Long, long ago, in a house just like this one – oh wait – it was this one. Let me start over. Back when I first had the idea of starting a personal finance blog, I decided to do a quick and dirty analysis of the state of our finances. I quickly added up our assets and subtracted our liabilities. Right! Wrong. Really wrong. Although I added our mortgage debt on our primary residence and our rental property, I failed to factor in the value of those properties in the assets column. This resulted in a negative net worth. Yikes! After doing quite a bit of digging and a (IMO) proper analysis – we are in the BLACK, baby! Phew.
Yes, I said the result was a negative number! I couldn’t believe it. I mean, I knew I had a few difficult years and that I didn’t always make the absolute best financial decisions, but negative? I should not have had a negative net worth at my age. I immediately began reducing expenses and directing more and more income towards investments.
Funny thing, I realized, not too long ago, that I royally screwed up that calculation. I accounted for all of our expenses for sure, I just failed to account for the value of our properties. Oops. Big oops. Good oops.
There are quite a few schools of thought out there on HOW to calculate net worth. Some tell you to include your primary home and others tell you exclude it. The reasons are valid on both sides of the fence. Thankfully, however I calculate it, I have an impressive (to me) amount of net worth…especially after thinking I was in the RED for a long time. Check out the chart below to see where you rank.
Side Note: I’m not quite ready to share my net worth – but that could change in the future.
Median Net Worth Of Americans As Of 2015
Below is a snapshot of the median net worth of American families in 2015, courtesy of www.fool.com. The blue bars represent net worth including primary home value, whereas, the pink represents net worth excluding primary home value. Keep in mind, the values listed in the chart below are demonstrating the median net worth of various age groups in America – the numbers are quite light compared to what one could or should have at at certain ages. I encourage you to read the full article linked in this paragraph.