The Frugal Hackers Net Worth Tracker

Are you ready for some number crunching?

Are you ready for some number crunching?

When we started this blog, we felt it was important to be brutally transparent about our finances. We're not here to brag, we're not here to show-off; we're here to break the financial taboos surrounding money, and show people the best hacks to use money to improve your life, meaningfully. To that end, we share our net worth online via our net worth tracker. We keep this page updated once or twice a month via a spreadsheet we maintain.

Why is it so important to track your net worth?

Here at Frugal Hackers HQ, we believe there should be a certain order in which you should focus on things in life after graduation. The order is in decreasing order of long-term dividends paid out to yourself. First you focus on getting rid of your debts and getting out of the habit of acquiring new ones, then you focus on what you eat (i.e. food & nutrition), then you focus on your fitness, i.e. physical and mental health. Once those are out of the way, you move on to your personal finances, and then eventually you focus on frugality and financial independence.

Mrs. Frugal Hacker and I are on the last part of that journey, focusing on financial independence. This is the longest part of the journey and can easily take more than a decade. But we believe the journey and destination is well worth the effort invested. Your net worth is crucial to determining how close you are to financial independence. Projecting your net worth into the future keeps you grounded, but also keeps you motivated in achieving that lofty goal.

"If you don't measure it, you can't improve it."

We track our net worth religiously month-over-month. Online tools such as Personal Capital and Wealthfront can do this for you for free, but what they're missing is the power of projecting your net worth into the future by assuming your life will carry on the same without any significant changes or expenses. This projection is vital in determining when you will reach the holy grail of personal finance, i.e. financial independence. Once you've reached financial independence, you can officially start your 2nd Act in life and that's when things become really interesting. Money drives so much of people's time and decisions, so once you remove money out of the equation, things start to take a dramatic turn for the better.

There is a tool on Wealthfront known as Path but this bakes in assumptions that you can't change. Every person's situation is unique and so a spreadsheet is the only way to take control and apply your specific case.

A template to track your own Net Worth

Our new condo (not in the woods). Those are our own photos on the wall.

We created a template from our own net worth tracker spreadsheet that you can copy and use for your own calculations. The template is a simplified version of our own net worth. In Jun 2016, we pumped all of our savings into buying a beautiful 3-br condo in San Francisco. The condo costed us $850k and we put down 20% of it, i.e. $170k. We also had $20k remaining in our emergency fund. Our net worth was therefore $170k + $20k = $190k. Every month we save about $11.5k (72% of our post-tax income). This money goes into 4 separate accounts: Wealthfront, Vanguard, 401(k) via Fidelity, and backdoor contributions to our Roth IRA, also on Vanguard.

How does the template work?

The inputs are defined on the first sheet (Net Worth Tracker). The calculations and formulas are defined on the second sheet (Calculations).

You just need to enter your own inputs for what your expected annual returns will be, your expected inflation rate, your monthly contributions, and your mortgage interest rate. We assume all investment accounts appreciate at the annual interest rate provided by you (first input cell). We also assume your house appreciates modestly with the inflation rate provided by you. We require your mortgage period to figure out your amortization schedule, to see how quickly you're paying off your principal balance.

If you don't have a mortgage or a certain account (like an IRA), just delete those corresponding columns on the 2nd sheet.

There are two horizontal lines on the generated net worth chart. The first (lower) one is when you will reach a 4% withdrawal rate. Congrats, you have officially reached financial independence. This is your required goal. The second, higher horizontal line is when you will reach a 3% withdrawal rate. This will be your stretch goal or ideal goal. At 3%, you are a guru of financial independence and are basically untouchable if you can hold your standard of living steady without any financial creep. At a 3% withdrawal rate, the risk of you outliving your portfolio for the next 40-50 years becomes less than 1%. With even very mediocre part-time or side-hustle income to supplement your retirement, you could probably get your portfolio to last indefinitely.

How to use the spreadsheet

On the 1st of every month, you replace the auto-generated row on the 2nd sheet (Calculations tab) with actual numbers from your respective accounts. Personal Capital gives you these numbers in a single place, so it's easy to copy + paste them into the spreadsheet. Once everything is updated, your actual net worth should also update. If you look at the chart, you can now see how you're doing relative to your projections, and how close you are to reaching financial independence.

You can also right-click on the chart and copy the embed HTML which you can then past on your blog to produce a real-time interactive graph of your net worth like we've done here. It's incredibly powerful to see how your actual net worth gets closer and closer to the 4% withdrawal rate line over time. You can also modify your monthly savings number and see how this gets you to your 4% goal sooner.



In our own personal scenario, if we simply just keep showing up to our jobs everyday and keep our expenses roughly the same without any creep, we will inevitably reach financial independence in roughly 2 years and 9 months from now (May 2020). This is without any raises, bonuses, real-estate appreciation, or employee stock liquidity from our respective companies. At this point we can quit our jobs and move back to Canada, or we can keep working and reach our stretch goal of a 3% withdrawal rate in just another 1.3 years (the power of compounding!). In all likelihood, we will probably keep working until we hit some chosen withdrawal rate number in between, perhaps 3.6% or 3.7%.

We hope you find our Frugal Hackers Net Worth Spreadsheet Template useful. We definitely rely on it tremendously to keep track of our progress every month. The chart moves slowly but surely. Without knowing our progress regularly, it is difficult to remain motivated to maintain such a high savings rate. Also, we sleep peacefully at night everyday by knowing our future finances are already planned out for us, and that maintaining our financial status quo will inevitably take us to a beautiful place in life within a reasonable timeframe. All we need to do now is to let time play it out for us.

Comment below to let us know how this template can be improved and more helpful.

Mr. Frugal Hacker

San Francisco, CA

Born in India. Grew up in Dubai for 15 years. Studied and lived in Canada for 8 years. Backpacked in Europe for 2 months. Lived in Toronto for 1.5 years. Working in San Francisco for the past 4 years. Runner, cyclist, software engineer.