As I mentioned in the last post, you can download my free Net Worth Calculator spreadsheet as my thank you for subscribing to my RSS feed. Simply click on the orange or blue feed button and follow the prompts. Once inside my feed, click on the download link for the Net Worth Calculator at the bottom of each entry.

Once you’ve had a chance to play around with the spreadsheet, I thought I’d explore some unconventional ways to put it to work.

**Scenario #1**

You got out of the military in January 1996 and began a civilian career. At the time, you had saved $18,500. After more than a decade at two different companies and steady pay raises, you’ve accumulated a nest egg of $135,000. At what percentage has your net worth grown?

Enter the following data.

CIR: 15% to start -you will be bracketing to find the answer

SY: 1996

SNW: $18,500

ITR: 0% because you are seeking a historical answer to growth that has already been taxed.

ASC: $0 because you are seeking a historical answer to growth that has already been saved.

Since 15% only generates $98,980 by the start of 2008, you will have to bracket the interest rate, entering a logical progression of numbers until the value at the start of 2008 reaches approximately $135,000. The answer, within the limits of the spreadsheet, is 18.014%

**Scenario #2**

You like your current job, despite its nonexistent salary growth. Given your situation, it’s unrealistic to save any further. You are comfortable with learning how to invest better but is it really worth the effort?

You’ve got $16,000 tucked away in a Roth IRA earning 6%. You could either:

- Look for a job that pays $1,000 more per year. However in your field, those jobs are more demanding time wise and less enjoyable. It would mean that after taxes in the 15 % tax bracket, you could faithfully add $850 yearly to your retirement funds.
- Stay put with less work stress and direct that energy to improving your investment returns by 4% points per year. Considering how much of your Roth is currently in a money market account, becoming more comfortable with stock mutual funds might do the trick. In 5 years, what is the money difference?

Enter the following data for keeping the old job.

CIR: 10%

SY: 2008

SNW: $16,000

ITR: 0% since funds are tax protected in a Roth IRA

ASC: $0 since staying put means no added savings

Final results at 12% in 5 years = $28,197

Enter the following data for taking the new job.

CIR: 6%

SY: 2008

SNW: $16,000

ITR: 0% since funds are tax protected in a Roth IRA

ASC: $850 – I’m assuming the individual is in the 15% tax bracket and if he has $1,000 extra gross income, he will have an extra $850 after taxes available to deposit in the Roth IRA

Final results at the start of 2013:

Stay put in old job: $25,768

Take the new job: $26,203

Better, but maybe not enough to justify losing the more satisfying job.

Of course there are no guarantees. The point is to play around with the options and and see how the math works. Our happy employee might even do better than 10% as investing skills improve. You never know.

**Scenario #3**

You are planning to get married in 2010. By combining households, the two of you will easily cover your remaining debt load with some money to spare. You can actually start thinking about starting a nest egg. After doing some basic math, you should have $2,000 to start the marriage and after taxes you’re pretty sure you can save $4,000 a year given what you expect your combined salaries and expenses to be.

Since you are young and love to dream big, you’re shooting for a 15% return. If you succeed, what will your nest egg be worth in a decade? You are in the 28% tax bracket, but figure only a quarter of any year’s growth will be vulnerable to the IRS.

Enter the following data.

CIR: 15%

SY: 2010

SNW: $2,000

ITR: 7% since that is a quarter of 28%

ASC: $4,000

Final Results: at the start of 2021, you will have $100,337. Congratulations!

**Scenario #4**

When you graduate in June, your favorite uncle is gifting you $5,000 in stock and has promised to pay any tax obligation in the year of the transfer if you promise not to sell a single share for 20 years. He wants you to have a solid start in life. The stock has done well in the past and seems like a standard bearer for any new stock portfolio.

For now, you don’t want to think about your looming mountain of student loan debt. You want to see how that $5,000 might grow. It won’t reflect your total net worth picture since you’re ignoring the debt side, but that’s OK. The net worth police are not going to arrest you.

Right now you need a break from thinking about those student loans. It is too depressing. Thanks to your Uncle, how much can $5,000 grow to at 12% over twenty years? What about 17%?

Enter the following data.

CIR: 12%

SY: 2009 – since half of 2008 will be gone, the spreadsheet assumes a full year to compound

SNW: $5,000

ITR: 0% since you’ve promised your Uncle you won’t sell for 20 years

ASC: $0

Repeat with 17% instead of 12%

End result in the year 2029: 12% =$48,231 17%=$115,528

**Scenario #5**

Who cares about realism! How big of a number can you get before the spreadsheet runs out of locked width.

Enter the following data.

CIR 88.36%

SY: 2008

SNW: $1,000

ITR: 0% – It’s my fantasy, don’t knock it.

ASC: $0 – I’m spending any extra income while the money grows.

Final Results:

$99 Trillion, 895 Billion, 809 Million, 571 Thousand, 558

That’s enough money for anyone.