Networth Update for Feb 2010

Networth as of Feb 2010 is estimated around $652,000. A slight drop from Jan 2010.

The decline in networth was due to a slight drop in my entire investment portfolio as a result of the market correction.

Also worrying is my negative cash flow at the moment as the net income that the entire family is drawing in is less than our expenditures. It is likely to stay that way for sometime unless a job comes along soon.

Networth Update (Estimated)

Not superbly accurate but it paints a picture of my networth nonetheless. I still have other insurance policies that I have not included as the surrender values are way too small to make any significant impact on my networth. Main contributor is still my house with the resale prices of HDB soaring through the roof for flats around my area. Two units in the opposite block sold for crazy prices recently.

How to Calculate Your Networth

What is Networth?

In businesses, networth or book value of a company is obtained by adding up all the company's assets and subtracting it by the total liabilities. This is known as the networth of the company.

The same can be done for individuals to calculate their networth.

How to Calculate?

To calculate your networth, simply add up all your assets and subtract them by all your liabilites or debt as we commonly call it.

Why is this number important?

Tracking this number is a good way to see that you are building your wealth and increasing your assets. A person's networth should be increasing over time as their income increases.

My Personal Experience.

10 years ago when I was just 18 years old, my networth was only slightly over $1000. That was the total amount of money I had in my bank account. I had no other assets and no other liabilities.

During the 10 years, I have seen my bank account drop close to $0. After experiencing what it felt like to be "poor", I decided that I should never let that happen to me again.

Overtime, I begin to acquire assets like stocks. I also took on more liabilities as I had to purchase a house for my family. All in all, I roughly estimate my family's networth to be slightly above $500,000.

Observations about High Networth Individuals

There are certainly some common denominators when it comes to people of high networth. I think you will find that the most important thing about them is that they are FINANCIALLY SAVVY. In fact, Singapore has one of the highest concentrations of millionaires in the world and this is expected to rise.

They do know about their investments and they do know how to manage their money.

I would like to think that it is the financial education that this people get that helps them to grow their money.

But wait a minute! No school ever taught us financial education right?

You are correct!

Financial education is largely taught at home. Nowadays, I think financial education is obtained through reading of books and surfing of the internet. It is possible to become financially savvy simply by reading more from the internet and learning from the experiences of those who have walked the path.


Read Related Articles:
1. Conversation With A Millionaire
2. Singapore's 40 Richest
3. Are You Wealthy?
4. 3 Key Lessons from Rich Dad, Poor Dad
5. A Millionaire By Thirty

Are You Wealthy?

Are you wealthy?

The term wealthy means a host of things to different people. Some people define wealthy as having an abundance of material possessions.

In the book The Millionaire Next Door, the definition of wealthy is defined based on one's expected level of networth.

A person who is earning only 1K per month and a person who is earning 10K per month should not be expected to have the same amount of wealth. If they do happen to have the same amount of wealth, it simply means that the person who is earning less is doing a much better job at accumulating wealth that the person who earns more.

What should you expected networth be?

In the book, your expected wealth should be calculated as such:

(Annual pre-tax household income multiply by your age ) divided by 10

So if a person who is 20 years of age is earning $100,000 per year, his expected networth is $200,000. If his networth is more than $200,000, he is building his wealth.

PAWs versus UAWs

PAWs are prodiguous accumulators of wealth versus UAWs who are under accumulators of wealth.

PAWs are simply defined as those whose actual networth are twice their expected networth

7 Factors

Eighty percent of America's millionaires are first generation rich! That is comforting news for us who were not born with a silver spoon in our mouths. The authors also discovered seven common denominators amongh those who successfully build wealth. They are:

1. They live well below their means
2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth
3. They believe that financial independence is more important than displaying high social status
4. Their parents did not provide economic outpatient care.
5. Their adult children are economically self-sufficient.
6. They are proficient in targeting market opportunities.
7. They chose the right occupation.

Conclusion

I would also like to think that this method of defining wealth might be flawed in some ways. If a person has a sudden change in income over the recent years, this way of calculating wealth might not be accurate. Nonetheless, it still provides a pretty good gauge at how well we are accumulating our wealth.


The author is happy that based on the expected networth calculations and his actual networth, he is actually in the category of a wealth builder. However, he has not reached the stage of being a PAW where his actual networth is twice his expected networth. The author also hopes that he is in the right occupation.


Read Related Articles:
1. My Flat is Worth Half A Million?
2. Passive Income Update for October 2009

My HDB Flat is Worth Half A Million?

In Singapore, the government provides affordable housing through the Housing Development Board (HDB) which provides flats for people at very cheap rates. I bought my flat from HDB brand new and it cost me slightly over $300,000 for a 90 square metre or 968 sq foot flat. That works out to be around $325 per square foot which is quite alright for Singapore flats.

Yes.. I know that I should never count my HDB flat as an asset since I am essentially living in it.

But just for interest sake, I checked out the HDB website and realised that flats around my area were selling for over half a million!

There were not a lot of transactions but I guess that it should provide a rough gauge of how much my flat is worth now. It's a pity that I am not able to refinance it to unlock some of the cash value in my HDB flat. Otherwise, I would be really rich in cash.

Oh well, guess I will just have to wait for another few more years before I can start hunting for a 2nd property to either live in or rent out..

Family Networth Hits $500,000

With the brief stock market recovery/rally, my family's total networth (assets minus liabilities) has exceeded $500,000 for the first time.

Not a time to celebrate though as the markets might drop and bring our networth down again.

Networth Update for Mar 09

Networth Main Contributor : My House

So far, one of the large ticket items that I have bought is my 4 room flat.

Based on the 3Q 2008 housing statistics obtained from HDB, my 4 room flat is worth $481,000 (based on the median price). Considering that I bought my home at just slightly above $300,000, this has by far proven to be my best "investment" (note: I do know that this is not really an investment per se)

TOWN	4-ROOM	5-ROOM	EXECUTIVE
ANG MO KIO	$333,000	$468,000	-
BEDOK	$305,000	$430,000	$471,000
BISHAN	$390,000	$537,500	$600,500*
BUKIT BATOK	$335,000	$441,400	$470,000
BUKIT MERAH	$438,300	$572,000	-
BUKIT PANJANG	$284,000	$360,000	$457,500
BUKIT TIMAH	$431,900*	$615,000*	$667,500*
CENTRAL	$386,000*	$593,000*	-
CHOA CHU KANG	$299,000	$358,800	$413,000
CLEMENTI	$367,000	$503,900*	$630,000*
GEYLANG	$364,000	$570,000*	$500,000*
HOUGANG	$303,000	$380,000	$462,000
JURONG EAST	$308,500	$418,000	$465,000
JURONG WEST	$294,500	$363,000	$406,000
KALLANG/WHAMPOA	$400,900	$520,000	$542,500*
MARINE PARADE	$395,000*	$632,500	-
PASIR RIS	$320,000	$375,000	$500,500
PUNGGOL	$327,000	$391,500	$450,000*
QUEENSTOWN	$481,000	$620,000*	$780,900*
SEMBAWANG	$300,800	$355,000	$420,000*
SENGKANG	$320,000	$374,000	$458,000
SERANGOON	$325,000	$414,000	$485,000
TAMPINES	$330,000	$395,000	$488,000
TOA PAYOH	$397,000	$553,000	$617,500*
WOODLANDS	$283,400	$330,000	$420,000
YISHUN	$251,000	$338,000	$401,000*
OVERALL	$313,000	$380,000	$455,000

Networth for Sep 08

Updated my networth amidst the stock market bloodbath last week.

Networth is currently $449,443. The consolation is that I have increased my monthly passive income. Think I will not focus too much on my networth but rather work at increasing my monthly passive income. Too often, a wrong focus will cause me to make investment decisions that are not too wise..

Discovered this cool website that helps to me to track my networth. You can follow it at the button which shows my networth at the bottom right of my site (scroll down pls).

Current Net worth (August 08)