What do you measure and why?

racing_blue

Interested to know what figures people keep track of: net worth, gross assets, earned income, spending, net worth including or excluding primary residence, investment income and gains etc etc etc

I have dabbled over the last few years and personally find the following three figures helpful:

1. net current assets (I think of all easily accessible current and savig account cash, excluding ISAs, minus credit card balance and any other money owed). I get twitchy if this is negative, and prefer a balance of between £10k and £20k.

2. projected pension income

3. what I call "net investible assets". This is basically all my financial assets minus all borrowing including mortgage and currently stands at around [NEGATIVE £220,000]

Reasons:

1) is my day to day float. As long as I have this, I know I won't have to sell investments at a bad time to fix the roof or when the car dies.

2) is fundamental in my long range planning.

3) is about freedom in the meantime. While this is negative, I must work. As it tips into positive territory, work will stop being a necessity and become a lifestyle choice.

What numbers do others find it helpful to keep track of? We are talking personal finance here by the way!

Kendall80

I measure/record/graph; total asset value in all accounts, total debt, margin and monthly change in margin. I also measure investment performance (ISAs, SIPPs, P2P, shares), monthly and cumulative cash interest and fluid/uninvested cash.


In addition, I measure/record my gas and electricity usage and CC 0% expiry dates.


That sounds really boring!

jimjames

Good questions, I think this is showing me I need to measure more data! As per Kendall80, I measure gas, electric and water to keep a track of costs as well as solar panel output, investment performance is recorded by Microsoft Money so I can track/review details each year if needed.

One thing I don't do is track pension estimates which is probably something I need to look into so I can check if I'm on track as I've recently moved from DB to DC pension scheme. I don't monitor savings interest but I do make sure I've got any spare cash in the best paying accounts.

I do track my rough net asset balances every so often but it's basically a rough estimate as house values involves element of guesswork. Although I have little cash I'm fortunate in that my net asset balance is positive but I've deliberately not paid off my mortgage when I can invest the money instead for a better return.

oldfella

Net annual income minus outgoings

racing_blue

oldfella wrote: »

Net annual income minus outgoings

Sure Charles Dickens would be proud :beer:

I think [rate of change of net investible assets] is kind of a function of those two things, as well as investment performance.

Linton

Basis for tracking
- Ms Money with data going back to 1999 with many reports set up.
- weekly push-button transfer of bank transaction data to Ms Money. Expenses of more than £10 are paid where possible by debit card or DD so that the bank statement records every item. Most are assigned to categories automatically by Ms Money.
- weekly push-button updating of all investment prices
- High level asset and expenditure/income model until death set up on Ms Money and supplemented by spreadsheets
- annual plan for expenditure and wealth flow between cash and investment portfolios

Weekly monitoring and checking of anomolies
- bank account totals
- Total expenditure over past year against budget, expenditure category spending
- Total wealth
- Investment performance in previous week/YTD/year, both in total and for identified problem investments.
- Dividend income over past year
- estimate of wealth at death.
- check of total investment and cash balances against annual plan

6 monthly
- Investment asset allocation in conjunction with wealth allocation plan leading to investment buy/sell list

annually
- New expenditure, portfolio wealth allocation and high level cash flow plan

AndyT678

oldfella wrote: »

Net annual income minus outgoings

Interesting that you choose to focus on cashflow. Is that comment serious or just being flippant with Dickens? I tend to mostly ignore cashflow and P&L and assume that income is about as high as I can easily get it, that costs are about as low as I can easily get them and that income > costs.

I've always done a pseudo-balance sheet to arrive at a net assets number that I like to see going up. Some months it goes down and that makes me sad

JohnRo

Monthly record of recurring incoming and outgoings.
Monthly record of various account valuations.
Monthly record of resulting net asset total.
All in spread sheet form, some months it's up, some it's down, as above that makes me sad but the general trend is pointing in the right direction.

oldfella

Interesting that you choose to focus on cashflow. Is that comment serious or just being flippant with Dickens?

---

you might think differently if you were a pensioner, its important that I dont run down total cash available

ChesterDog

I have a series of spreadsheet pages as I would for a business.

One is my Balance Sheet, listing all current fixed and liquid assets; house, vehicles, bank accounts, various investments, pension holdings. The total is my/our net worth and is shown graphically for each year since 2010 on the current spreadsheet.

The second is a Profit and Loss Account, showing all our sources of income and expenditure; also graphed as above.

A third sheet is an Archive of closed accounts and investments. This lists opening and closing values and the ultimate destination of the funds in each, also interest/tax figures for each across tax years.

I also have additional pages for recording certain projects/investments/expenditures in detail.

I love figures. :-)

ChesterDog

I also monitor changes in current year investment values using a Trustnet virtual portfolio whose 'purchase dates' I reset each year, and I measure lifetime gains in value of each via my real online portfolio.

Edit: The reason is that I retired from paid employment ten years ago (at 43) and - bearing in mind how long my money may need to last - I like to be sure that it is still growing rather than diminishing.