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All things equal I consider it more of a success if you earned the majority of your increase off of investment gains vs. savings rate. A savings rate increase just means you worked harder, investment gains means you didn't have to lift a finger and you made money. The latter is a mark of a successful year, IMO.
Not saying I'm rich or anything- far from it. But I've made more progress in the past four years than I made in the previous SEVENTEEN years of my adult life.
The wife and I are finally established in decent careers. Bought a house a few years back... no longer throwing money away on rent. We've been paying down debts, saving, investing... it's a nice change. I'd say our net worth has increased close to 20% this year.
Most of that isn't as liquid as I'd like. The bulk of that is in home equity, reduced student loan balances, and 401k contributions. But still I really like this trend
All things equal I consider it more of a success if you earned the majority of your increase off of investment gains vs. savings rate. A savings rate increase just means you worked harder, investment gains means you didn't have to lift a finger and you made money. The latter is a mark of a successful year, IMO.
I see your point, but what about a huge promotion, raise or bonus? Or new job? Therefore allowing one to significantly pad their savings? IMO, those situations can be game-changers. And, in a way, more tangible (skills, resume-building, etc.)
IDK, I qualify anything (+) as a success
ETA: ahh, now I see you started with "all things being equal"...Yeah, i agree
Person 1: 2014 - 100k net worth 2015 $120k net worth
Person 2: 2014 - 1 million net worth 2015 - 1,020,000 net worth
Both of them gained $20k.
if someone asked "How did you do? give me your dollar net worth change." and they both said "+$20k" do you think that is saying anything?
The numbers still matter at the end of the day. If my 2% is 2mm and your 200% is 200.00 yeah you win the percentage game but it does mean much in reality
Location: Chapel Hill, NC, formerly NoVA and Phila
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Quote:
Originally Posted by wheelsup
All things equal I consider it more of a success if you earned the majority of your increase off of investment gains vs. savings rate. A savings rate increase just means you worked harder, investment gains means you didn't have to lift a finger and you made money. The latter is a mark of a successful year, IMO.
To some degree yes - it means you are successful at investing (or the market had a good year ). On the other hand, some people have a hard time putting money away, spending everything they have. So if they saved more this year, I'd say that is quite successful. It would be nice if we could "earn" all of our wealth through investment gains, but that is more realistic as we age and accumulate a large base of money. In the early years of working, most of our wealth will likely be through savings.
The numbers still matter at the end of the day. If my 2% is 2mm and your 200% is 200.00 yeah you win the percentage game but it does mean much in reality
i dont disagree with that. but a $10,000 person cant expect to get a 1000% increase in his net worth year over year. things just tend to move with percentages. both numbers are going to be more helpful. adding in other information like age and asset mix and whatever are going to be even more informative. but by itself, % does tell us more than any other single data point with regard to the question "how did you do last year."
i dont disagree with that. but a $10,000 person cant expect to get a 1000% increase in his net worth year over year. things just tend to move with percentages. both numbers are going to be more helpful. adding in other information like age and asset mix and whatever are going to be even more informative.
You got it now. Percentage growth isn't linear.
Quote:
Originally Posted by CaptainNJ
but by itself, % does tell us more than any other single data point with regard to the question "how did you do last year."
But this is where you're losing some of us.
Person A had a 2% gain.
Person B had a 2% gain.
Person C had a 2% gain.
What more does this tell us beyond "3 people saw a 2% gain"?
Person A had a 2% gain.
Person B had a 2% gain.
Person C had a 2% gain.
What more does this tell us beyond "3 people saw a 2% gain"?
right off the bat, you can see that they all had relatively little growth. where $10k, $100k and $1 million can all mean very different amounts of growth for different people; 2% always means a little growth. you can also take that 2% number and compare it to the performance of equities/bonds and see how they fared vs the growth of investment indexes. let's take a stock market that is flat, 0% return. so you figure there is a good chance that 2% increase came from additional savings vs additional investment growth. if the market gained 10% that year, you may assume they either have little money invested and/or spent more than they earned or something else.
how about this:
Person A gained $100
Person B gained $1000
Person C gained $100,000
What more does that tell you beyond their individual dollar gains?
I believe this is the third time ive asked you to try to demonstrate why dollar value is better and you totally ignore it. Just admit you were wrong and stop trying to argue over something just because you refuse to admit being wrong.
numberfive, did you know that in nyc in 2014 there were 328 murders and in detroit in 2014 there were only 300 murders? i dont understand why people pretend detroit is dangerous, clearly nyc has a lot more murders.
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