Net Worth 1 Million in 5 years

[sv2007]

I don't consider anyone that own a million dollar home, a millionaire unless they are completely debt free. That's just feeding the media hype the public perceptions often not the reality. I have several friends lives in San Jose/Silicon Valley area, their homes are worth a million. But they make average $150K a year but they also have enormous debt with very little savings.

No need to be completely debt free. Lots of people here have more than $1m in equity in their homes. In fact, if you bought an average house here in 2010, chances are that you've got about $1m in equity just from the appreciation. (This also shows how leverage can work for you.)

This is the first time I hear someone refer to the SF bay area as "San Jose/Silicon Valley area". I like it.

[sv2007]

I agree. Someone who dumped all their spare cash into the house vs the bank/stock market is the same thing. Having a mortgage of -500k and having 400k in your bank vs -100k mortgage with 0 cash is the same thing. You can argue that investing the 400k may give you a better yield than the 3-4% interest you save but that's not the point of net worth.

It is not the same thing for most investors.
One form is classified as liquid while the other is illiquid. There's a big difference; big enough even for you to go bankrupt.

[disneysteve]

Someone who dumped all their spare cash into the house vs the bank/stock market is the same thing.

It's the same as far as net worth is concerned, which is the point of this thread.

It is most certainly not the same as far as your personal finances are concerned.

[parafly]

Home equity should absolutely be included in your net worth calculation. Personally, I like to break it down into three separate calculations.

Net Worth
All assets - All liabilities
All assets includes real estate, cars, personal items, investments, etc.

Net Liquid Assets
Liquid savings + Investments

Net Investible Assets
Liquid savings + Investments + Retirement

Using this strategy, you get a well rounded and fully transparent break down of your overall financial picture.

[tripods68]

Latest Update....

It's been two years since I last update our Net Worth.

Things have pointed upward over the last 1.5 years. Our Net Worth went up 198K in 2017. This year YTD we are up about $88K.

We are on target of putting away $80K in pre-retirement account buckets + ROTH IRA contributions (post-tax). We sold our first home about two years and now leave in our new home.

$7,907.0 CASH
$315,843.00 INVESTMENT/RETIREMENT
$334,632.00 PROPERTY
($226,997.00) MORTGAGE LOAN BAL

$431,394.00 NET WORTH As of 6/26/2015


$46,805 Cash
$419,029 Investment/Retirements
$340,527 Property Value
$806,361 Total Asset
($218,187) Mortgage Balance

$588,174.16 NET WORTH As of 5/3/2016


$7,192.86 - Cash
$642,230.86 - Investment/Retirements
$530,361 – Property Value
$1,179,784.72 Total Asset
($438,531.67) Mortgage Balance

$741,253.05 NET WORTH As of 7/20/2018


Our initial goal this year pessimistically is a target of $750K. We are already $741K. It looks like we will be hitting this number shortly.

Optimistically I’d like reached $800K by the end of the year. Our ultimate goal is to achieve 1 million Net Worth. We may very well reach our target goal in about five years, or the year 2020. Stay tuned.

Some would disagree that we shouldn’t include our home to Net Worth. We can disagree or agree, but this is our net worth and nobody else.

[LivingAlmostLarge]

Congratulations! I bet you hit a $1m next year.