Greater Columbia, Chapin, Irmo, Lexington and Lake Murray.

Wednesday, August 29, 2012

How Wealthy Are You?

Most folks just think of NET WORTH when considering wealth.  Of course, net worth is the value of all assets minus the value of all liabilities.  Assets include cash, retirement savings, checking and savings accounts, investments, HOME VALUE, investment properties and fair valuations on art, collectibles, furnishings, etc.  Liabilities include debt balances on mortgages, student loans, credit cards, home equity and any other debt.   The result is net worth.  The cool thing about owning your own home is that over time, home ownership becomes a significant part of net worth (my plug for home ownership!)

Number ONE tip for accumulating wealth?  SPEND LESS THAN YOU EARN.

I have read the really good book, The Millionaire Next Door, and one web guru, Hugh Chou, also read the book and created a really cool wealth calculator.  The book and Mr. Chou's online calculator follow the premise that your total net worth alone does not tell a good enough picture of one's wealth, what matters is how much worth you can accumulate on your income considering your own age.

Where do you stand?  Are you an UNDER accumulator of wealth?   AVERAGE accumulator of wealth? PRODIGIOUS accumulator of wealth?  In other words, what is your wealth index?    Well, you can figure this out with the link below.  I've also included other links such as a cool net worth calculator and a portfolio manager.

HOW WEALTHY ARE YOU?  (Hugh Chou's Wealth Equation Calculator)

Calculate NET WORTH

Portfolio Monkey (cool investment and portfolio management tool)

BUY a home in Columbia, SC

Interesting notes:
  • U.S. median household income in 2010: $45,800 (down 7.7% from 2007)
  • U.S. median household net worth in 2010: $77,300 (down 38.8% from 2007)
  • A recent Federal Reserve survey finds that during the recent economic downturn, American families are saving less and only slowly repaying debt.

Mel Coker
Columbia, SC Realtor
RE/MAX Metro Associates

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