Net Worth: Comparing Apples to Oranges?

When I started calculating my net worth many years ago (just prior to starting this blog I believe in 2009) I was excited, and I still am excited when I do the calculations every month.  It's a way for me to keep accountable with my personal finance journey to create my own Findependence Day some day.  One of the first inspirations was Million Dollar Journey when he shared his progress towards having a net worth of one million dollars before the age of 35.  Since then, he has successfully completed his journey this year, starting from $200,000 in 2006 and hitting the magic number in 2014.  His blog has been undoubtedly an inspiration to my own journey of financial freedom.  He is like my personal finance idol.

Related: Book Review: Findependence Day

Although I did not compare my net worth with his even from the very beginning (he is very much ahead in the financial independence game) I did look at it as inspiration (hence the personal finance idol title).  I highly doubt I will have a million dollar journey completion myself at age 35, but maybe in my 40's it may happen.

Comparing Your Net Worth

Net Worth: Comparing Apples to OrangesIs comparing your net worth to others a good idea when you are possibly comparing apples to oranges? Everyone has a different income, different investing style, different spending style, and different cost of living…right?

Recently I stumbled upon this page full of net worth voyeurism via J. Money from Budgets Are Sexy to many personal finance bloggers who track their net worth on a regular basis, just one click away to reveal the net worths of your favourite personal finance Internet personalities.

I must admit, when I saw some of the net worth results on that page, my eyes bugged out a little and perhaps my jaw dropped to the table for a second.  A few personal finance bloggers have some stealth, well-over $1,000,000 net worth updates.  My first gut reaction was…**gulp!**… hey, I thought I was doing pretty good for my age… then I proceeded to feel insecure and thought I should really be doing better.

So, my conclusion is that everyone reacts differently when they compare themselves to others.  For something that you can change, I think that comparing can be a healthy way to improve yourself.  However, for something that you cannot change, there isn't much point to compare and make yourself feel worse than you are.

So my response is… brush my ego off a little bit and keep calm and carry on!

Set goals for yourself that you can keep and when you achieve your goals, you will free great no matter what everyone else is doing.

How Much Should Your Net Worth Really Be?

Well, Liquid from Freedom Thirty Five blog has a great post on net worth and what the median and average net worth results are for people in Canada, in the United States, and for people who are singles are those who are couples (established) and couples who are just starting out.

I found it quite interesting to read that there are about 320,000 Canadians with $1 million in financial assets (not including their principal residence), which means that about 1% of Canadians are millionaires.  I bet that number is much larger if you count principal residences because I know that many people who live in the greater Vancouver area  are sitting on their properties and who have paid off their mortgages.

The average household net worth in 2013 for Vancouverites is over $700,000.  Target net worth for singles at age 30 (I am around there,  yes, single and 30-something, not so young anymore haha) is $20,000 for sufficient, $60,000 for good, $250,000 for excellent, and $600,000 for rich.  As someone who strives for completion of goals, knowing this information is helpful to see where I stand and to see what the benchmark might be around.

I suggest you go to Liquid's post to check out the detailed graphs and excel charts on expected net worth.  Either it will make you feel better or it may may you feel like **gulp** and prompt you to action.

Keep Calm and Financial Independence On…right? 🙂

Readers, do you calculate your net worth monthly?  Do you enjoy the voyeurism behind looking at others grow or shrink their net worth as time goes by like I do?

The following two tabs change content below.
Young is a writer and former owner of Young and Thrifty and the main "twitter' behind Young and Thrifty's twitter account. She lives in Vancouver, BC and enjoys long walks on the beach, spending time with her anxious dog, and finding good deals. If you like what you read, consider signing up for email updates.

8 Comments

  1. Liquid on January 19, 2015 at 2:50 am

    Thanks for mentioning my graphs and charts. 🙂 Tracking one’s net worth is the first step to making it grow. I don’t compare my net worth with others directly, but I like to see how their investments progress over time. If my portfolio is under performing everyone else’s then that’s probably a sign I need to change how I’m managing my money lol.

    After reaching his million dollar goal, Frugal Trader has started featuring the net worths of other young and frugal individuals on his blog. I think you’d make a great candidate if you’re interested. 🙂 I’m sure his readers would enjoy reading your story.



  2. BeachBoy on January 19, 2015 at 8:01 am

    I still believe Net Worth, unless used solely to compare our progress, is useless. There is so much difference between RRSP money and TFSA or investments.
    Someone could have $100k in RRSP and someone else could have $100k in other investments… The person with the $100k invested in TFSA and outside the RRSP has 30-40% more Net Worth than the other. Thus the comparison between net worths unles sit’s only yours is pointless IMO.
    Even when you compare your own net worth, if one year you put $20k in your RRSP and another year $20k in TFSA, the net worth change is the same but the achievement is much highr if you can invest $20k after tax!
    Of course when you have millions, the difference between pre and post tax is not significant, but it is for lower numbers.



  3. J. Money on January 19, 2015 at 12:18 pm

    Seeing people’s net worths was what got me actually into blogging myself 🙂 No on ever talks so openly about money in the real world so when I started coming across blogs I was like whaaaaat? That’s so cool! So the first thing I did on Budgets Are Sexy 7 years ago now (wow) was to show my net worth too.

    And you’re totally right btw – we’re all in different stages and ages of life so it’s hard to compare apples to apples exactly, and especially when people put different things in their net worth too. For example some put in cars and the houses they live while others don’t, some combine their net worth w/ their wife’s/husband’s so it’s really two people vs 1, we all live in different areas of the world, etc etc. Very fun to watch and learn, but doesn’t work well for comparing 🙂



  4. Emma on January 19, 2015 at 11:03 pm

    My net worth isn’t very high, but I’m still very happy because I don’t have any debt and I have a family and a roof over my head. That’s all it matters for me. Of course, we all have different goals so it’s different for everyone.



  5. Kyle on January 20, 2015 at 10:38 pm

    Sounds like you’re ahead of a lot of Canadians Emma!



  6. Jackie B on January 23, 2015 at 8:13 pm

    I think that everyone has their own individual circumstance so while comparison can be helpful for a bit of comparison, people shouldn’t be discouraged because of it.



  7. kc on January 24, 2015 at 12:33 pm

    “The average household net worth in 2013 for Vancouverites is over $700,000. ”

    what is this number when housing is stripped from the “net worth”

    if this figure includes houses that are principle residences, your numbers are wrong i am afraid to say. principle residences are not an investment, they are speculation. a real estate investment is a secondary that generates income or losses a month, bought to be sold at a later date for +/- $$ or bought to be rented/leased for cash flow whether positive or negative. i feel there is a world of pain coming to vancouver’s housing.

    remember this number and lets check back in 5 years what it is at after the bottom is hit.



  8. Sean Cooper, Financial Journalist on January 24, 2015 at 8:49 pm

    While my net worth may be high, it’s all tied up in real estate. Once my house in paid off in November, I won’t be touching real estate anytime soon. Time to max out my TFSA get some low-cost investments.



Leave a Comment