Net Worth Update 2007

"Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones."

- Benjamin Franklin

I've calculated our net worth at the end of 2007 and appended it to the previous ten years of data I posted last year. I was perhaps hoping for a bit more progress last year, but I'm nonetheless satisfied with the results.

You may also wonder why I only update our net worth statistics once a year, as I've noticed a number of personal finance blog authors provide monthly or even weekly updates. In our case, we have a portfolio consisting primarily of equities, and the total portfolio dollar amount size has grown to dwarf even our yearly savings. Thus, I'm afraid that a monthly net worth update would merely be a reflection of monthly market fluctuations, which I don't think is a useful thing to calculate and post.

Year	Net Worth At Year End
1997	$80,641
1998	$134,135
1999	$224,502
2000	$300,710
2001	$337,281
2002	$401,199
2003	$477,903
2004	$549,144
2005	$684,813
2006	$864,380
2007	$950,346

The Record Thus Far

"Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish."

- John Quincy Adams

I use Quicken to track my finances and I've used it to produce the following 10 year history of my net worth. It is somewhat understated, as I don't include any physical assets except my residence. (I don't include vehicles, household furnishings, jewelry, and so forth - not because they aren't worth anything, but because it's highly unlikely they would ever be sold.) We have no debt except for our mortgage, and of course that is included in the net worth totals.

Year	Net Worth At Year End
1997	$80,641
1998	$134,135
1999	$224,502
2000	$300,710
2001	$337,281
2002	$401,199
2003	$477,903
2004	$549,144
2005	$684,813
2006	$864,380

For the record:

• We did not receive stock options.
  
• We did not own any rental properties.
  
• We did not inherit money.
  
• We did not win the lottery.
  
• We are not employed as managers or executives.
  
• We are not self-employed.
  
• Starting in 2000, we are a one-income family with kids.
  

In short, we're a typical middle class family with a typical middle class lifestyle. Yet we save a lot of money. Saving money is what is mainly responsible for the continual increase in net worth shown in the above table. The rest of the increase came from investment growth. I listed the factors that did not contribute because I wanted to be clear that saving money and increasing net worth is possible even if you aren't a dual-income family or an executive or a business owner.

As I indicated in my first post to this blog, there is no silver bullet to increasing net worth and making early retirement work for me. The track record above is based on very basic principles of saving and investing money, but applied consistently over a long period of time. 10 years is a long time to stick to a budget! I find that once net worth begins to increase significantly, there is a tremendous temptation to alter the original plan and spend a lot of what has been accumulated. This is what all the advertisements and salespeople in life try to entice one to do.

But I am sticking with the plan. I think back and remember why I started down this road. It was not to enjoy big houses and luxury vehicles and leather sofas. It was not about having things. And it was not about prestige. And it was not about security. It was about time -- more time for my wife and kids and other relationships that mean something to me. And it was about the freedom to pursue my own goals in life unshackled from the daily grind of earning a paycheck.

Oh yes, I am sticking with it...