Net Worth Revision

Basically just a really quick post to say that I revised the net worth I reported back in Q1 2014. I overvalued our cars by $3,000. Apparently even cheapo used cars still depreciate quite a bit. I didn’t realize this until I was exploring a potential car purchase and immediately dismissed it when I realized just how far my van had fallen in value (from $5,500 to $2,500).

I’m not wild about including depreciating assets in our NW sheet at all, so I may just depreciate the vehicle fleet out by $500 each quarter and then stop reporting it at all.

Just want to be transparent. I was going to change this for Q2’s report, but after debating back and forth for a few weeks I decided to revise Q1 and then start the semi-artificial depreciation in Q2.

Original reported NW: -$12,305

Revised NW: -$15,305

This still represents a gain of $13,643 in a single quarter. I’m still quite optimistic we’ll hit zero (hey, newborn baby NW!) by the end of 2014. Originally I thought this wouldn’t be possible until 2015 at the earliest.

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2 Comments on “Net Worth Revision”

  1. That’s a heck of an accomplishment anyway! What do you use to value your car? Kelley Blue Book? I just estimate mine to be worth about as much in parts as it’s worth altogether since they told me last summer it was $600 for a new alternator or I could get $500 for it on trade! I had a warranty, so the repair was the right call, but still.

    • David says:

      In my market, fair value usually is a tick below KBB’s private party value, since many independent dealers undercut that (all of the cars I’ve bought have been from dealers, and usually at least $500 below private party). Never, ever pay the dealer price. Ever.

      $600 for an alternator sounds like a rip-off, FYI. Usually it’s $150ish for the part and about 1 hour of labor for a shadetree mechanic like myself.


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