Are You Reading Blogger Net Worth Reports All Wrong?

Do you read blogger net worth reports?

Do you enjoy a little peek into the finances of some of your favorite bloggers?

One of my favorite reports is J. Money's monthly net worth updates, a feature he's had for over ten years. What I enjoy about his reports is the report has everything you would want in a net worth report. All the juicy numbers, a bit of commentary explaining the changes, and then photos of his three coins kids.

When I first started blogging about personal finance, I did what many money bloggers do today – I shared my net worth.

It was a rarity back then in 2005, so much so that it landed me a small feature in the New York Times (original is behind their paywall).

These days, I no longer share our net worth but many other bloggers still do.

And these monthly net worth reports can be valuable… if you read them the right way.

Unfortunately, most people don't. They view it with a mixture of envy if the numbers are big, derision if the numbers are small, and sometimes with a dash of schadenfreude mixed in.

Here's how to read them the rightway:

Know Their Approach vs. Yours

How do you track your net worth? Do you include your home equity? How about the value of your cars? Where does debt fit in? How about income?

I started tracking our net worth after college. Over those 14 years, I've learned a lot about my money.

One of the key lessons is that we all track it differently. I include the value of our home at the purchase price. Some others use a free tool like Zillow value their home. Others use property tax records. Some don't include it at all!

The point is that if you want to compare apples to apples, you have to understand how your approach differs from theirs. This will put their numbers, and their notes, in proper perspective.

Some bloggers, like Adam of Minafi, only report their investment portfolios in their “net worth reports.” He calls them investment reports but it's good to know that it doesn't include every asset he owns, just the investments.

The Notes Are the Key

What I really enjoy about J's updates is that they're half-journal, half-spreadsheet. In our net worth spreadsheet, I keep little notes that remind me of major events that impact our money. I think those notes are far more valuable than the number, especially when I look back at it many years later.

The notes will tell you what happened that month but also the blogger's frame of mind. If you read an update from fall of 2008, you can really see how he or she reacted to the market melting down at the start of the Great Recession.

If they are on a journey, whether to amass a seven-figure nest egg or pay down a five-figure credit card debt, they are likely to run into set backs. Maybe there was an emergency, maybe they forgot to do something, or maybe they just didn't make as much progress as they had hoped – see how they respond, how they think about it, and how you can use some of those approaches when you encounter similar problems. Real life line charts are rarely smooth, it's all in how we manage the bumps.

The Actual Numbers Don't Matter

Your net worth is to your finances as your body weight is to your health.

It is an important indicator, certainly, but it doesn't tell the entire story. Someone who is 239 pounds and 6′ 3″ in height can be a professional athlete. 239 pounds and 5′ 2″ Not so much.

Your finances are similar.

The numbers do give you one insight – how closely you should read and try to relate to the report. If you have a negative net worth (high student loans or credit card debt and few assets), your financial situation is vastly different than someone who has a seven-figure net worth. This isn't always the case but it is more likely the case.

The millionaire net worth may talk more about investments and retirement whereas you probably would value more discussion on paying down debt. That's not to say you shouldn't read that report, it's just that you shouldn't dwell on it.

Your goal is to try to find reports from people in similar situations because that's where you'll learn the most.

Study Net Worth “Composition”

Who you think is better off – someone with a million dollars in cash or someone with a million dollars in home equity? Both have a net worth of a million dollars but one can access it much more easily.

We know we want a mix of cash, retirement assets, home equity, and other (hopefully appreciating) assets. As you read blogger reports, study where they have their money and see how it might inform your own decision. I wouldn't change my approach based on another person's report but it does add a data point, especially if that person seems more educated on the subject.

What's important to remember is that as your savings grow, you'll invest more. Some of those investments will be in the stock market, some will be in other asset classes like real estate, and others may be in passive income sources.

Expect (a Little) Loss of Control

If you read a lot of net worth reports, especially from folks in different phases of life, you can learn a lot about how to manage money as you age. This is a transition that can be challenging to navigate if you don't expect it.

If you are 24, saving into a 401(k), and single – your net worth report is going to be very simple. If you save more than you spend, it'll likely go up. The market will affect your investments but they are a relatively small part of your net worth so your savings will still dominate.

As you get older, your net worth will fall (and rise!) through no fault of your own because your retirement and taxable investments will take up a greater percentage of your net worth. It can be a little jarring to see your net worth go down even though you didn't make a major purchase. It's the nature of the beast.

If your net worth is entirely in cash, the only shock you'll experience is the slow drip of inflation eroding your purchasing power. It's so subtle you won't even see it because it's invisible in the short term.

If you have your net worth in other assets, those assets will rise and fall in value. Those who owned homes during the Great Recession saw their net worths fall as home prices fell. Those who held stocks also experiences a shock as the markets dropped by half.

But the flip side is that you'll see positive jumps too. If you have a million dollars and it goes up by 1% in a month, that's a ten thousand dollar increase in net worth.

This loss of control can be a little disconcerting. It's like taking a test and getting a bad grade because you're graded on a curve and the test was too easy. It feels unfair. But this sensation is not only to be expected, but it's also a good thing. It means you're saving enough and those savings are growing in the long run. The short-term pain is like muscle soreness after going to the gym.

Don't Compare Yourself to Others!

Kylie Jenner's Forbes Cover – August 2018 – read the story
Whenever there are numbers involved, it's easy to try to compare yourself with others. And net worth reports are just numbers!

There are several problems with this.

First, it's the wrong game. You should be comparing yourself with yourself from a year ago, from five years ago, or from ten years ago. It's about your progress, not your ranking at this very moment.

It's not where you are but where you are trending. If you were gifted a million dollars, you'd probably be the richest of all of your friends. So what? Where will you be in a year? Five years? If you're still sitting on a million, then you've been stagnant. Stagnant is bad.

Next, we don't all start at the same place. Life is not a race where we all begin at the start line. When people were complaining about how Kylie Jenner appeared on Forbes magazine as a “self-made billionaire,” it was because she was born into a wealthy family. You can't control where you start but you can control where you go. Again, it's the trend.

It might be discouraging to look at Adam's investment report and marvel at how he's in his mid-thirties with an investment portfolio north of a million dollars. But read the notes – he earned a windfall in 2015 when the startup he was working at was acquired. Credit to him for working hard and being in the right situations but even he recognizes his situation is not typical.

A little comparison won't kill you but having it turn into an emotional response will be bad. It's good to draw motivation from it. It's good to get a bit of solace when you see a blogger's net worth fall because of the stock market, just as yours did, but don't let it affect your decision making. Don't let it get you too down or too up.

And sometimes, it's comforting and instructive to see other people report on their mistakes and failures. OthalaFehu's net worth report is one of the few that lists an accounts receivable from a failing business deal.

Look for Holes in Your Net Worth

One of the hardest things to find is something that isn't there. It's very hard to find the absence of something – the famous unknown unknowns (look up the Johari window for more on this).

What's good about reading the net worth reports from bloggers is that you can compare your net worth figures to theirs and see what holes exist in your financial situation. The other reports show you what other people are tracking so you can see what you might want to track.

They also can show you what others are thinking about. Michael of Financially Alert shares in a recent net worth update that he's been taking advantage of travel reward credit cards and “travel hacking.” If you've never heard of travel hacking before, it's may introduce a whole new world of travel for you. It's an unknown unknown that is now a known unknown!

The final lesson in all this is that you should be reading net worth reports with an eye towards your own. What can you take from another report that you can integrate into your own? What are you missing? And how can you make sure you are improving each and every month?

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About Jim Wang

Jim Wang is a thirty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and a farm in Illinois via AcreTrader.

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