In honor of my husband and me crossing the seven-figure net worth threshold, we decided it was time to share along with some details.
On its surface, net worth seems simple. It’s the value of household assets less the balances of household debt. Upon deeper inspection, however, net worth is more complicated than that. Measuring net worth is valuable because it lets an individual or household know if they are generally headed in the right direction financially if it’s tracked over time. The key word here is “financially” because net worth is not and should not be a measure of self-worth. Net worth should also not be used as a measuring stick to compare yourself to others because of different lifestyles and costs of living. It’s a losing game comparing net worth figures unless you are comparing past to present, not one household to another.
Given the complexities and connotations associated with disclosing net worth, we have shied away from it up until this point. I even asked on Twitter for the reasons some people disclose their net worth and if anyone would be interested in knowing ours. The responses were mixed, but mostly positive. Some people would like to know, and the people who aren’t curious indicated would just move on.
My husband and I, at 28 and 31 years old respectively, passed the $1 million net worth mark, and I’ve outlined the details below using round numbers. When we hit the seven-figure milestone, I felt a little bit like I did when I received my college degree or the first time I made 6 figures. Reaching it feels a little hollow because I had hyped it up in my head, but it’s not like anything changes. Are we validated that we’re doing the right things? Yes! But we’re still a while away from having the net worth needed to make drastic lifestyle changes, like quitting a job or going part time.
You’ll notice when you break down the numbers that we’re quite a bit over the $1 million mark. I hesitated to post about it in case the stock market or real estate market fell immediately afterward. Also, my husband recently became part owner in his engineering firm, which added a nice bump as well.
Cash & Cash Equivalents
Savings Accounts $5,000 Checking Accounts $35,000 Credit Cards* -$10,000
House Hack #1 (3-unit)** $165,000 ($500,000 - $335,000 mortgage) Camper $12,000 House Hack #2 (2-unit)** $115,000 ($420,000 - $305,000 mortgage) LTR Duplex** $300,000 401k’s $250,000 IRA’s $120,000 Brokerage $40,000 Health Savings Accounts $20,000 Stake in Engineering Firm $90,000 Crypto $1,300
Personal Use Assets
2018 Honda Accord $25,000 2015 Toyota 4 Runner $25,000 Furniture, Jewelry, etc. $50,000
*The credit card debt includes our revolving monthly balances, plus a set of appliances financed at 0%.
**Real estate values estimated using recent appraisals, offers, and comparable sales.
People often ask if their home should be included in their net worth. Strictly by definition, your personal use assets, those assets that you can’t or won’t use to live off the value of at any point, have a place on your statement of net worth. That said, you’ll see that we do not have a property in that category. The reasoning here is that of our 8 units (this includes the camper) we have two units we spend time in and also rent out. Technically, I should take a portion of each of those and allocate it to personal use, however, we plan to keep these as investments and actually buy a traditional primary residence one day, so I’m basically leaving a spot for it in our personal use assets. The same goes for the camper, but it’s used as a rental so much more than we use it personally that it’s basically a rounding error.
Since net worth is relative, some of you reading this will think, “Awe, that’s cute. I remember when I hit my first $1 million.” Others of you may think, “That’s all fine and good, but I won’t ever get there.” To the first group, good for you, and I hope to join you soon. To the second, let me quickly cover how we got here. My journey started in 2012 when I bought my first house. I had about $100,000 of net worth when I was 25 in 2015, and this is when I met 22-year-old Aric who had net worth of $0. By the time my husband and I were married in 2019, our joint net worth was $600,000. Just the beginning of this year, we were worth $800,000. What I’m telling you is this: it starts slowly at first and builds quickly with discipline and consistency. And raging stock and real estate markets help too. If you’re just starting to save, this blog will help you understand where Aric and I allocate our savings. It was following this model that has led to this net worth.
Thanks for reading and helping me mark this milestone. Thanks also for being there with me through these last few years of growth.