MMP154: Net Worth – How much is enough?

The Meaningful Money Personal Finance Podcast

Pete Matthew

Education, Business, Investing

4.9 • 1.7K Ratings

🗓️ 13 April 2016

⏱️ 40 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

This week I’m going to be looking at the subject of Net Worth, a subject I covered briefly back in Session 93. Back then I defined it and talked about how to increase it, but today’s session is a deeper dive into the subject, inspired by an email conversation I had with a listener called David.

Net Worth - How much is enough?

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Net Worth - How Much Is Enough?

Listener David from Glasgow is on the MeaningfulMoney mailing list, and I love for people to hit reply and ask questions and offer suggestions for topics they’d like me to cover.

David and I got into conversation about Net Worth. He wrote this to me:

Re net worth, I am just amazed how little this seems to be of interest and I read very little about the concept in the UK financial websites / papers.

Would be good to have a session on how various people 'run' their personal finance - for example I have a spreadsheet with various tabs and update my Fidelity S&S ISA and separate share tabs weekly with all sorts of info, then do a 'net worth' and 'balance sheet' each month and save on a master tab. I also have tabs for pension, retirement planning, spend and savings targets. All fine as far as it goes, but is there a 'master class' podcast on the basics you should keep tabs on

So I took this as a prompt to explore the concept of Net Worth in a bit more detail.

In this session, you'll discover:

The simple definition of Net Worth
Why, even though it sounds simple enough, it can be tricky to work out what your future Net Worth needs to be
A possible formula for working out whether your Net Worth is where it should be
Why it is essential always to work in today's money
My formulas for working out what your future Net Worth needs to be
...and how to work back from there to find out what you should be doing now

Next week, I'll answer the second part of David's question and look at some things you should be tracking as you go along. Remember there's a cheatsheet for this session, which summarises the calculation and the rationale [Insert Cheatsheet Leadbox here]

Resources mentioned in this show

Podcast: Session 93 - Net Worth: Define It, Build It, Protect It Website: Networth IQ Book: The Number Book: The Millionaire Next Door Video: Five sources of Inspiration and Motivation Podcast: Session 79 - Financial Forecasting with Andy Hart Calculator: Voyantist Financial Independence

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Transcript

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0:00.0	Hi folks and welcome to the Meaningful Money podcast session number 154. I'm a very wealthy,
0:06.3	modest person who wishes to remain nameless. This is the podcast dedicated to helping you put your finances in order.
0:23.8	My name is Pete Matthew and I'm going to share with you everything you need to know
0:26.5	and everything you need to do to secure your financial future.
0:30.5	I'm here to help you make sense of money.
0:42.9	Hello. Hello, hello, welcome back.
0:47.6	Great to have you with me once again for session number 154, incredibly, of the Meaningful Money podcast.
0:49.0	This week, I'm going to be looking at the subject of net worth.
0:52.3	Now, it's the subjects I covered briefly back in session 93.
0:55.8	Back then, I kind of just defined it, at least as I think it should be defined. I talked about
1:01.2	how to increase it, very high-level stuff. Today's session, though, is a much deeper dive into
1:05.2	the subject, and it's inspired by an email conversation I had with a listener called David from
1:09.2	Glasgow, so thank you, David.
1:15.6	Now, after the, we've covered that, and it's pretty meaty today, so I think you're going to enjoy it.
1:20.9	I'll obviously look at the most recent reviews that have been left, which is very kind.
1:29.7	I'll announce what we're going to be talking about next time, or at least what I think we might be talking about next time. I'm also just going to very briefly cover a new course, which I'm going to be launching in the next couple of weeks.
1:35.6	The course is called Learn How to Invest and is designed to meet a need, which became evident when I surveyed you guys at the end of last year. So learn how to invest. That's after the main body
1:40.8	of the show, so stay tuned for that. As ever, remember, this podcast is brought to you with the help of seven investment management, who are a firm of investment
1:47.0	managers based in London. They specialize in multi-asset investing, which brings institutional
1:51.9	investing techniques to ordinary people like you and me. Seven I am, continue to sponsor me here,
1:57.1	put their name to the show and everything because they support what I'm doing, trying to get decent, easy to understand financial information out to more people than I could ever do
2:04.5	one-to-one. So I'm grateful to them for their support. You can get the 7-I.M approach to investing on
	...

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