Reply to What is your age and net worth?

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[quote=Anonymous]55 & 49 - $4.5M (cash/retirement/investment accounts only; does not include Real assets).

If anyone cares..
- We track asset balances on a spreadsheet.  updated each quarter.

- We also maintain a "projections" model that assumes an average 5% annual growth rate on investments and 3% annual inflation for expenses.  Includes annual operating expenses as well as outflows for costs like college, cars, home remodeling in future years, as well as RMD impacts once we hit 70.5.

- Net balance would be (Investments+Growth+net income-Expenses-one time outflows like college costs)

- To account for market corrections, we adjust investment balances down by 30% for the next year.  Eg. If my 2019 Jan balance was $4.0 M and expected Dec 2019 balance was $5.0 M, we would adjust the 2020 Jan 1 balance to $3.5M ($70% of $5M) to make sure we are still "balance positive" over our lifetimes.  This is our "stress" test.  Once we get into 2020 January, we will update with actuals and move the 30% hit to the subsequent year (assuming we did not indeed go through a major correction).[/quote]

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