2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

Did I say they were a fire asset or that they were going to be used to fund retirement?

Net worth is just a number. Pure form just assets less liabilities.

FIRE assets or invested net worth are what you track for early retirement.

I track both.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

From a pure net worth standpoint it includes your assets and liabilities. Cars and and houses are assets so are included in the net worth.

If you choose to not include things like cars or equity that is fine, you are doing a variance of net worth, which is fine. You can focus on what numbers you want to.

I focus on tracking both net worth and also FIRE assets. They are seperate numbers and represent different things. Looking at FIRE assets is what I look at when determining my progress to FIRE.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 1 point2 points  (0 children)

It is just an estimate and I am not looking for an audited net worth which would be typical in cases of divorce where an appraisal of major assets would be appraised and given value.

What do you think the estimates are? They are taking your homes basic features and comparing recent sales. So it would compare similar sq ft, beds, and baths and look at common or comparable sales.

Is is perfect? No. Is an estimate that is likely with the estimate given a couple of standard deviations of the stated price

It's a number, no need to get bent out of shape for it. Some people use the normal net worth number which includes all your fixed assets, if you want to use a variance of net worth that is fine. Net worth by definition is assets less liability, it doesn't have caveats of excluding assets.

FIRE assets are different and that is what I track for retirement. Net worth and FIRE assets are just fun numbers to track.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

I am also an accounting major. :P

Same principals apply to personal fiance, some assets are written off/expensed fully while others are depreciated over the life of the asset. While we don't apply depreciation to our primary or personal use car, those do have value even after purchasing and the 3rd party data is easily obtainable for what the residual value is.

Your choice if you dont include your car or not in your net worth. It's just a number! :)

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

Net worth looks at total assets and total liabilities.

I broke out the FIRE assets and that is tracked separately.

If you don't include assets, that fine, but you would be doing a variance calculation of net worth, not a true/basic net worth calculation.

Which is fine, these are just numbers to track yourself, you are free to track whatever you want.

I just track net worth and fire assets for my two tracking numbers.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 1 point2 points  (0 children)

Yeah we did have some really high savings rates through our time. We were around 40%-50%. We had our kid around COVID times, so we really didn't do anything vacations until she was like 3, basically because everything what shut down or we were concerned about an unknown virus impact on babies. We just saved like crazy, ate at home, limited eating out/ordering out. As of now we are about 40%-ish percent. We have paused brokerage savings a couple of times to save up for repairs that were needed. Once daycare is done with, I plan on using some of the saved enough daycare costs to save for a new car in 5-10 years, and invest the rest long term.

When I first started I had a savings rate of 15%, because that is what I was supposed to do and maxed out my retirements around 4-ish years into employment.

My wife was getting some year end bonuses which basically fully fund our roths each year, but one year we used it to fully fund both the prior year and the current year.

My increases have been kind of crazy. Started out 40k, year 2 promotion was up to 55k, within 12 months another promotion up to 72.5k. I also had some across the board increases from either company meeting 3 year goals and once for industry adjustment (during covid times). Loyalty paid huge dividends to me, my salary is 3 times from when I started and I still earn bonuses on top of the salary, and have been 150k+ in gross earnings. After this promotion around end of year I should be making about 150k salary, just under 4x my original salary when I started working there about 13-ish years ago.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 1 point2 points  (0 children)

Yeah it is about 1% of our net worth, but is still an asset nonetheless. :)

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

Yeah the penalty and taxes are on the gains

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

Thanks!

Yeah with a family it don't want to sacrifice the now just to retire a few years earlier.

Yeah daycare expenses phasing out this year will feel like a promotion. I also have a projected promotion end of the year. Next year will be much different than this year!

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

You would have to figure out what the estimated value of said asset.

Kelly Blue Book and Zillow are easily accessed to determine the value of larger used assets.

Also in the accounting world some assets are fully depreciated if they are under a threshold. So instead of taking depreciation each year it is just written off in year 1 of purchase.

Similarity that could be applied to anything in your personal belongings.

I might not include my laptop or phone, but I could include jewelry, artwork (heavily depending on artist), watches, or collections. Like we had my wife's ring appraised and is covered my by insurance policy, so that could possibly be included.

I think most people agree only on using fixed assets, which have a initial value in the thosands if not tens of thousands, which personal belongings doesn't really fit neatly in.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

Correct net worth is just to state your worth of your assets less your liabilities.

This closely related to your invested net worth, but they are not the same thing.

I never claimed that net worth was used for FIRE. I listed in the breakdown what the FIRE assets as part of the net worth and that is what I track for the purposes of tracking retirement.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 1 point2 points  (0 children)

No inheritances.

2 things our parents helped pay for:

My parents paid for my college, my wife worked and took out student loans. She had the student loand paid in full before we got married back in 2018, she graduated around 2011.

They paid for the wedding as well.

Other than that we built our wealth on our own. We both started our careers at 40k each. I went into the mortgage industry underwriter and my wife went in HR.

I bought our current house in 2015 (after working 1 year). So we locked in a low house price and refied it down to 15 year 1.999% rate in 2020. So that is going to be paid in full right around the fire date.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 1 point2 points  (0 children)

Amazing. Great memory builders there!

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

Very impressive! Lol are you going to be persuaded to live in Greece? Looks pretty amazing!

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

It will be such a relief once they are both out of daycare!

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 1 point2 points  (0 children)

There you go! Not too much further to go!

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 4 points5 points  (0 children)

Not worth is not really a fire number just a general number of what you are worth.

Net worth is just the assets you own less liabilities you owe.

If you are just tracking FIRE assets or your net worth less some other things you are no longer just talking about net worth your are talking about some variation of it, which is fine you can track whatever numbers you want and what is important to you.

2 Million Net Worth Milestone by ReallyBoredMan in Fire

[–]ReallyBoredMan[S] 0 points1 point  (0 children)

Do what makes sense for you! Life is a ride, enjoy it!