Comments on: Is Net Worth the Wrong Metric to Track?

By: Zach

Zach — Sat, 03 Nov 2018 01:51:21 +0000

In reply to { in·deed·a·bly }. Agreed with you - both elements serve a purpose. Thanks for the feedback, indeedably!

By: Zach

Zach — Sat, 03 Nov 2018 01:48:33 +0000

In reply to Lin.

Very cool to hear that you’re also in the middle of reading Atomic Habits, Lin! It’s a fantastic book. And agreed with you – focus on the daily, tiny habits and the larger goals naturally take care of themselves.

By: Zach

Zach — Sat, 03 Nov 2018 01:47:48 +0000

In reply to MsTJ. Haha I love that you note "It wasn't my fault", because some months that's simply true. You can't control how the market behaves. Thanks for the feedback!

By: Zach

Zach — Sat, 03 Nov 2018 01:46:57 +0000

In reply to RE@54. Awesome to hear, RE@54. That just shows how important habits truly are.

By: Zach

Zach — Sat, 03 Nov 2018 01:46:23 +0000

In reply to Ed Mills.

Completely agreed – I focus on keeping my system running smooth. Awesome to hear that you do the same 🙂

By: Zach

Zach — Sat, 03 Nov 2018 01:45:53 +0000

In reply to Ellen. Hey Ellen, I automatically reinvest any dividends. Whether you automatically reinvest or manually reinvest, you'll pay the same amount in taxes.

By: { in·deed·a·bly }

{ in·deed·a·bly } — Fri, 02 Nov 2018 10:15:10 +0000

Goals are important, as they help define the “what”. Without a tangible means of achieving them however, a goal is just an empty pipe dream.

Strategy is important, as it defines the “how”. Without tangibly defining where the goal posts are, there is no way to determine the effectiveness of the activities or actions being undertaken in pursuit of that goal.

Net worth is simply a means of keeping score, charting progress towards a goal. However just monitoring it alone won’t achieve the desired goal, because monitoring isn’t the same as doing.

The framework approach you outline implements a strategy geared towards achieving your goals, it leads to tangible actions being taken. The net worth tracking monitors your progress.

Both elements are important. Neither can succeed without the other.

By: Lin

Lin — Wed, 31 Oct 2018 15:15:12 +0000

I had a feeling you’d be reading this excellent book, Zach! You seem to already have mastered the power of good habits. I’m reading it right now, too, and I love it.

I agree in the power of tracking behaviors and systems rather than goals (except to check in periodically and make tweaks to the systems if of course). Big goals can actually become paralyzing. Focusing on the daily, weekly, quarterly is so much more doable.

By: MsTJ

MsTJ — Tue, 30 Oct 2018 18:39:06 +0000

After this past month, I understand why you would want to track something other than “Net Worth.” My portfolio is also down more than I normally save in a month so it’s down for this month. I normally also track my spending vs income but mostly I look at my “Net Worth” report for my over all score. This month doesn’t look so pretty. I figure it makes up for the months when my net worth was up, mostly because of market gains.

I found the below picture on another site, unfortunately I didn’t include where I found it.
https://s3-us-west-2.amazonaws.com/media.forumbee.com/i/072f73c6-7339-420e-b558-bc5a7e2b45fc/h/547.jpg
To me, this is just one of those down months, where I didn’t have any control. They happen. I just fill up my report with notes to say “It wasn’t my fault.”

Believe you are on the right track to focus on process. Tracking spending seems like a good alternative when the markets are down.

By: RE@54

RE@54 — Tue, 30 Oct 2018 17:19:50 +0000

We never had a goal to save $1M. We paid off the house in eight years, paid off cars and drove them for a long time, opened IRA and 401K, saved and invested. We just did the pieces to eliminate debt and grow our savings. We knew what $ amount was in each account, but we never added it all up to new worth until early last year. It was $1.8M, not including the house. This all in 20 years. We were focused on the pieces with no clear goal and it still happened. Our habits are still there, we haven’t changed a thing.