Lenten thanks, Day 14
Well, I sure am glad the workers at Fukushima seem to be getting their fractured reactors back under control. That’s something, anyway.
Using Net Worth as a Personal Finance Benchmark
This is a post by Miranda Marquit, who serendipitously appeared just as the present nasty virus was making me think I would die if I had to write a single word today. I think you’ll enjoy the article that she kindly wrote for us. Thank you, Miranda—you couldn’t have come along at a better time!
Miranda publishes her own (very engaging) blog at This Time It’s Personal.
When it comes to your journey to financial freedom, it helps to have milestones along the path. One of the personal finance benchmarks you can use is net worth. Your net worth offers you a picture of where you are at now. You can use it to chart progress toward financial goals.
Net Worth: A Financial Moment in Time
Your net worth represents a financial moment in time. It is a snapshot of your current money situation. You figure your net worth by subtracting your liabilities from your assets. Once you have that number, you have a place to start.
The first step is to add up your assets. This includes the market value of your home, as well as the value of your investments, your checking account, your savings account, and any other items of significant value. Next, you add up your liabilities. Your liabilities include what you owe on your mortgage, any debts you have and other obligations that you have incurred.
Here is a basic example of how you can do a net worth calculation:
Assets:
- Market value of home: $180,000
- Savings: $10,000
- Checking: $3,000
- Investment account values (including retirement accounts): $35,000
Total: $228,000
Liabilities:
- Mortgage balance: $165,000
- Car loan: $9,000
- Credit card debt: $4,500
- Medical bills: $2,000
Total: $180,500
Net worth: $228,000 – $180,500 = $47,500
As you can see, the net worth in this case is $47,500. To increase your net worth, you will need to either pay down debt or increase your assets. Your assets can be improved by increasing your income, or by making investments that appreciate in value.
Measuring Your Progress
Once you know where you stand right now, you can begin making plans to improve your situation. Take stock at regular intervals. Decide whether you want to measure your progress every month, every quarter, every six months, or every year. Many people find that tracking their net worth monthly or quarterly helps to keep them motivated.
It is important to realize, though, that there are some things that you won’t have complete control over. If you are engaged in long-term investing, such as the investing you do through a retirement account, your net worth might fluctuate in the short term with the market. Many people experienced a lower net worth during the recession, as their retirement accounts dropped. (However, those who weathered the down market are now seeing a sharp rebound in net worth.)
Remember that your net worth is a picture of your current situation. Try to figure your net worth on the same day of the period, such as the first day of the month, or the last day of the quarter. This way, you will be more likely to be comparing apples to apples when it comes to your pay schedule, and the bills you pay.
Create an overview of your financial situation by tracking your net worth over a period of years. As you work on a debt repayment plan, as you pay down your mortgage, and as you look for ways to increase your assets, you will find that your net worth trends higher—leading you toward a more secure future.
Miranda writes for a variety of personal finance web sites, including the AllBusiness Personal Finance Corner, and Credit Cards Canada, a site specializing in the best Canadian credit cards.
More to Come…
Lenten thank, Day 12
Thank God I don’t still live in Saudi Arabia!
My mother, who was a low-key enthusiast of Edgar Cayce and things mystical, used to say the Apocalypse would come from the Middle East. She used to say a lot of things…but why not? It’s gotta come from someplace, after all.
We’re now engaged in another war in another Middle Eastern country, where we’ve been at war longer than we were during World War II. The entire region is erupting, a development which does not bode well.
IMHO, if we don’t free the West from dependence on Arab oil, we will see something very like an apocalypse, because that is what the collapse of a dependable, cheap energy supply will do to our economy. Someone else once said it better: a hard rain’s a-gonna fall.
But…maybe it’s just the mean virus speaking. It was a long, dark night.
Now I have to run to teach two classes—mercifully, they’ll be parked in front of computers today. By the end of the day, though, a lovely guest post should be ready to mount. Meanwhile, don’t take any wooden nickels!
Image: ColWilliam. Public Domain.
New Financial Goal
Lenten Thanks, Day 11 (i think)
And O.K., God. Thanks (i guess) for the pittance Funny about Money earns off Adsense. It’s…better than a hit in the head, at any rate.
But it is a pittance.
Just finished putting together a presentation for the business group in which I intend to propose that my new Scottsdale business friends advertise on Funny about Money.
The site has pretty respectable traffic—14,200 unique visits a month, 3.2 million hits a year add up to a whole lot of eyeballs on ads. In theory, many more eyes hit the virtual pages of Funny about Money in a month than ever see the pages of, say, Phoenix magazine. Since ad rates for websites are so low compared to print media with similar demographics, a business owner gets a heckuva buy for his or her advertising dollar.
My goal is to sell enough ads to double Funny’s revenues this year. The plan is to push AdSense below the fold and to use the prime real estate for customers who are willing to pay something more than 30 cents a day. I’ll keep AdSense (though may knock out some of its ad blocks), but downplay it in favor of ads that make a more reliable and fair return.
Since AdSense pays precious little, doubling FaM’s revenues will not be very hard.
It remains to be seen, of course, whether a living, breathing business executive can be persuaded to spend even precious little to see his company’s name in glowing characters on a computer screen. Most of these folks are older and not very techie. However, almost all of them sell services that would interest FaM readers: financial products and management, travel and resort services, healthcare, and the like.
It’ll be interesting to see if I get anywhere with this! 😉
Saturday Meanderings
Lovely weather today, assuming it’s not radioactive. Got a ton of things to do, but will pause to offer these discoveries from the blogosphere:
At I Pick Up Pennies, Abby reflects on her many blessings that have buoyed her through some very hard times.
Her mom, Donna Freedman, is back from England, having reported on one last off-the-wall adventure.
The Digerati Life’s proprietor, Silicon Valley Blogger, features a very nice survey of the types of shredders available. Nice timing here: my aged shredder is wearing out & soon will need replacement.
Revanche and PiC are about to buy a Dog Chariot! LOL! I thought I was the only person who bought a vehicle to accommodate the dog.
Mrs. Accountability had to make a difficult decision to deal with some unexpected car costs.
Five-Cent Nickel tells a tale of foreclosure and financial ruin, and it’s a story with some puzzling aspects.
Mrs. Money is getting deluged with unexpected expenses…ain’t that always the way?
Financial Samurai has posted a very detailed discussion of when you should and when you shouldn’t hire an accountant to do your tax returns. This is really quite a good post and it elicits some interesting comments from readers.
Money Crush and spouse are streaking toward their goal of paying off their mortgage.
At BripBlap, Steve issues some excellent advice to those who are feeling less than thrilled with the day job.
You have to move fast to keep up with Bargain Babe. Go there today for leads to 17(!) coupons and freebies.
At My Journey to Millions, Evan and The Wife contemplate a move to bigger quarters, now that the parents wish to visit for the purpose of doting on the new babe. When we said “there’ll be some changes made,” were we psychic or what?
And finally, in the hilarious excess department, check out this outrageous story at The Consumerist. “Floozy”! Who would think anyone under the age of 60 had ever heard the word, much less knows what it means? 😀
Alley Treasures
Lenten thanks, Day 10
Thanks, God, for leading the late, great tax lawyer to shuck me off her rolls and for moving a tax accountant into Dave’s (former) Used Car Lot, Marina, and Weed Arboretum. She and her husband not only are splendid neighbors, she saved me a ton of money on this year’s taxes and charged a fraction of what the lawyer’s been billing.
If this doesn’t warm the cockles of Frugal Scholar‘s heart, nothing will.
So I’ve been building a berm around the north side of the biggest orange tree, where the grade slopes enough to draw the irrigation water away from the tree and direct it under the gate and out into the alley. This has been a longstanding annoyance, but I’ve been too lazy to do much about it.
Having dug a couple of deep holes for a pair of new roses, I finally had some nice, clayey, sticky dirt with which to form a low semicircle that I hope will trap the water…without my having to find enough dirt to build an entire circle. That’s the plan. To shore up this mound, I want to cobble its surface with river rock. I do not wish to purchase the river rock.
Luckily, the alleys around here are full of loose rock, quite a lot of it just what I have in mind. So I spent half a morning walking up and down the alleys scavenging stones. As I’m skulking around, what should I find but a big framed giclée print, brand-new, still in its Costco cardboard protectors, just sitting there next to the garbage can.
Why is it in the alley?
Its glass is cracked.
Somebody paid $29.99 for this thing, marked down from $39.99. Think of that.
First, it means one of my neighbors can afford to throw $29.99 directly into the trash. Second, it means they don’t have enough sense or craftsiness to schlep to the nearest glass shop, ask them to cut a piece big enough to replace the broken pane, deconstruct the cheapie frame, and fix it themselves.
Granted, Aaron Brothers or Michael’s will charge more to replace the glass than the junk print is worth. But a glass shop will charge just a few dollars. And taking a picture frame apart is just not very difficult.
The thing is an awful cliché, of course. But I couldn’t leave it to die in the alley. My plan is to replace the glass and then hang it on the back patio, well in under the overhang where it can’t get wet. In time it’ll fade, of course. But for the nonce…hey! Free décor!
Moving on, the rock quarrying endeavor is slowly yielding a nice variety of stones and rip-rap. I found some thick broken slices of unpolished milled granite (??? what do you do with that?), a few pieces of flagstone, and many, many desert stones and river rocks. Here’s the nascent project; it’s much further along now than it was here. I expect another two or three alley expeditions will retrieve enough rocks to cover the entire semicircle.
I hope this works. Sometimes my berming schemes succeed, sometimes not. An awful lot of water pours out of that tree’s bubbler. This mound may not be tall enough to contain it, or it may flow downhill toward the gate fast enough to wash the dirt away, stone paving or no stone paving.
We shall see.