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moneysense.ca, 10/12/05
Financial Goals for 2006: Net Worth
It is already December and time to start setting financial goals for 2006. I believe that our net worth should grow every year and double every five years and taking into account our personal situation, my net worth goal for 2006 is:
Increase our household net worth by 15%
Historically, our net worth growth has been a bit uneven, owing to the cash-value of the stock options at one my previous employers.
2001: 190%
2002: -35%
2003: 115%
2004: 25%
2005: 22%
CAGR: 38%
It is getting harder and harder to significantly grow our net worth, which is now a nice multiple of our annual household income. A good percentage of our net worth growth is now driven by gains in our portfolio, which makes it difficult to set goals. If stocks do well in 2006, we should be able to easily achieve our goal.
moneysense.ca, 10/12/05
Goals are good. Most people don’t achieve anything without one.
In looking at your goal-setting I was wondering – do you include increases in the market value of your home (less mortgage debt) in your net worth calculations and targeted annual gains?
Yes, I use a conservative estimate of home price appreciation in my net worth calculation. I also depreciate the value of vehicles every year.