Here’s a question to you:
I’ve been tracking my Networth since early 2006 when I calculated my networth for the first time and started working to improve it. I’m trying to get into my old NetworthIQ account to see the stats but it won’t let me in. Bummer, anyway…
Since early 2006 it has been my goal to keep increasing my networth every year. In January 2011 my networth was $7,146.07, at year-end 2011 my net worth was $22,615.97. This was because I saved & paid off debt. Earlier this year I decided to aim for $45k for the 2012 year-end, based on last years progress, I was hoping to double my networth this year.
I’ve never posted a breakdown of my networth but included in is is the current value of my car as determined by the /actual current red book value (though I tend to underestimate, just for peace of mind) as well as my investments (at current value, not bookvalue), savings, estimated value of my house and of course my house debt against that. I’ve ALWAYS included all of these in my networth estimates since I feel that my networth should represent what I’m actually worth. Not just the cash, everything. If I drop dead tomorrow and you sell off everything I own and pay off what I owe? That’s what my networth is to me. Which brings me to today’s question:
With my bathroom renovation underway, I am again increasing the value of my house. I still need to put on a new roof, paint the outside trim and fix the sunroom among a host of other small projects BUT things are starting to come together. People walking in no longer see a bad fixer-upper, it’s starting to look like a semi-finished house that’s sort-of move-in ready and the price of my house will reflect that if/when I sell. The guy doing the reno is a family friend and ‘dabbles’ in real-estate flipping, as do my parents. They generally have a bit of an idea of what’s going on and what things are worth. I’ve also been keeping an eye on comparables in my neighbourhood and based on that the value of my house has increased substantially since I’ve bought it but this hasn’t been reflected in my networth.
Today I updated my budget with a more reasonable number for the value of my house, I completely lowballed it at $90,000 putting it 10K under what comparables in my neighbourhood have gone for, and 20k under the list price of similar homes in my area. BUT changing my houses’ value in my budget instantly pushed me past my $45k networth goal for 2012 to $45,195.48 and I was wondering… is that cheating? It’s the truth and it’s how I’ve always calculated my networth but I feel like I somehow took a shortcut (though, all that blood sweat & tears I’ve poured into the house can hardly be defined as a shortcut, haha)
What do you think? Do you track your networth?