Just became a millionaire

ex-pat_scot

cfw1994 said:

MallyGirl said:

if it wasn't for those pesky kids ...

...we'd all be millionaires!

Quite.
It's tempting to put a figure on things.
I daren't.
4 children.
Foregone spouse income for many years.
Childcare costs
Buying the bigger house.
Buying and running the bigger car.
All those extra curricular things.
All the holidays.
School fees.
University contributions.

But that would be another life, that we have not lived. A fork early in the road we took. We cannot retrace our steps, and have no wish to reconsider the choices we made and continue to make. 
Life is not a number, even if we obsess on this forum about exactly that - distilling future life into exactly one number.

Diplodicus

Very poetic.

Welcome to the Aspire Lounge. Take a few seconds to adjust to the lighting.

Please respect members bathing in the glow of self-satisfaction.

strawb_shortcake

This thread has got me thinking how I would work out my net worth. Purely curiosity and it might give me a nice warm fuzzy feeling maybe??

Age 39
House equity £220k (owe £68k)
Savings and investments £100k
Debt £0
DB pension currently at £9.5k pa based on current salary it's estimated at £34k by 68.
On target for full State pension. 

Is it possible to apply an equivalent value or pot for my current DB pension just for this exercise? 

On paper it looks like I'm doing better than I feel I am.

TY

[Deleted User]

annabanana82 said:

This thread has got me thinking how I would work out my net worth. Purely curiosity and it might give me a nice warm fuzzy feeling maybe??

Age 39
House equity £220k (owe £68k)
Savings and investments £100k
Debt £0
DB pension currently at £9.5k pa based on current salary it's estimated at £34k by 68.
On target for full State pension. 

Is it possible to apply an equivalent value or pot for my current DB pension just for this exercise? 

On paper it looks like I'm doing better than I feel I am.

TY

It is possible.  Actuaries come up with something called "commuted value".  The number depends on inflation protection and other benefits built in - as well as interest rates.  

If you really want to, you can multiply 9.5K by 25 and add it to the other numbers you listed.  it's kinda useless though.  Basically, with a DB pension and a house and some investments on the side you will be fine.  Assuming you don't change jobs but then you'll be making alternative pension arrangements.  Looks good to me. 

MK62

annabanana82 said:

This thread has got me thinking how I would work out my net worth. Purely curiosity and it might give me a nice warm fuzzy feeling maybe??

Age 39
House equity £220k (owe £68k)
Savings and investments £100k
Debt £0
DB pension currently at £9.5k pa based on current salary it's estimated at £34k by 68.
On target for full State pension. 

Is it possible to apply an equivalent value or pot for my current DB pension just for this exercise? 

On paper it looks like I'm doing better than I feel I am.

TY

Total net worth on paper and realisable assets are often quite different (and the latter is a little more "real world")

You could realise the equity in your house.......but then you'd need to buy/rent somewhere else to live.

You can't realise your pension for another 18 years......and even then you couldn't actually realise it all without a massive tax bill (assuming you took a CETV, were able to transfer it to a DC scheme and then cashed the lot in).

All you can do really is give notional values to things like DB and state pensions, and come up with some semi-imaginary figure.

At 39 though, it looks like you are doing fine......personally, I wouldn't worry that much about net worth on paper - it's something of an illusion in the end.

strawb_shortcake

MK62 said:

annabanana82 said:

This thread has got me thinking how I would work out my net worth. Purely curiosity and it might give me a nice warm fuzzy feeling maybe??

Age 39
House equity £220k (owe £68k)
Savings and investments £100k
Debt £0
DB pension currently at £9.5k pa based on current salary it's estimated at £34k by 68.
On target for full State pension. 

Is it possible to apply an equivalent value or pot for my current DB pension just for this exercise? 

On paper it looks like I'm doing better than I feel I am.

TY

Total net worth on paper and realisable assets are often quite different (and the latter is a little more "real world")

You could realise the equity in your house.......but then you'd need to buy/rent somewhere else to live.

You can't realise your pension for another 18 years......and even then you couldn't actually realise it all without a massive tax bill (assuming you took a CETV, were able to transfer it to a DC scheme and then cashed the lot in).

All you can do really is give notional values to things like DB and state pensions, and come up with some semi-imaginary figure.

At 39 though, it looks like you are doing fine......personally, I wouldn't worry that much about net worth on paper - it's something of an illusion in the end.

Thank you. 

I do agree with you I was just curious how you would assess a DB element.

I never got a warm fuzzy feeling from yours or the other reply to my post, so yes net worth doesn't really mean much, I can't really downsize my house and transferring my pension isn't going to happen 

MK62

annabanana82 said:

MK62 said:

annabanana82 said:

This thread has got me thinking how I would work out my net worth. Purely curiosity and it might give me a nice warm fuzzy feeling maybe??

Age 39
House equity £220k (owe £68k)
Savings and investments £100k
Debt £0
DB pension currently at £9.5k pa based on current salary it's estimated at £34k by 68.
On target for full State pension. 

Is it possible to apply an equivalent value or pot for my current DB pension just for this exercise? 

On paper it looks like I'm doing better than I feel I am.

TY

Total net worth on paper and realisable assets are often quite different (and the latter is a little more "real world")

You could realise the equity in your house.......but then you'd need to buy/rent somewhere else to live.

You can't realise your pension for another 18 years......and even then you couldn't actually realise it all without a massive tax bill (assuming you took a CETV, were able to transfer it to a DC scheme and then cashed the lot in).

All you can do really is give notional values to things like DB and state pensions, and come up with some semi-imaginary figure.

At 39 though, it looks like you are doing fine......personally, I wouldn't worry that much about net worth on paper - it's something of an illusion in the end.

Thank you. 

I do agree with you I was just curious how you would assess a DB element.

I never got a warm fuzzy feeling from yours or the other reply to my post, so yes net worth doesn't really mean much, I can't really downsize my house and transferring my pension isn't going to happen 

Apologies if any bubble bursting took place......better to keep feet firmly planted though imho.....

strawb_shortcake

MK62 said:

annabanana82 said:

MK62 said:

annabanana82 said:

This thread has got me thinking how I would work out my net worth. Purely curiosity and it might give me a nice warm fuzzy feeling maybe??

Age 39
House equity £220k (owe £68k)
Savings and investments £100k
Debt £0
DB pension currently at £9.5k pa based on current salary it's estimated at £34k by 68.
On target for full State pension. 

Is it possible to apply an equivalent value or pot for my current DB pension just for this exercise? 

On paper it looks like I'm doing better than I feel I am.

TY

Total net worth on paper and realisable assets are often quite different (and the latter is a little more "real world")

You could realise the equity in your house.......but then you'd need to buy/rent somewhere else to live.

You can't realise your pension for another 18 years......and even then you couldn't actually realise it all without a massive tax bill (assuming you took a CETV, were able to transfer it to a DC scheme and then cashed the lot in).

All you can do really is give notional values to things like DB and state pensions, and come up with some semi-imaginary figure.

At 39 though, it looks like you are doing fine......personally, I wouldn't worry that much about net worth on paper - it's something of an illusion in the end.

Thank you. 

I do agree with you I was just curious how you would assess a DB element.

I never got a warm fuzzy feeling from yours or the other reply to my post, so yes net worth doesn't really mean much, I can't really downsize my house and transferring my pension isn't going to happen 

Apologies if any bubble bursting took place......better to keep feet firmly planted though imho.....

No bubble burst 🙂

Ibrahim5

annabanana82 said:

MK62 said:

annabanana82 said:

This thread has got me thinking how I would work out my net worth. Purely curiosity and it might give me a nice warm fuzzy feeling maybe??

Age 39
House equity £220k (owe £68k)
Savings and investments £100k
Debt £0
DB pension currently at £9.5k pa based on current salary it's estimated at £34k by 68.
On target for full State pension. 

Is it possible to apply an equivalent value or pot for my current DB pension just for this exercise? 

On paper it looks like I'm doing better than I feel I am.

TY

Total net worth on paper and realisable assets are often quite different (and the latter is a little more "real world")

You could realise the equity in your house.......but then you'd need to buy/rent somewhere else to live.

You can't realise your pension for another 18 years......and even then you couldn't actually realise it all without a massive tax bill (assuming you took a CETV, were able to transfer it to a DC scheme and then cashed the lot in).

All you can do really is give notional values to things like DB and state pensions, and come up with some semi-imaginary figure.

At 39 though, it looks like you are doing fine......personally, I wouldn't worry that much about net worth on paper - it's something of an illusion in the end.

Thank you. 

I do agree with you I was just curious how you would assess a DB element.

I never got a warm fuzzy feeling from yours or the other reply to my post, so yes net worth doesn't really mean much, I can't really downsize my house and transferring my pension isn't going to happen 

I guess I would have been in a similar position a few years ago. Just keep investing any spare money and keep on assessing the situation. At some point you can take your DB pension early which is index linked I assume. Combine that with drawing some of your investments each year. You end up with a great situation that I never appreciated would happen. You can relax as the DB pension will cover all your bills. You will always be clothed and have food on the table. No worries like these people with 100% DC pension have. If the stock market booms you go to the Bahamas. If it crashes Skegness. If it booms you get a Ferrari, if it crashes you keep the Fiesta. You're in a great situation.

Roger175

At 39 though, it looks like you are doing fine......personally, I wouldn't worry that much about net worth on paper - it's something of an illusion in the end.

Whilst I would agree net worth on paper can be something of an illusion, the very act of recording ones net worth regularly can be very beneficial.

To me, it is one of the things which has kept me sane over the last few decades - when life seems to be in turmoil, when you're really stressed at work, then the the car goes wrong, then one of the kids needs new football boots/rugby kit/deposit on student flat etc, it can feel like you're achieving nothing and not making any progress, but a quick sneaky look at our net worth calculation makes you realise you are actually moving in the right direction.

I like to update the calculation on a monthly basis and then have a formula set up which shows how it's changed year on year. Sometimes you have to do a double take when you look at it and think, what!, how can we be worth £50k more than this time last year or £500k more that this time 5 years ago.  

We started recording our net worth over 25 years ago, at which point our net worth was around -£60k. It's now worth just short of £2m. On a day-to-day basis we don't actually feel much better off and are still very frugal because of that, but when things get a bit stressed I do get a warm feeling being able to look at the sums and think, yes, it's gone well behind the scenes.