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  • Writer's pictureGary Grewal

July Update: Is Cash the New Crypto?


Summertime means getting back out on the water!


Well friends, here we are in the middle of 2023, which means it is summertime! Remember how exciting the beginning of June was during those involuntary education years? Sure in college we had finals to worry about, but in K-12 it was all games, rallies, parties, and ceremonies, not to mention the arrival of the season for sleeping, swimming, and slowing down.


It's been an interesting year for our economy and the markets as well, and I've been wondering if patterns mean anything anymore. What some are calling an "anomaly" of a growth year gives a whole new meaning to "past returns are not guarantees of future results".


There seems to be an increasingly partisan divide as to whether an economic slump will take over, or the economy will continue to surprise us.


Whatever the case might be, you might want to follow the money and decide for yourself, if you've set yourself up for success no matter what situation you find yourself in.


What have I been up to the last month?



  • Learned how to sew (or at least get a button back on my pants)

  • Read 3 books and listened to 3 audiobooks

  • Gave a scholarship to a deserving high school senior

  • Volunteered at BottleRock in Napa

  • Participated in community development meetings related to the expansion of multimodal transportation in our community (very important to me as you probably know by now


I've also been thinking more about my net worth as I read about others and wonder how whether we like it or not, it's how a lot of people, especially in the FIRE committee, evaluate their progress and place in the world. But do they really encompass the real accomplishments?


What if we had things like "life fulfillment score" or "net happiness updates?" Well, I'd imagine they'd be harder to verify and measure data on. Being that we are a competitive species, we seek external validation of value.


What neighborhood do you live in, what car do you drive, what social groups do you belong to?



Yet at the same time, we've been seeing a mental health crisis across our country. And it's not just those suffering homelessness or mental disabilities that are suffering, it's everyday people. White-collar workers, blue-collar workers, Gen Z to Boomers.


I won't get into how we've become so politically divided as well, but that likely has something to do with it. We've become more isolated since the pandemic, even prompting the U.S. Surgeon General to issue a warning about it. I even saw a report that people are driving crazier than they were before the pandemic, becoming less patient, and becoming less tolerant (I've certainly seen my fair share of this).


What does this have to do with personal finance? Well, a lot of these people who are having public "Karen" meltdowns and mental health episodes are not struggling with money. In fact, many are well off, even upper middle class.


Remember, many celebrity children and children of multimillionaires have suffered tragic fates, from drug overdoses to DUIs to being disowned by their families. If net worth is a measure of success, and these people have millions, why are they having such serious issues? Shouldn't they be able to afford the best therapists, counselors, medicines, and interventions available?


So as you can see there is more than meets the eye when it comes to net worth. Wellness, both physically and mentally, is paramount. Having good relationships, doing meaningful work for your community and family, and being selfless are all aspects of a well-rounded human with a rich "self-worth". But in case you want to know more about why so many people post net-worth updates, read on my frugal friends!


What are "Net Worth Updates"?


You may have seen those charts that show net worth by age, used by many as a social ruler to make them either feel better about their own position in comparison to their peers or feel inferior and use it as motivation to improve. Especially with the "net worth by age" lists.


Net worth updates typically include a spreadsheet or list of the author's assets (cash, investments real estate) less their debts (mortgage, car loans, student loans). Mint.com has a great tool to look at your net worth over time, and how it changes over time, broken down by each account you have linked.


Why They Matter:


Net worth updates are crucial to understanding where you stand, financially speaking. If you have a negative or very low net worth, for example, you are at a higher risk of defaulting on your loans, falling into high-interest debt, and being subject to late fees, fines, and penalties.


If you have a higher net worth, you can probably plan your life out better. You can maybe take a sabbatical from work, leave an oppressive job, or take a trip with friends without throwing your plan off track. Use a net worth calculator to take a stab at knowing your number!


Liquid net worth is what really matters in cases like this. You can't exactly transfer the cash in a retirement annuity to pay off your credit card tomorrow, there is more to it than that.


Liquid assets are those which you have ready and easy access to, like cash, and brokerage accounts, after deducting what you own on loans, like your credit cards. That's truly the money you have to use for things like taking a trip, buying a new dishwasher, or making an offer at an auction.


Net worth updates also allow others to compare themselves to each other. Not that we should compare ourselves and feel inadequate because someone has $2 million more than us. The updates, in my view, can provide either validation that working towards FI is possible, as well as create a fire under us that we can get there too.


Many bloggers out there are normal people, just like their readers, in that they have (or had) regular jobs, live in modest homes, and aren't famous. This creates a level of relatability that makes those net worth updates more credible and inspiring. If they started from zero with setbacks, what's stopped you from getting to their level?


When to be Skeptical:


Back in the day, before the FIRE movement was well known and smartphones were in their early years, people used to "estimate" one's net worth by the fancy cars, homes jewelry, and other "assets" of the celebrities and our friends.


Well, we know now that wealth is what you don't see. The money in the bank, the trusts, the investment accounts, etc. Those are the people with a healthy net worth ratio. They are the ones with freedom, security, and options.


However, if you see people adding in home equity based on Zillow, estimated "business equity" and "expected inheritance" these are flags that the person may not be as credible.


The net worth of a company is not the same as the net worth of an individual or a family. And the fact that people count their inheritance as part of their net worth is beyond me. Is that money they can spend today? How do they know they will even get it?


Those who are credible are the ones who create consistent and transparent spreadsheets and graphs, the ones who don't count the value of their minivan, and the ones who are humble about home equity if they even include it at all.


What I've learned is that it's better to underestimate than overestimate, because then when you hit your number, you'll realize you have a buffer when the market swings.


Remember, if you want to get ahead the first thing you need to do is determine where you are, and where you are starting from. And that number is your net worth. When people ask "What's your number?" They might be trying to ask what's your target liquid net worth because that's what you can actually spend.


Net worth is just one tool in your kit though. Use these net worth updates with caution, and try to learn the story behind the numbers. Did they dollar cost average into ETFs? Focus on building a business? Rent out short-term rentals? Find someone you can relate to and who is candid, so you can use their updates as motivation on your own journey to FI.

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