On the eve of my marriage, when I started this website, I wanted to “baseline” my net worth. I took stock of my income, spending, savings, and investments because I wanted to understand how my income, expenses, and net worth had trended since I entered the workforce after graduate school.
Luckily, I had kept reasonably good historical records, but I hadn’t really ever crunched the numbers holistically, looking across the entire time series of the last several years. I felt this would be a good baseline from which to understand what happened in the past, so I could figure out what I might need to change about the future.
What the heck was going on with my wealth?
There were a few things in particular I wanted to understand:
- What was I spending each month relative to what I was earning from my day job? What did that mean in terms of how much financial freedom I was building each year in return for spending frugally? And how had paying off my student loans impacted my baseline net worth?
- A couple years ago, I launched some income-generating websites where I sold career-related e-books and training videos. Because the expense of maintaining those websites was mostly my time, I had only ever loosely quantified what I earned from those websites and how they were contributing to my net worth. But how were they performing in detail? How had they trended month-to-month? And what might I do to grow their earnings?
- A couple years ago, I purchased a home in Palo Alto, which I loved living in, but when I accepted a new job, I had to move out to optimize my commute. So I started renting the house out. The rental income from the property was stable, but how did that stack up against my carrying costs for the house — mortgage, interest, taxes, insurance, HOA dues, maintenance?
And from all this analysis, what was my baseline wealth, and how had it evolved and grown over the years since graduating from school?
Follow along in this series of posts
I’m going to spend the next few posts deep-diving into each of these areas, so if you’d like to follow along to understand how I systematically break down my net worth and analyze it, please check out the posts below. Hopefully, they can shed some light on how you might approach doing the same analysis for yourself.
Along the way, I’ll also share the spreadsheets and tools I used to conduct my analysis, and you can always see the full suite of tools I use and recommend on my tools page.
Get the Exact Spreadsheet Template I Created to Analyze My Income, Expenses, and Net Wealth
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