when I've had a chance to explore it) and, of course, Account Maintenance.
Not mentioned above is the NetworthIQ Badge:
Goals:
Long term (2+ years):
- Achieve a net worth of $250,000 by December 2012 (5 years)
- Achieve easy liquid assets of $10,000 by December 2012 (5 years). Note: Not originally posted, PLUS this is only a PORTION of my net worth goal.
- Purchase a home by June 2010 (2.5 years)
- Eliminate all current debt (credit cards, current auto loan, and student loans) by December 2009 (2 years)
Short term (2008):
- Eliminate credit card debt ($9352)
- Eliminate other debt ($1043)
- Increase Cash ($0 after upcoming bills to $1,000 after immediate bills)
- Increase Retirement (to $3768 [was $6057 due to calculation error], not hard since I contribute 4% from my paycheck and my employer contributes 10% as long as I maintain 2%... WONDERFUL benefit).
- Increase Stock Investments (to about $400)
- Purchase some US Savings Bonds ($200)
Anticipated net worth by December 2008: ($29312)+$9352+$1043+$1000+$2200+$200+$200 = ($15317). I know this is not a positive net worth, but a 48% increase in net worth. I anticipate setting my 2009 goals for an end of year positive net worth, but that's next year.
4 comments:
Hi there,
I was glancing through your blog and I'm confused about your goals and information you provided on networthiq. You want to buy a house and achieve a networth of 250k in 5 years, yet the income range you provided (20-30k) will make that goal impossible to reach (30x5=150 and that's without living expenses, taxes, etc). If you are wanting to buy a house and have a quarter million in the bank your going to need to generate an income closer to 75k a year. How do you plan to do this with a low income?
ferret,
Net Worth is the sum of ALL assets, minus the sum of ALL liabilities. I'm looking for a net worth of $250k, but it will not be all in the bank, it will be principally investments, such as stocks, bonds (in my case US Savngs Bonds) and my 403(b) (retirement annuity).
Part of achieving the home purchase is doing the "unthinkable," moving back in with my parents (net savings of $375/month... rent is $475/month, but I am putting my stuff into storage at $100/month. I will be posting my strategy in more detail in two upcoming posts (first will be achieving 2008 goals, second will be achieving these long term goals).
I understand the definition of net worth, I just don't understand how you are going to get there with that income level. I think trends on current short term goals make good long term goals, in your "Anticipated net worth by December 2008" you add 14k to your net worth. It's safe to assume that as you get out of debt you will no longer pay interest and your investments will start working for you, if index funds are any indication of that you will make on average 8% a year, living with your parents will save you 4.5k which should help. But given that trend in 5 years you will have closer to $60,000 (unless you buy a house). I know I'm just being impatient, but where is that extra $190,000 going to come from?
Hi Nathan, thanks for the post, great to meet new NetworthIQ users around the web. I see where you're going with your goals, and it appears to me from a quick glance that a Net Worth of 250k in five years is not out of the realm of possibilities. Like you say, the key is appreciating assets. Best of luck!
Ryan
(NetworthIQ guy)
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