Tracking Our Net Worth Since 1985

We have been tracking our net worth since 1988 when I was making $18,000 a year.  That would be close to the poverty line today but I thought I was rich.  Not sure when we started using Quicken but prior to that it was just an early spreadsheets.  Let’s put it this way, I still have dot matrix print outs of our net worth.  The calculation is simple; Assets minus liabilities.  Here is an image of our Net Worth from

Net Worth Chart
If you look close the green is the past performance while the gray is the predicted future.  It is interesting that if you look close you can see the life events that had a positive and a negative impact.  I can see where I got married and took on student loan debt.  I see the Financial Crises and when we bought our last home.  It’s all there hidden behind the numbers.  The two most important factors that may seem obvious but are worth discussing.  First, tracking net worth is a very powerful activity.  As they say, what gets measured gets done.  Second, time is your friend.  The earlier you start saving and tracking the better you will be.  Early makes up for stupid all day long.  You can make poor decisions and get away with them if you start early enough.  Time will erase all of your investment mistakes.

Each year, we set a goal of 5% growth with our Net Worth which doesn’t sound like a big goal until you get to the higher levels of valuation.  The reality is that we make that goal about 75% of the years.  Keep mind, we don’t care how that goal is reached so the 5% is not a rate of return.  The market could go down but the off set in real estate values or contributions.  These items could still provide a positive growth rate in the end of year calculation.  The average growth rate is about 17.6% but again, this includes contributions, retirement savings, property, etc.  This rate equates to about $90,000 growth per year.  Clearly, the later years are far better due to the size of the investments.

Sound daunting?  We could never get to that level?  I know, we said the same things back in 1988.

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