Look forward to your post on the wealth calculator (I can’t find my darn social security statement).

I do track my net worth, but only use investable assets that do not include my primary residence.

@pfodyssey – thanks for your thoughts – I have actually seen other pf bloggers discussing whether or not to put the value of their furniture in their networth calculation, but anyway I agree most people include investments, checking/savings, and real estate.

I guess my biggest issue is that you always need a place to live and unless your current house appreciates faster than your next house you aren’t making any real ground UNTIL you downgrade (which may or may not happen) – so to automatically include primary residence Equity into your net worth is a mistake in my opinion. May give you warm fuzzies about your progress when in fact you’ve got an extra $300k on your balance sheet that unless you decide to live on the street you won’t be able to pull it entirely out and use it.

Thanks for the link on the wealth score. I will check that out and do a follow up post.

I guess in the end I tend to be pretty conservative and don’t count any eggs before they hatch. Same reason why I don’t include checking/savings/short-term debt in my calculations because they fluctuate so much and really mean nothing to me long term. Yeah my checking account went up $500 this month, but odds are next month it will go down. Until I actually extract money out and into a long-term vehicle that can’t be spent I don’t count it. I guess whichever method works best for you is the best, regardless I agree that tracking your wealth no matter how you do it is a very useful exercise.

Thank you all for you insightful comments!

* Although there are some differences in how one might go about calculating it, the major ones tend to be whether or not to include your house and maybe your vehicles. Practically speaking, I see hardly anyone (no one in my own experience) tabulating their personal assets (furniture, golf clubs, and the like).

* Including or not including your home as part of your net worth – while I agree that you can never figure out the true price until it’s sold and any estimate can be high or low, I think you can definitely get a strong sense for what your house is likely worth based upon comparable sales in your area. In fact, in many subdivisions (big builders / production housing), there may be many houses almost EXACTLY like the one you already have, so comparison is easy. It’s then up to you to determine how conservative or agressive you want to be relative to those sales (ex: if you think your house is better or not as nice). For myself, I have decided to include it in my net worth calculations and TRY to be conservative about it based upon home sales in my area. Also, I don’t go around changing it every single month unless something significant has happened. In fact, one of our local realtors sends a monthly newsletter with all the home sales for our subdivision – so I don’t even have to do any work to make the comparison.

* Your comment about a potential next house costing 20% more doesn’t really have anything to do with your net worth. The fact you buy a more expensive house does not change what equity you had in your old house…you will just be increasing your liabilities. No matter what, you will still have the equity.

* Agree the CNN Money tool may not be the greatest and not meet your needs for what you are looking for. However, I may have stumbled across something that may be of more interest to you, called the “wealth score”. It basically asks you to look at your lifetime earnings compared to your net worth and suggests where you should be. I haven’t done it yet, but I will. It’s in my most recent post:

http://pfodyssey.wordpress.com/2007/04/25/net-worth-how-am-i-doing/

I would encourage to reconsider net worth as a useful measure. Regardless of how you decide to calculate it, it provides you with a means to measure progress toward your goals. Of course, you are already doing that via your current process (retirement savings), but you may get a more comprehensive view if you consider some of the other things (ie – I don’t know if you also include checking, savings accounts, etc outside of retirement).

If you end up using the wealth score, please let me know if you thought it was useful.

These charts would be mor accurate if they were combined… so they would have a category of $75k-$100k + 25-35. The problem would still be that these ranges are too big. $25 yr old making $75k vs 34 yr old making $100k should not have near as much Net Worth.

I wish that at the very least they would compare you to people your same age WITH your same income. That might be half useful.

You’re right about not wanting to be average. I keep reading everywhere that you need $500,000 to $1,000,000 at retirement, blah blah blah, but the average net worth is only $200,000 even at 55-64 years old.

I agree that a lot of comparative net worth and income statistics are not that meaningful to the individual (for a start they do not take into account personal circumstances.

However I disagree with you on one point: a home is an asset. It may not be one that you would initially look to as part of a retirement plan (although it does have uses in that respect) but it is certainly very much part of a person’s financial net worth. To illustrate the point, consider two people:

Person A: no assets, no liabilities – net worth of zero

Person B: owns a home but has no other assets of liabilities

Which has the higher net worth? If you view your home as a liability then Person B is worse off than Person A which is obviously not true (unless the home is a toxic waste dump).