Since I wrote about a productive way to keep up with the Joneses I’ve come across a few more sites/posts about net worth.

Nevblog.com

This is another personal blog that discloses net worth. He’s a young entreprenuer.

NetworthIQ.com

This is a great site showing the net worth of individuals who register. You can search by age, income, occupation, education, and state. The one thing it doesn’t have is the ability to see averages. Instead, you kind of have to guesstimate as to how you compare.

All Things Financial Blog

Fortunately, even though NetworthIQ doesn’t let you see averages, I read this post from All Things Financial Blog containing statistics on average net worth based on age. From my guesstimate on NetworthIQ, it looks like the actual average net worth figures are quite a bit lower over all than what was posted on NetworthIQ. I’m sure people are more inclined to register with NetworthIQ and post their net worth if they’re proud of it. I woudl imagine it skews high because of this.

I enjoyed looking at these stats and comparing them to my net worth. I’m above the statistical average but comparing to NetworthIQ, I seem to be about on track with the others that posted if not on the high end.

I’ve been struck again with how constructive it is to compare net worth. I don’t think you should get overly obsessed with it. I also realize that it could be a somewhat depressing activity if you have a negative net worth. But it does produce some positive motivation for me. I’ve never seen people’s net worth so transparently and it’s a great way to make those otherwise impossible comparisons.

David Allen in “Getting Things Done” compares productivity to the martial arts. He gives instruction on how to become a black belt in your personal productivity with a “mind like water” that allows you to handle anything that comes your way with a balanced response. When a stone is thrown into a pond, the water reacts with perfect balance. It reacts just enough to disperse the energy, no more, and then returns to a calm state. It doesn’t over or under react.

Becoming a black belt and having a “mind like water” in your personal finances is very similar. It means you can take whatever is thrown at you without knocking your finances out of control. You can respond to any situation with perfect balance. Unexpected events or changes in your finances, good or bad, can be handled with optimum efficiency, and little or no stress. It means you can direct the flow of money where you need it almost effortlessly.

In an effort to help people gauge where they are in their personal finance development, I’ve defined what people at the various “belts” might look like. Where are you?

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I recently listened to a podcast interview at The Money Blogger Podcast with J.D. Roth from Get Rich Slowly. The interviewer, Scott, mentioned the fact that some personal-finance bloggers, like the one at the end of this post, display their net worth online. While I’ve not felt comfortable displaying such information, I think it’s great that others have.

Personal finances are such a private thing and are managed behind closed doors. People avoid in-depth discussions about how they manage their personal finances out of fear that they’ll be judged or will feel inadequate. Understandably, people don’t share specifics of their financial situation. But unfortunately, we don’t even talk in general terms. This creates a vacuum of real-life information and a lack of yard sticks to measure our progress against. Instead, all we see of others is the exterior. We see their new car, fancy house, and weekend toys. What we DON’T see is how they achieved such external glitz. Debt statistics indicate that for a large portion of “joneses,” their external wealth comes with some degree of debt. Even more hidden are the other financial goals the joneses have given up to achieve their external wealth.

I applaud those who have posted their net worth for others to see. It gives us a new standard to reach for. It’s a new, more productive and healthy way to keep up with the joneses; one based on savings and living within our means rather than external appearances regardless of the “internal” cost.

Links

• Blueprint for Financial Prosperity

For the next 2 or 3 posts, I will be addressing questions that have come up over the last few weeks. After posting the article about creating and managing a short-term emergency fund, I received the following question:

I was wondering if you could mention some practical ways of building a STEF; any advice would help, especially for those on irregular incomes.

There’s really no trick to building an STEF. It’s mostly a matter of focus and making it a priority. That being said, here are some ideas to help get you started.
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