Comments on: net worth or net worthless?

By: ldk

ldk — Tue, 23 Jun 2009 22:26:38 +0000

net worth is relevant as a continuing benchmark for your own purposes…say every 6 months to a year….though using it to compare yourself to others is rarely useful. Risk and the extent of your diversification would eventually reveal themselves though either rapidly growing or shrinking net worth as people who were largely or solely invested in their primary residences have found out. Also, one would assume that assets with positive cash flow would also reveal themselves as that cash flow is used to save, invest or buy other assets…if it is spent on crap then it is irrelevant anyway!

By: ldk

ldk — Tue, 23 Jun 2009 15:26:38 +0000

By: Moneymonk

Moneymonk — Mon, 22 Dec 2008 23:53:56 +0000

I wrote a post close to this a while back.

I just think cash flow is always better than net worth. It is cash flow that will keep you going.

http://www.moneymonk.net/2008/03/net-worth-is-j...

By: Know The Ledge

Know The Ledge — Sun, 23 Mar 2008 01:45:10 +0000

I’ve always struggled with the importance of the net worth number and it’s relevance. It’s definitely all relative, and think that a different calculation based on your level of financial freedom might be more prudent. That could take into account your regional differences as well as give you some practical information to use.

It would be less a figure to compare between you and others, and more a figure to compare between you and yourself, which makes it ultimately more valuable to your financial progress.

By: 7million7years

7million7years — Mon, 03 Mar 2008 23:12:26 +0000

Halleluja Brother! Net Worth don’t mean no hill o’beans because you have to guess at the valuations of all of them little ol’ businesses and investment real-estate that produce all of that sweet cash.

Mah own little ol’ net worth just kept climbin’ and climbin’ as I sold off those little ol’ income-producing assets and businesses to big, fat corporations with deep pockets … suggest y’all do the same using some of the same tricks o’the trade that ah did … c’mon over, pull up a chair, and sit by the fire and ah’ll tell y’all about ‘em …

By: Lazy Man and Money

Lazy Man and Money — Thu, 31 Jan 2008 21:57:55 +0000

I think it has value to the individual which you touched on at the end of the article. It is difficult to understand what it means to other people unless they know the other details that you mentioned.

In my case, I’m pretty open with most of the extra information. People know what I’m invested in (to some degree), how it’s calculated, and where I live.

By: How I keep track of my financial progress « Father sez……

How I keep track of my financial progress « Father sez…… — Sun, 13 Jan 2008 10:55:15 +0000

[...] I keep track of my financial progress Brip Blap recently wrote an interesting piece on why he thinks net worth is not an awfully important metric to know. This article created an active discussion thread with some people [...]

_{»crosslinked«}

By: Steve

Steve — Thu, 10 Jan 2008 02:18:02 +0000

Thanks, JimB. That’s another avenue I didn’t really even get into – that the term “net worth” is being used as a marketing tool to make us feel inadequate. My net worth isn’t as high as Fred’s!! Let’s invest in pork belly futures!

Good point!

By: JimB

JimB — Wed, 09 Jan 2008 16:22:07 +0000

This is a really great post. Too many people use “net worth” to keep score in life and many investment firms use it as a marketing tool. It clearly changes over time depending on which asset classes you are invested in.

By: What’s the Point of Using Net Worth?

What’s the Point of Using Net Worth? — Fri, 04 Jan 2008 13:57:34 +0000

[...] 4th, 2008 · No Comments I read a post just the other day by Brip Blap on whether a net worth was useful to calculate at all. Overall I have to agree with a few of his [...]

By: Steve

Steve — Fri, 04 Jan 2008 11:19:53 +0000

I’m perfectly OK with disagreements with my conclusion. I think my point was more that it doesn’t serve much purpose as a comparative tool, and it depends heavily on factors that aren’t included in the calculation as to whether your net worth is “good” or “bad.”

By: traineeinvestor

traineeinvestor — Fri, 04 Jan 2008 08:06:37 +0000

As interesting as the post is , I’m with moneygardener in respectfully disagreeing with just about everything in the post.

The fact that “net worth”may be measured differently by different people and different amounts may have different relative meanings to different individuals does in no way detract from its usefulness as a personal finance tool. For me, net worth calculation is the primary measure of progress towards my retirement goal (although other measures are also relevant).

By: moneygardener

moneygardener — Fri, 04 Jan 2008 03:11:06 +0000

Here is my rebuttal

(Note from Brip Blap: the URL was too long for the comment format, so I HTMLed it. Still directs to same post).

By: hank

hank — Fri, 04 Jan 2008 02:59:52 +0000

I like it – and agree to a point; but at the same time it has made me very aware of what and where my money is going. I think it can take a huge tangent when you start to say WHAT is defined in it. If you keep it simple, I think Flexo might have mentioned it months ago in a post I read, net worth is what you’re worth if you had to sell everything you own right this minute. If you did, how much money would you have?

For me it is more of a bookmark on my financial “novel”…

By: moneygardener

moneygardener — Fri, 04 Jan 2008 01:58:05 +0000

Great post…. but I disagree with almost every argument you’ve made.

I will endeavour to post about this on my blog in the next week or so..