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Author Topic: Net Worth  (Read 21151 times)

santoshlv426

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Net Worth
« on: June 27, 2017, 02:55:29 pm »
There's a lot of info on this forum, with each person or couple in a unique financial space. I'd start a survey  if I knew how, but I would like to suggest that we - anonymously - survey Net Worth vs. Age & Occupation.

For someone like myself, 40 years old and have been unemployed for 2 years now, my Net worth is nearing a figure not worth mentioning.

But if my situation was anything normal, where should I be in terms of Net worth in relation to my age group ?

Or maybe a few replies to this post would be good and give us seeking similar advice an idea
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jaDEB

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Re: Net Worth
« Reply #1 on: June 27, 2017, 04:39:25 pm »
I for 1 will be to embarrassed to say my net worth ...  :whistle:
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santoshlv426

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Re: Net Worth
« Reply #2 on: June 27, 2017, 04:47:18 pm »
Will put us to shame !
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joeman

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Re: Net Worth
« Reply #3 on: June 28, 2017, 11:06:55 am »
I think it's a fantastic idea. And hopefully results won't be shown until at least 100 people participate. I'd happily volunteer to analyse the results from the data as I have a stats background.
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MoneyChief

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Re: Net Worth
« Reply #4 on: June 28, 2017, 12:05:13 pm »
Well, according to Payscale, the average South African earns the following salaries:

Less than 1 year experience: R135k
1 to 4 years experience: R154k
5 to 9 years experience: R231k
10 to 19 years experience: R293k
more than 20 years experience: R356k

Taking these numbers and assuming a savings rate of 20% and the ability to grow your assets by 10% a year, your projected net worth for the number of years working should be:

Year   Net worth
0   R0
1   R27,000
2   R58,300
3   R94,330
4   R135,563
5   R182,519
6   R238,371
7   R304,008
8   R380,409
9   R468,650
10   R569,915
11   R682,107
12   R806,317
13   R943,749
14   R1,095,724
15   R1,263,696
16   R1,449,266
17   R1,654,193
18   R1,880,412
19   R2,130,053

If your net worth is above the average numbers you are doing well.
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santoshlv426

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Re: Net Worth
« Reply #5 on: June 28, 2017, 01:00:17 pm »
I wouldn't work on the published payscale numbers. Clearly many of the guys on this forum for example have 2-5x that of R2M at retirment or more.

@ Joe, that would be great, but it's getting the info - I don't know how to set it up on this site, except viewing the responses and manually collating the data.

If people respond, I'll track collate and we can work together.
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gcr

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Re: Net Worth
« Reply #6 on: June 28, 2017, 02:44:12 pm »
I am not quite sure what the objective is with this survey - is it to determine the wealth of the respondent at a given age?, or is it to determine the potential wealth within the frame work of the respondents job class?. Also once you have concluded the survey how will the data be used - to drive readers of the survey into a particular job family? or to sit back and hope that at a given age they should be able to enjoy a given wealth. As an example in my company which I worked for your primary earning years are between ages 38 and 54 - beyond that age you are a target for low increases, and/or retrenchment because you cost to company is excessive, especially in a deflating economy, and where the company is looking to ways and means to reduce staff costs to company, and they will always focus on senior management and the level below that because that's where the costs are, they never target the ranks above senior management, because that would be disruptive to spans of control and other emoluments that these guys enjoy.
So my advice would be consider very carefully what you expect your outcomes to be and then how they should be interpreted, further ensure that your survey questions are unambiguous, not open to interpretation and can't be massaged
Have fun with the compilation   
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Hamster

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Re: Net Worth
« Reply #7 on: June 28, 2017, 02:51:29 pm »
Quote from: MoneyChief on June 28, 2017, 12:05:13 pm
Well, according to Payscale, the average South African earns the following salaries:

Less than 1 year experience: R135k
1 to 4 years experience: R154k
5 to 9 years experience: R231k
10 to 19 years experience: R293k
more than 20 years experience: R356k

Taking these numbers and assuming a savings rate of 20% and the ability to grow your assets by 10% a year, your projected net worth for the number of years working should be:

Year   Net worth
0   R0
1   R27,000
2   R58,300
3   R94,330
4   R135,563
5   R182,519
6   R238,371
7   R304,008
8   R380,409
9   R468,650
10   R569,915
11   R682,107
12   R806,317
13   R943,749
14   R1,095,724
15   R1,263,696
16   R1,449,266
17   R1,654,193
18   R1,880,412
19   R2,130,053

If your net worth is above the average numbers you are doing well.

Those numbers are unrealistic considering one doesn't start out debt free and need a car etc. At age 40, with 19 years of experience, your gross is R30k and take home just over R24k. That person probably has one or two kids, school fees, a bond/rent, health insurance for the whole family, food, fuel etc. - it'll be hard to take 20%/R6k and save it.

EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.
« Last Edit: June 28, 2017, 02:54:01 pm by Hamster »
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MoneyChief

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Re: Net Worth
« Reply #8 on: June 28, 2017, 03:36:54 pm »
Quote from: Hamster on June 28, 2017, 02:51:29 pm
EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.

Surely your pension fund is part of your net worth calculation.
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gcr

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Re: Net Worth
« Reply #9 on: June 28, 2017, 04:06:43 pm »
Quote from: MoneyChief on June 28, 2017, 03:36:54 pm
Quote from: Hamster on June 28, 2017, 02:51:29 pm
EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.

Surely your pension fund is part of your net worth calculation.
MC - not sure what your argument is 1)whether no provision out of gross is recorded as a contribution towards a pension, or 2) a pension payment ex employer is part of ones overall wealth. If 2 then I don't consider it as part of ones wealth as it is in the same realm as a monthly salary and there would only be a portion which would contribute towards your wealth if you set aside a portion and invested it. Also I am not sure how you would factor in ones salary/pension future value as part of your future wealth - the reserving of a portion would contribute to wealth creation, but, the future value of salary/pension should be excluded 
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Hamster

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Re: Net Worth
« Reply #10 on: June 28, 2017, 04:32:06 pm »
Quote from: MoneyChief on June 28, 2017, 03:36:54 pm
Quote from: Hamster on June 28, 2017, 02:51:29 pm
EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.

Surely your pension fund is part of your net worth calculation.
I meant that if the average person doesn't have a pension "forced" on him he'll most likely not save that much at all.
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MoneyChief

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Re: Net Worth
« Reply #11 on: June 28, 2017, 04:39:32 pm »
Quote from: gcr on June 28, 2017, 04:06:43 pm
Quote from: MoneyChief on June 28, 2017, 03:36:54 pm
Quote from: Hamster on June 28, 2017, 02:51:29 pm
EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.

Surely your pension fund is part of your net worth calculation.
MC - not sure what your argument is 1)whether no provision out of gross is recorded as a contribution towards a pension, or 2) a pension payment ex employer is part of ones overall wealth. If 2 then I don't consider it as part of ones wealth as it is in the same realm as a monthly salary and there would only be a portion which would contribute towards your wealth if you set aside a portion and invested it. Also I am not sure how you would factor in ones salary/pension future value as part of your future wealth - the reserving of a portion would contribute to wealth creation, but, the future value of salary/pension should be excluded

My point is that money saved in your pension fund is part of your net worth. If you contribute 20% a month to your pension, you are saving 20% essentially. I don't think we should make this stuff too complicated.

A person with R1m in their pension fund and nothing else is better off than a person with nothing at all.
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gcr

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Re: Net Worth
« Reply #12 on: June 28, 2017, 06:41:30 pm »
Quote from: MoneyChief on June 28, 2017, 04:39:32 pm
Quote from: gcr on June 28, 2017, 04:06:43 pm
Quote from: MoneyChief on June 28, 2017, 03:36:54 pm
Quote from: Hamster on June 28, 2017, 02:51:29 pm
EDIT: assuming that the average person is not money savvy and have no pension fund forced on him over his 20 years of working.

Surely your pension fund is part of your net worth calculation.
MC - not sure what your argument is 1)whether no provision out of gross is recorded as a contribution towards a pension, or 2) a pension payment ex employer is part of ones overall wealth. If 2 then I don't consider it as part of ones wealth as it is in the same realm as a monthly salary and there would only be a portion which would contribute towards your wealth if you set aside a portion and invested it. Also I am not sure how you would factor in ones salary/pension future value as part of your future wealth - the reserving of a portion would contribute to wealth creation, but, the future value of salary/pension should be excluded

My point is that money saved in your pension fund is part of your net worth. If you contribute 20% a month to your pension, you are saving 20% essentially. I don't think we should make this stuff too complicated.

A person with R1m in their pension fund and nothing else is better off than a person with nothing at all.
MC - I hear you, but, also don't want to labour the point but if you take ones pension present and future value into account then you might as well add future values to your Living Annuities (provided your draw down is less than 5%) and the future market value of your house (s) less any outstanding bond. Maybe I determine wealth differently 
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Patrick

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Re: Net Worth
« Reply #13 on: June 28, 2017, 07:37:03 pm »
I like the idea of a quick survey. If we have just a few questions we can use survey monkey. I'll happily promote it in my next blog post. What we need to do is define the questions. We can use a dropdown for age, and need to do the same for occupation, though we'll need quite general categories for that. For net worth if we work in actual whole numbers we don't need to worry about the categories. Any other thoughts?
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Hamster

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Re: Net Worth
« Reply #14 on: June 29, 2017, 04:35:13 am »
That sounds good to me
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