WEBVTT - What Are You Worth? #257 0:00:00.120 --> 0:00:02.640 Welcome to How the Money. I'm Joel and I and 0:00:02.800 --> 0:00:05.480 Matt's and today we are asking the question what are 0:00:05.519 --> 0:00:27.680 you worth? That's Rachel, what are you work? It's such 0:00:27.680 --> 0:00:30.600 a provocative question if you actually think about it. It's 0:00:30.680 --> 0:00:33.200 the value of a human life. Man. It's a lot 0:00:33.960 --> 0:00:35.879 economists will actually put a number on it, you know, 0:00:35.920 --> 0:00:38.680 like they run studies and whatnot. But it actually makes 0:00:38.680 --> 0:00:42.080 me think of a near where we live. On our 0:00:42.120 --> 0:00:44.919 part of town, there's an old fast food restaurant that's 0:00:44.920 --> 0:00:47.240 been closed for years, your Long John Silver's. Uh No, 0:00:47.440 --> 0:00:49.120 not that one. On the other side of the street. 0:00:49.120 --> 0:00:51.000 We have a lot of closed down faster restaurants nearby, 0:00:51.240 --> 0:00:53.880 But I'm talking about the one that says on one 0:00:53.880 --> 0:00:56.279 side of the sign that says what's your and then 0:00:56.280 --> 0:00:59.240 on the other side it says sole Purpose. So it's 0:00:59.280 --> 0:01:01.400 always kind of intrigued me. It's it's kind of you know, 0:01:01.400 --> 0:01:03.520 it's it's a provocative sign for me. It always kind 0:01:03.520 --> 0:01:05.080 of get you thinking a little bit. And so, you know, 0:01:05.120 --> 0:01:07.520 that was our goal for this episode, what's Your Worth? 0:01:07.600 --> 0:01:10.440 But we're specifically talking about your net worth. We're not 0:01:10.480 --> 0:01:13.040 gonna necessarily dive into all the things that we need 0:01:13.080 --> 0:01:16.640 to keep in mind when we are judging the quality, 0:01:16.920 --> 0:01:19.560 you know, of our life, our happiness. But yeah, we're 0:01:19.640 --> 0:01:21.840 we're talking about net worth. And I'm actually surprised that 0:01:21.840 --> 0:01:24.520 we haven't talked about this sooner before on the show. Yeah, 0:01:24.600 --> 0:01:26.800 me too. It's such an integral number to personal finance. 0:01:26.840 --> 0:01:29.319 It is, it is, and and obviously your net worth 0:01:29.480 --> 0:01:31.760 is important, but it's also not, of course, the most 0:01:31.800 --> 0:01:34.520 important thing. If it were, that would mean Jeff Bezos 0:01:34.560 --> 0:01:37.240 war is it's two times more important than me. And 0:01:37.280 --> 0:01:40.080 we know that's Hansu maybe maybe one or two billion. 0:01:40.080 --> 0:01:42.240 I'll give him that. He's only worth like five times 0:01:42.240 --> 0:01:45.560 more than you, exactly exactly the human capital. I don't 0:01:45.560 --> 0:01:47.360 know what that means, but right, But yeah, so we're 0:01:47.400 --> 0:01:49.640 gonna talk about net worth today. What net worth means, 0:01:49.920 --> 0:01:53.200 How you can calculate your own net worth, where it 0:01:53.280 --> 0:01:55.640 falls short, all those kind of things. Net Worth is 0:01:55.680 --> 0:01:57.680 the discussion we're gonna be having on the show today. 0:01:57.800 --> 0:01:59.440 Let's do it. But before we get to that, Matt 0:01:59.760 --> 0:02:03.960 not yet frugal or cheap and or the opposite of that, 0:02:04.040 --> 0:02:08.440 and maybe it's neither. Uh. The other day, if I 0:02:08.480 --> 0:02:10.919 did not get ripped off, but we kind of um. 0:02:11.520 --> 0:02:14.240 Birthday cards or buying a card in a store for 0:02:14.280 --> 0:02:17.000 someone is, oh, you ripped yourself off. I ripped myself off. 0:02:17.520 --> 0:02:19.720 I didn't plan ahead. And granted, I have kids, so 0:02:19.760 --> 0:02:21.160 I don't need to buy cards or anyone. I could 0:02:21.160 --> 0:02:23.320 just have them make it out of construction paper. But 0:02:23.360 --> 0:02:25.560 I kind of felt the need for some reason this 0:02:25.639 --> 0:02:27.600 year from my mom's birthday to get a for real card. 0:02:27.760 --> 0:02:29.680 Usually I go to Trader Joe's because there are one 0:02:29.720 --> 0:02:32.360 dollar cards and they're really nice, but I get some 0:02:32.480 --> 0:02:34.560 three butch chuck while you're at it. Yeah, maybe, and 0:02:34.600 --> 0:02:36.560 I just didn't have time to head to Trader Joe's 0:02:36.639 --> 0:02:38.240 this time, so I went to I went to Target, 0:02:38.440 --> 0:02:40.600 and I got a four dollar birthday card. I was 0:02:40.600 --> 0:02:42.440 looking at the cards. Some of them are nine and 0:02:42.480 --> 0:02:46.320 ten dollars for a birthday card, like music playing and 0:02:46.360 --> 0:02:48.520 like fuzzy stuff on the front. It's kind of crazy. 0:02:48.560 --> 0:02:50.480 It's out of control with a lot of money. But yeah, 0:02:50.520 --> 0:02:53.280 so did I rip myself off? Am I should I 0:02:53.280 --> 0:02:55.639 have been more frugal or cheap? Or is it okay 0:02:55.639 --> 0:02:57.920 every once in a while to last minute buy a 0:02:58.000 --> 0:02:59.799 four dollar birthday card for someone you love. I don't 0:02:59.800 --> 0:03:02.840 think need to beat yourself up over it. Four dollars 0:03:03.000 --> 0:03:05.440 in the grand scheme of things, is that a big deal? Like, No, 0:03:05.639 --> 0:03:07.280 if that was us, if we were in that situation, 0:03:07.400 --> 0:03:10.399 that's just an expense that goes into our our giving category, 0:03:10.440 --> 0:03:12.480 which that's our category of our budget every month that 0:03:12.520 --> 0:03:14.920 we set aside for birthdays and money that we spend 0:03:14.919 --> 0:03:18.000 on other people. But could you have spent those three dollars, 0:03:18.240 --> 0:03:20.399 those three additional dollars elsewhere, you know, if you since 0:03:20.400 --> 0:03:22.440 you didn't make it a traitor Joe's yeah, I guess, 0:03:22.440 --> 0:03:25.360 so you could have bought a bottle of wine. But 0:03:25.400 --> 0:03:27.240 I totally hear what you're saying. You know, I'm assuming 0:03:27.280 --> 0:03:29.720 you didn't plan ahead, you know not. And that's actually 0:03:29.800 --> 0:03:32.239 the most frustrating part for me when I spend money 0:03:32.280 --> 0:03:35.000 because I didn't plan ahead. And of course, you know, 0:03:35.040 --> 0:03:36.800 I thought about my mom's birthday, thought about what I 0:03:36.800 --> 0:03:39.240 wanted to give her. I love her very much, and 0:03:39.440 --> 0:03:41.720 it was one of those things though where the vessel 0:03:42.040 --> 0:03:44.440 I just I don't know why I felt the need 0:03:44.520 --> 0:03:46.680 to deliver it that way want to, and typically I'm 0:03:46.760 --> 0:03:48.760 kind of anti that, Like I am the guy who 0:03:48.920 --> 0:03:52.080 will make something out of construction paper myself pre kids 0:03:52.160 --> 0:03:54.680 like I will do that. I don't care, Emily, where's 0:03:54.680 --> 0:03:58.240 the construction paper? I told the markers, I totally used 0:03:58.240 --> 0:03:59.920 to do that. I don't care. Man, Yeah, I don't know. 0:04:00.120 --> 0:04:01.560 Just was one of those things that I I ended up doing, 0:04:01.560 --> 0:04:03.120 and I kind of beat myself up a little bit. 0:04:03.120 --> 0:04:05.240 I think it's totally fine to switch things up, you know, 0:04:05.320 --> 0:04:07.240 like that's something you've done in the past, but you know, 0:04:07.280 --> 0:04:09.600 it kind of makes it when you do by quote 0:04:09.680 --> 0:04:12.440 unquote fancy card, makes it a little more special. And 0:04:12.480 --> 0:04:14.200 on top of that, you're spending it on somebody else, 0:04:14.240 --> 0:04:15.800 And so I tend to feel a little more freedom 0:04:15.800 --> 0:04:17.960 when it comes to spending money on other people. You're 0:04:17.960 --> 0:04:20.200 being a little more altruistic. You're giving that away to 0:04:20.200 --> 0:04:22.440 somebody else. You know, it doesn't necessarily need to be 0:04:22.520 --> 0:04:25.039 the very best deal, because the fact is, like you 0:04:25.080 --> 0:04:27.560 are paying for something. You're paying for a tar J card, 0:04:27.720 --> 0:04:29.560 and I'm guessing those cards might be a little bit 0:04:29.600 --> 0:04:32.440 faancier than than the cards that a traitor Joe's. So 0:04:32.480 --> 0:04:33.960 even though it may not be something like that you 0:04:34.040 --> 0:04:35.920 normally would have done, I think it's I think it's 0:04:35.920 --> 0:04:38.080 totally fine, okay, all right, good, good to know. I'm 0:04:38.080 --> 0:04:40.640 glad you're not kicking me aside from my post as 0:04:40.640 --> 0:04:41.960 the co host of this No, no no, no, you're not 0:04:42.000 --> 0:04:44.000 on my list now for for people who have done 0:04:44.040 --> 0:04:46.680 poor things for their Okay, that's good to know. All right. Well, 0:04:46.720 --> 0:04:48.440 let's Matt mentioned the beer that we're gonna have on 0:04:48.440 --> 0:04:51.520 this episode. This one's called You Who Enter Here, and 0:04:51.560 --> 0:04:54.840 this is an Imperial stout by an awesome brewery right 0:04:54.839 --> 0:04:57.880 down the street from us called Orpheous Brewing. So specifically, man, 0:04:57.920 --> 0:05:00.880 this beer is a very special stat This isn't any 0:05:01.080 --> 0:05:02.760 ordinary stout. But we're not going to get into all 0:05:02.800 --> 0:05:04.840 that now. Well, we'll share our tasting notes and our 0:05:04.880 --> 0:05:07.120 thoughts about this beer at the end of the episode. 0:05:07.200 --> 0:05:09.560 That's right, all right, Matt, Let's get onto the subject 0:05:09.600 --> 0:05:13.240 at hand we're talking about. We'll talk about net worth exactly. 0:05:13.520 --> 0:05:15.480 So the big question of the day is what are 0:05:15.520 --> 0:05:17.720 you worth? And what is your net worth? And net 0:05:17.760 --> 0:05:20.719 worth is a really important measurement of your financial health, 0:05:21.400 --> 0:05:24.160 but you might not have any idea what yours is 0:05:24.480 --> 0:05:26.839 your monthly budget? Well, we've talked about that a lot. 0:05:26.920 --> 0:05:30.160 It's a great snapshot and it actually massively influences your 0:05:30.200 --> 0:05:32.839 net worth because the more you grow the gap between 0:05:32.880 --> 0:05:35.480 your monthly income and your expenses, the more you'll have 0:05:35.560 --> 0:05:38.920 additional money to grow that net worth through saving and investing. 0:05:39.160 --> 0:05:41.119 So I think of budgeting as an amongst the trees 0:05:41.200 --> 0:05:43.840 you while net worth is taking that helicopter ride up 0:05:43.839 --> 0:05:46.320 to get a view of the entire forest. And both 0:05:46.320 --> 0:05:49.240 perspectives are super helpful for anyone who's striving to get 0:05:49.240 --> 0:05:52.400 their finances in order and build wealth. But knowing your 0:05:52.440 --> 0:05:54.719 net worth and knowing how to figure it out and 0:05:54.760 --> 0:05:57.720 then how that factors into how you feel about your 0:05:57.760 --> 0:06:01.720 financial progress is something really important to look at. That's right, man, Essentially, 0:06:01.839 --> 0:06:03.960 net worth like it's a marker of how well you're 0:06:03.960 --> 0:06:07.240 doing specifically financially. You know, like there are going to 0:06:07.320 --> 0:06:09.720 be ups and downs, right depending on how long you've 0:06:09.760 --> 0:06:11.920 been investing. Your net worth might have taken a really 0:06:11.920 --> 0:06:15.120 big hit in March back when the markets declined, but 0:06:15.160 --> 0:06:17.080 if you held on tight like you've likely seen it 0:06:17.160 --> 0:06:20.200 rebound and even surpass maybe where it was before the pandemic. 0:06:20.279 --> 0:06:21.839 But the thing is, when it comes to making smart 0:06:21.880 --> 0:06:23.960 moves with our money, one of the biggest problems is 0:06:24.000 --> 0:06:26.719 that it can just be really difficult to measure or 0:06:26.839 --> 0:06:29.200 judge how well we're doing financially. You know, we talk 0:06:29.240 --> 0:06:31.599 about a lot of different numbers on the show. Personal 0:06:31.600 --> 0:06:33.640 finance can be really confusing, man, And because of this, 0:06:33.920 --> 0:06:37.160 we oftentimes will look outward to things that signal that 0:06:37.240 --> 0:06:38.960 we are doing well, you know. And so I'm talking 0:06:38.960 --> 0:06:41.640 about the things that we buy our home cars, like 0:06:41.680 --> 0:06:43.919 cell phones, and just like the things that we have 0:06:44.000 --> 0:06:47.520 delivered to our front doors. These things are terrible indicators 0:06:47.560 --> 0:06:50.120 as to how we're doing financially, but they're often the 0:06:50.200 --> 0:06:52.960 things that, you know, they catch your eye, and it's 0:06:53.000 --> 0:06:55.839 how we Unfortunately, you know, we'll compare ourselves to others 0:06:55.880 --> 0:06:58.240 as well, and we all know how others how they 0:06:58.240 --> 0:07:01.880 can have an impact on our perception of how we're doing. Yeah, 0:07:01.960 --> 0:07:04.719 and that perception informs so much of how we feel 0:07:05.160 --> 0:07:08.640 about our progress. And another I think in effective way 0:07:08.720 --> 0:07:11.360 for us to measure how we're doing is by one 0:07:11.400 --> 0:07:14.720 other specific number. We consider our salary or our last 0:07:14.760 --> 0:07:18.880 paycheck as being the marker of how well we're doing financially. 0:07:18.920 --> 0:07:21.160 If we make a good income, if that paycheck is 0:07:21.200 --> 0:07:24.320 big every two weeks, then we feel good about where 0:07:24.360 --> 0:07:26.920 we are in in regards to our standing with money. 0:07:27.160 --> 0:07:29.160 But we're talking about net worth and that is a 0:07:29.280 --> 0:07:33.040 much more important factor than just your salary or your income. 0:07:33.280 --> 0:07:35.480 It's a much better barometer of how you're doing. And 0:07:35.520 --> 0:07:37.000 I think if you if you do well, if you 0:07:37.040 --> 0:07:40.440 make a decent salary, it can be attractive to two 0:07:40.480 --> 0:07:44.320 people like software engineers, doctors, or lawyers maybe to consider 0:07:44.520 --> 0:07:47.000 their income as one of the major representatives of how 0:07:47.000 --> 0:07:49.920 they're doing financially. But it doesn't matter how big your 0:07:49.960 --> 0:07:52.240 income is if you're spending it all every month, and 0:07:52.280 --> 0:07:54.920 if you're only looking at income and you're not looking 0:07:54.960 --> 0:07:57.760 at your expenses, then you're only seeing a part of 0:07:57.760 --> 0:08:00.960 the equation. And so compared to buying that others can see, 0:08:01.160 --> 0:08:03.560 our salary is a bit more private, but unfortunately it's 0:08:03.560 --> 0:08:05.480 still a measure we tend to hang our hat on, 0:08:05.960 --> 0:08:08.080 and we think that net worth gives you a kind 0:08:08.080 --> 0:08:11.160 of a more balanced approach to seeing how you're actually 0:08:11.160 --> 0:08:13.120 doing when it comes to your money. Yeah, both of 0:08:13.160 --> 0:08:14.920 these things, right, your salary and what it is you 0:08:14.960 --> 0:08:17.440 spend your money on. Both of these things are relative, 0:08:17.480 --> 0:08:20.560 and so because of that, they are their poor measures 0:08:20.560 --> 0:08:23.800 of how well we actually are doing financially, so obviously, yeah, 0:08:23.800 --> 0:08:25.960 this is where net worth comes in handy and why 0:08:25.960 --> 0:08:28.680 it's so important. It's just a great snapshot to to 0:08:28.760 --> 0:08:33.080 quickly visualize how our overall finances are doing, you know. 0:08:33.160 --> 0:08:36.200 Unlike relying on salary, which only focuses on your income, 0:08:36.640 --> 0:08:38.920 or just relying on buying stuff right, which only focuses 0:08:39.000 --> 0:08:42.200 on some of our expenses. Net worth looks at the 0:08:42.360 --> 0:08:44.959 entire picture and is able to give you cold, hard 0:08:45.040 --> 0:08:47.120 numbers that that tell you like it is, part of 0:08:47.160 --> 0:08:50.959 net worth strength lies in the fact that it's consistent. Uh, 0:08:51.000 --> 0:08:54.040 it's unbiased, you know, it doesn't fluctuate with our emotions. 0:08:54.360 --> 0:08:56.680 We're human and and so that's why it's good for 0:08:56.760 --> 0:09:00.000 us to let data to allow that the proper numbers 0:09:00.240 --> 0:09:02.760 to inform how we're actually doing when it comes to 0:09:02.800 --> 0:09:04.960 our personal finances. And then on top of that too, 0:09:05.000 --> 0:09:06.400 it can also be great when it comes to to 0:09:06.520 --> 0:09:09.280 goal setting. Since you know your net worth, it is 0:09:09.400 --> 0:09:12.000 so easily measured. So yeah, just after the break will 0:09:12.000 --> 0:09:13.840 cover how to track it and how to grow it. 0:09:14.080 --> 0:09:16.080 And of course Matt and I we believe that your 0:09:16.120 --> 0:09:18.719 net worth is important. We've been talking about why it's 0:09:18.720 --> 0:09:22.160 an important gauge. But it also has its shortcomings and 0:09:22.200 --> 0:09:34.400 we'll discuss those things too. Right after this all, Joe, 0:09:34.440 --> 0:09:36.720 we'll back from the break. We're talking about net worth 0:09:37.320 --> 0:09:39.880 and why it's such an important thing, and it is, 0:09:39.920 --> 0:09:42.080 like you said, it's very important for us to detract 0:09:42.080 --> 0:09:44.480 our net worth. It's a very helpful number. But the 0:09:44.520 --> 0:09:46.920 thing is, it's not perfect, you know. It does fall 0:09:46.960 --> 0:09:49.400 short depending on what's going on in the market. Uh, 0:09:49.480 --> 0:09:52.120 your net worth, it can have big ups and downs. 0:09:52.400 --> 0:09:54.240 So for example, I'm thinking, if you bought a home 0:09:54.760 --> 0:09:56.680 in two thousand and six and you still own it 0:09:56.760 --> 0:09:59.520 today for close to a decade, owning that home likely 0:09:59.559 --> 0:10:03.160 didn't not improve your net worth as the value plummeted 0:10:03.480 --> 0:10:06.320 and slowly then begin to to rise in the coming years, 0:10:06.760 --> 0:10:08.680 and so from one year to the next, depending on 0:10:08.679 --> 0:10:11.040 on how your money is allocated. Net Worth isn't the 0:10:11.080 --> 0:10:14.600 best benchmark of how you are actually doing, you know, 0:10:14.679 --> 0:10:18.680 especially considering all the other areas of our lives that 0:10:18.760 --> 0:10:21.400 are arguably even more important than you know, how much 0:10:21.400 --> 0:10:23.800 we're worth. Yeah, your net worth isn't the end all 0:10:23.840 --> 0:10:26.480 be all. It doesn't dictate your level of happiness, right. 0:10:26.920 --> 0:10:29.640 Sometimes the people with the highest net worths are actually 0:10:29.640 --> 0:10:32.640 the unhappiest among us, and vice versa can be true. 0:10:32.880 --> 0:10:36.400 People with very little net worth can find so much 0:10:36.480 --> 0:10:39.240 value in the most important things in life, which are 0:10:39.280 --> 0:10:42.400 typically people and how you spend your time. And you 0:10:42.440 --> 0:10:44.800 don't need a high net worth in order to enjoy 0:10:44.880 --> 0:10:47.439 those finer and cheaper things in life, right, like spending 0:10:47.480 --> 0:10:50.400 time with your friends, going on a family hike, the 0:10:50.400 --> 0:10:53.480 occasional fine craft beer, while that one bottle, like all 0:10:53.480 --> 0:10:56.760 those things, that one bottle might be kind of expensive, 0:10:56.960 --> 0:10:59.679 but it's not ridiculously expensive. And even a lot of 0:10:59.720 --> 0:11:02.360 people a very little means can afford a nice beer 0:11:02.400 --> 0:11:05.000 from time to time. So while we're talking about the 0:11:05.000 --> 0:11:07.520 importance of net worth as a measuring stick in this episode, 0:11:07.760 --> 0:11:11.280 remember the other important non financial measuring sticks to the 0:11:11.320 --> 0:11:13.760 title of this episode is what are you worth? And 0:11:13.800 --> 0:11:16.160 the answer, in part at least, is that you're not 0:11:16.280 --> 0:11:18.480 worth what your net worth is. And while it is 0:11:18.480 --> 0:11:21.240 a good barometer, that doesn't directly inform the value of 0:11:21.240 --> 0:11:23.120 your life and and how much fun and joy you 0:11:23.120 --> 0:11:25.280 can have. Yeah, there are lots of other aspects of life, 0:11:25.360 --> 0:11:28.400 right I'm thinking of like quality relationships. I'm thinking of 0:11:28.640 --> 0:11:30.840 the ability to to kind of manage our own time 0:11:30.920 --> 0:11:33.480 if you have like time, freedom and like meaningful work, Like, 0:11:33.520 --> 0:11:35.640 there are so many different ways that we need to 0:11:35.720 --> 0:11:38.400 keep in mind. All those things lead to more balance 0:11:38.440 --> 0:11:40.800 and happiness in our lives. So we're saying that because 0:11:40.800 --> 0:11:42.720 we want to make sure that we couch this episode 0:11:42.720 --> 0:11:44.320 a little bit and you know, the things that are 0:11:44.360 --> 0:11:46.720 a little more important. But that being said, let's kind 0:11:46.720 --> 0:11:49.440 of move forward now with you know, money, Like, that's 0:11:49.480 --> 0:11:51.800 what we talk about on the show. We've been talking 0:11:51.840 --> 0:11:55.280 about net worth, why it's important, why it's not overly important, 0:11:55.400 --> 0:11:57.360 but let's get a little more practical with it. Let's 0:11:57.400 --> 0:12:00.120 talk about how you can determine your net worth. A 0:12:00.120 --> 0:12:02.040 lot of folks out there probably wondering how you can 0:12:02.080 --> 0:12:04.320 figure the darn thing out. And the simple formula is 0:12:04.360 --> 0:12:07.679 you take your assets owned minus your debts owed. Your 0:12:07.720 --> 0:12:10.560 debts are your liabilities owed. So on the asset side, 0:12:10.600 --> 0:12:12.960 you know, you'll take ato account your your savings, different 0:12:12.960 --> 0:12:15.920 investments you have, the value of your home or maybe 0:12:15.920 --> 0:12:19.520 a business you own, basically anything that has significant value. 0:12:19.960 --> 0:12:21.760 And then on the debt side, you want to include 0:12:21.760 --> 0:12:25.960 car notes, mortgage balances, student loans, credit cards, basically anytime 0:12:26.000 --> 0:12:28.920 you have payments, especially ones that are recurring payments. These 0:12:28.920 --> 0:12:32.160 are all examples of liabilities. All right, question for a friend, then, Matt, 0:12:32.440 --> 0:12:35.760 does their beanie baby collection count in their net worth? Like? 0:12:36.000 --> 0:12:38.360 Is that something that's valuable enough to count? That's actually 0:12:38.360 --> 0:12:40.400 a good question because I think it would depend on 0:12:40.520 --> 0:12:44.520 how valuable that odd thing that they have is, you know, 0:12:44.640 --> 0:12:47.080 because I mean the short answer what you're looking for 0:12:47.200 --> 0:12:49.400 is no, like that doesn't really count. Like these are small, 0:12:49.600 --> 0:12:52.679 insignificant things that we own. Maybe your collection is that's 0:12:52.679 --> 0:12:54.360 the thing, Like, there might be somebody who owns something 0:12:54.400 --> 0:12:56.840 like that's really really valuable in the thousands of dollars. 0:12:56.840 --> 0:12:59.240 And so if you own something that is worth I 0:12:59.240 --> 0:13:02.360 would say over five or ten dollars, I think that's 0:13:02.360 --> 0:13:04.880 when I at least would start including that when I'm 0:13:04.920 --> 0:13:06.880 calculating my net worth. Yeah, if you can hop on 0:13:06.920 --> 0:13:09.200 eBay and tell your meanie babies for five grand tomorrow, 0:13:09.240 --> 0:13:11.800 then count them in your network. That's an asset exactly. 0:13:12.000 --> 0:13:13.959 But I mean that being said, so the way we're 0:13:13.960 --> 0:13:16.880 talking about determining your net worth here like is by 0:13:16.920 --> 0:13:19.439 doing it by hand. And while that is actually a 0:13:19.480 --> 0:13:22.240 pretty simple formula, it's not the easiest way, so they're 0:13:22.240 --> 0:13:24.400 actually better, faster ways to do it, and so that's 0:13:24.400 --> 0:13:26.360 what we're gonna talk about next. Yeah, totally. I love 0:13:26.600 --> 0:13:29.000 kind of having some help in that regard, and it 0:13:29.080 --> 0:13:30.920 just makes me think of why I had to learn 0:13:31.000 --> 0:13:33.480 certain kinds of math when there were calculators that I 0:13:33.480 --> 0:13:35.960 could use. And the same thing holds is that, like, 0:13:36.040 --> 0:13:39.239 you don't necessarily have to figure out how to continually 0:13:39.280 --> 0:13:41.880 update your net worth by hand when you can use 0:13:42.200 --> 0:13:44.240 some sort of software that's gonna help you do that. 0:13:44.280 --> 0:13:47.000 On the rag and Matt, I've been using Mint for 0:13:47.040 --> 0:13:49.760 a long time now, and while it doesn't have any 0:13:49.840 --> 0:13:51.959 of the features that a service like wine app has, 0:13:52.040 --> 0:13:55.280 which is specifically trying to help people budget, Mint is 0:13:55.360 --> 0:13:58.480 great for we're tracking what you have spent, and it 0:13:58.520 --> 0:14:01.800 helps you keep up with your overall assets and liabilities 0:14:02.280 --> 0:14:04.440 and and so in that regard, it helps you stay 0:14:04.480 --> 0:14:06.000 up to speed on your net worth. If you look 0:14:06.160 --> 0:14:08.120 on the left hand side when you log into Mint, 0:14:08.160 --> 0:14:10.120 if you have a Mint account, you can get a 0:14:10.160 --> 0:14:13.120 real handy snapshot of your net worth on all of 0:14:13.160 --> 0:14:16.160 your pertinent accounts as you plug into log in information 0:14:16.320 --> 0:14:19.840 for your bank accounts for your investment accounts and you 0:14:20.040 --> 0:14:22.920 list what sort of car you own and properties you own. 0:14:23.000 --> 0:14:26.520 It will keep an updated tab of exactly where you're 0:14:26.560 --> 0:14:28.040 at when it comes to your net worth, and I 0:14:28.080 --> 0:14:30.600 like being able to see that snapshot on the RAG 0:14:30.880 --> 0:14:33.240 when I log in. It's one of my favorite things 0:14:33.280 --> 0:14:36.000 about using Mint for sure. Nice man, you know, actually 0:14:36.120 --> 0:14:38.200 meant was the first time I saw my net worth? 0:14:38.240 --> 0:14:39.760 You know, like back in the day, I had entered 0:14:39.800 --> 0:14:41.680 in all my accounts, kind of linked up my accounts, 0:14:41.920 --> 0:14:43.480 and that was the first time I kind of was 0:14:43.600 --> 0:14:45.400 aware of the fact that, like, oh yeah, I guess 0:14:45.400 --> 0:14:47.480 net worth is something that is good to start tracking. 0:14:47.800 --> 0:14:50.560 But recently I've been using Personal Capital, you know, so 0:14:50.680 --> 0:14:52.480 like Mint, you can see an up to date figure 0:14:52.640 --> 0:14:54.920 of your net worth without having to do a bunch 0:14:54.960 --> 0:14:57.680 of math by hand, but Personal Capital leans a little 0:14:57.720 --> 0:15:00.520 more into the investing side of things that Mint does. 0:15:01.120 --> 0:15:03.720 One of the things I love about Personal Capital is 0:15:03.760 --> 0:15:06.640 that it's got this thing called a you Index, which 0:15:06.680 --> 0:15:09.800 is essentially how your net worth is performing over time. 0:15:10.000 --> 0:15:12.800 They're able to combine all of your investment holdings into 0:15:12.880 --> 0:15:15.720 a single number, and then you can track that along 0:15:16.240 --> 0:15:18.760 uh and compare it with other indexes like the SMP 0:15:18.840 --> 0:15:22.160 five hundred and so you essentially can see how your 0:15:22.400 --> 0:15:24.760 you know you index, like how you are doing compared 0:15:24.800 --> 0:15:27.240 to the overall market are depending on whichever index you 0:15:27.240 --> 0:15:29.200 want to follow. So, man, I found that to be 0:15:29.280 --> 0:15:31.240 really stinking cool. And a lot of folks have not 0:15:31.400 --> 0:15:34.000 heard of personal capital before. I actually just wrote a 0:15:34.040 --> 0:15:36.480 review up on our website there at how too many 0:15:36.520 --> 0:15:38.080 dot com and we'll make sure that we linked to 0:15:38.120 --> 0:15:40.600 it in our show notes for this episode. So much 0:15:40.640 --> 0:15:42.600 better than like a stone tablet and a chisel, like 0:15:42.800 --> 0:15:44.920 keeping your net worth Like that not the way to 0:15:44.920 --> 0:15:47.160 do it. I prefer Papyrus. Do you know your love 0:15:47.240 --> 0:15:50.200 for ancient Egyptian history is coming out right now? Well? 0:15:50.240 --> 0:15:54.960 I do like history and crappy typefaces, all right. Well, 0:15:55.160 --> 0:15:57.240 so now that we know, maybe the designer side of 0:15:57.240 --> 0:15:59.440 me coming up. Yeah, I mean you know about Pappy, 0:15:59.480 --> 0:16:02.480 about Papa IRUs, I mean, is that is that actually 0:16:02.480 --> 0:16:04.520 a type font? Yeah? I didn't know that. It's it's 0:16:04.560 --> 0:16:06.640 like this, yeah, dude, I know, like times, Doon, Roman 0:16:06.640 --> 0:16:08.960 and aerial, that's all I know. Sorry. And Helvetica here 0:16:08.960 --> 0:16:10.840 A lot of designers like that one, right, Yeah, Hevetica 0:16:10.880 --> 0:16:12.720 is a great one. But Papyrus is like this one 0:16:12.760 --> 0:16:14.800 that's known. It's kind of got this cult following of 0:16:14.840 --> 0:16:18.040 people because so many individuals use it to like when 0:16:18.040 --> 0:16:20.120 they're making like their own business card or they're making 0:16:20.120 --> 0:16:21.960 their own sign or something like that. A lot of 0:16:22.000 --> 0:16:23.720 graphic designers like to make fun of it, because a 0:16:23.720 --> 0:16:26.200 lot of non designers love to use it because it 0:16:26.240 --> 0:16:30.040 looks fun, it looks interesting. Uh, and so it gets 0:16:30.080 --> 0:16:32.040 a bad rat because of that. All right, Yeah, if 0:16:32.080 --> 0:16:35.160 the late person is using it and the professionals not, 0:16:35.320 --> 0:16:37.880 I can understand that. All right, Well, let's talk about 0:16:37.880 --> 0:16:40.160 to Matt. Obviously, if you're using one of those services 0:16:40.160 --> 0:16:42.440 to help you track your net worth, that's gonna be 0:16:42.560 --> 0:16:45.960 really nice. It's gonna come in handy. But evaluating what 0:16:46.000 --> 0:16:48.960 you're seeing then is really important. It would be ideal, 0:16:49.000 --> 0:16:51.640 of course, to see your net worth grow every single month, 0:16:52.040 --> 0:16:55.360 but market shift and you will see fluctuation. And so 0:16:55.440 --> 0:16:57.800 as long as you're consistently saving more of your income 0:16:57.800 --> 0:17:00.560 and investing it wisely while at the same time avoiding 0:17:00.680 --> 0:17:03.840 unhelpful debt, that number will grow. It's just not going 0:17:03.920 --> 0:17:07.720 to be like consistently up into the right trajectory, right 0:17:07.840 --> 0:17:09.360 and I think for those of us who are maybe 0:17:09.440 --> 0:17:12.400 a little more anal retentive when it comes to following 0:17:12.400 --> 0:17:15.080 our net worth and tracking it, we might get bummed 0:17:15.320 --> 0:17:17.920 with the market has a temper centrop in a month 0:17:18.240 --> 0:17:21.400 and we're like, man, my net worst down. That's not cool. Um. 0:17:21.440 --> 0:17:23.720 But yeah, like we said, net worth is a helpful 0:17:23.800 --> 0:17:26.680 measuring stick, but it's not perfect. And so yeah, when 0:17:26.760 --> 0:17:30.040 those markets do shift and when our net worth takes 0:17:30.040 --> 0:17:32.600 a hit, that shouldn't be a hit to our confidence 0:17:32.880 --> 0:17:34.520 or make us feel like we're not doing it right. 0:17:34.680 --> 0:17:37.040 That's just kind of part of how things go as 0:17:37.080 --> 0:17:39.240 we're building wealth for the future, that's right, man. And 0:17:39.240 --> 0:17:41.199 the thing is too, I mean over the course of 0:17:41.280 --> 0:17:43.680 years right over, Like when you zoom out, you do 0:17:43.800 --> 0:17:45.760 want to see your net worth going up over time 0:17:45.960 --> 0:17:47.840 if you are seeing it kind of instead of going 0:17:47.920 --> 0:17:49.800 up into the right, if you're seeing it going down 0:17:49.800 --> 0:17:52.080 into the right, like, that's that's a bad sign cause 0:17:52.160 --> 0:17:54.159 for concern exactly. But I mean, I think a lot 0:17:54.200 --> 0:17:56.159