Target Net Worth - How We Do

Better methods to find out if you are on target

In our introductory post earlier this week, we laid out the basics of target net worth and some of the common recommended ways to calculate it.

However, we talked about the downsides of these other methods - namely they ignore your past income and your future personal retirement target.

But as we said, there are much better methods.

This paid post will show you how we calculate a target net worth to ensure we are on track to hit our goals.

A Better Target Net Worth

We have 2 approaches to get you a net worth target. One is prospective (forward-looking) and the other is retrospective (backwards-looking). This is a bit more complicated than the calculation for the masses, but, it will be the most accurate way to judge your progress so far and if you are on track.

If you aren’t familiar with discounting, present values, and future values, then take a few mins and read about the time value of money. The concept isn’t hard, but it is sorely lacking in most people’s educational experience.

Serious, read about time value of money….

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Allright, so the best way to calculate a net worth target is to do both of the following: