Defining Total Financial Networth at Age 37

For the past 6 months, I had seen my total networth fluctuating between +3.99% to -8.24%. 

I have been maintaining 2 sets of networth, (1) Cash Networth and (2) Total Networth since 2016 when I started tracking them on a monthly basis. Time flies and it has been 4 years already as of today.

This post I will talk more about my (2) Total Networth as this is more reflective of my overall financial assets that I owned or inheritance that I could passed to my wife and children after I leave this world. ** Choy I am only 37 young this year **

My personal definition of total networth = Total Cash Asset (can be disposed and converted to cash within 3 months) + Total Illiquid Assets like property and pension savings (ie CPF in Singapore context).

There has been lots of arguments in within the financial bloggers in Singapore whether we should include our residential and CPF for networth calculations. 

In my personal opinion, I am calculating based on total assets I owned legally as part of inheritance planning so I track them closely so my wife will know where are my money after I am gone.

A little background profile of myself:

• Holding a full time job since year 2007 till today as a diploma holder and never been out of job before. I thanked my lucky stars.
• Did my part time degree while working full time and complete it within 4 years.
• Got married at age 30 and got 2 kids subsequently.
• Paid up my HDB at age 35.
• Has been topping my cash to my CPA MA and SA since 34 years old and on track to meet 2020 CPF FRS.
• Doing my part time MBA currently.
• Not in any senior management role, non manager and non professional like doctor, lawyers etc. Just a lucky farmer.

Year	Total Networth	+/-
Dec-16	639,534.55	0%
Dec-17	791,014.49	24%
Dec-18	842,286.05	6%
Dec-19	961,920.13	14%
Jun-20	931,465.19	-3%

Below are the major contributors to my total cash networth and just like more Singaporean.

Residential Property Valuation
I did not include my residential property market valuation in my calculation but I included the CPF-OA used to purchase the property. This means I valued the property at cost price which is around 60% higher than my cost price at current resale market price. Reason being, I do not want to artificially inflate my networth as there's no chance of me selling my residential property and realized the property gains. In any case, I have already paid up the HDB.

CPF
I had included my Ordinary Account (OA), Special Account (SA) and Medisave Account (MA) in the calculation. Over the past 5 years, I have been topping up my SA and MA with cash to reduce personal income tax as well as to hit the goal meeting CPF FRS. This is one of my cornerstone for retirement planning.

Debt/Liabilities
ZERO

Food for thoughts:

• I used to set a goal of meeting 1 million SGD in total cash networth at age 40 years old. Like many, the total amount is just a number and nothing else.
• I think I will hit 1 million on or before my target age but not so obsessed with it anymore. Good to have a goal though.
• Nowadays, I am focusing more on the cashflows generated from the assets rather than the total numbers. 
• The total numbers gives me a sense of financial security but it is the cashflows that I need to survive on if I am out of job or during emergency situations. 
• However it is still worth tracking the total networth as I will know how much I am going to leave as inheritance if I am gone at any point of time. 
• Never say never, look at how Covid-19 hit us suddenly.

Have a plan, Execute it !!!

Plan for the worst, Pray for the best !!!