As featured in The Wall Street Journal, Money Magazine, and more!

June 2007

A reader recently posed this question to Consumerism Commentary:

Are clothes a part of net worth?

In May, I wrote about how to calculate your net worth. Technically, your net worth includes the value of everything you own subtracted by everything you owe. Your wardrobe, shoes, furniture, coin collection, car(s) if you have one, house(s) if you have one or more, are all included in the own category, called “assets.” Your loans, mortgages, credit card balnces, and immediate tax liability if your assets are liquidated fall into the owe category, called “liabilities.”

Your teenage children, while most likely a burden, should not be considered liabilities nor assets — at least not in this country.

Now there’s probably little value in tracking the value of your clothing or shoes from month to month or year to year. Including them in your calculation doesn’t add much useful information if you’re just trying to track your financial progress. For a meaningful calculation, leave them out — but then don’t call your total at the bottom your “net worth,” at least not to other people. Call it whatever you want on your own, but the term, “net worth” has a singular definition among most people and can cause confusion if you use that term to describe your customized calculation.

This doesn’t answer the question of how to include your clothing in a net worth calculation. What you are trying to determine is the price you clothes would fetch if you had to sell them, which is likely an amount well shy of how much you paid. A best guess would probably suffice, and I would hope that this is a situation no one would have to face.

This reminds me, I should revise my future monthly financial reports just so it’s clear I have other assets and liabilities that I don’t include for my own purposes.

Here are some more articles from bloggers about the net worth calculation.

How to Calculate Your Net Worth, here at Consumerism Commentary. “Since the purpose of the calculation isn’t to compare yourself with others, it doesn’t matter what you choose to include as long as you’re consistent each month, and the numbers are meaningful to you.”

Considering Changes to How I Calculate Net Worth, at My Money Blog. “When tracking one’s net worth, whether publicly or privately, I don’t think there is any one “correct” way to do it. People should measure it however they like in order to achieve useful information out of it.”

What’s the Best Way to Calculate Net Worth?, at Free Money Finance. “Personally, I calculate my net worth including the value of my house. But I also know that it’s not a liquid asset that I could convert to cash quickly if I needed to.”

Net Worth vs. Net Investable Assets, at Five Cent Nickel. “I have to admit that I’ve never been a big fan of net worth in its purest form… That is, how much money you’d have if you liquidated all of your investment accounts, withdrew all of your funds from the bank, sold everything that you own that has any value whatsoever, paid off all your debts, and then threw the remainder in a giant pile.”

How to Calculate Your Net Worth, at The Simple Dollar. “Take your total assets and subtract from that your total debt. The resulting number is your net worth.”

Net Worth, Net Investable Assets, and Net Liquid Assets, at Analyzing Wealth. “All of your assets (cash, investments, property, etc.) minus all of your liabilities (loans, revolving debt, etc.). This is a great measurement because it paints the whole picture– how much MONEY do I have? If I sold it all and moved to South Dakota, how much would I be taking with me?”


When I decided that I didn’t want to break my back moving my heavier furniture down one flight and up at least one more, I also decided that I wanted someone else to do that for me. I could have done more research when choosing a moving company, as I was hoping for a recommendation from a friend or co-worker. No one was able to quickly provide any information, so I did what most people do, I checked the Yellow Pages.

I felt I’d be more comfortable going with a national company with name recognition, and my eyes focused on the listing for Two Men and a Truck. I had seen their trucks around before, white with black lettering, and the simplicity of their concept and the student-on-the-cheap attitude invited me to do more research.

Thanks to Epinions, I was able to find out more about the company from past customers’ perspectives. There were, as I would have guessed, many favorable and many unfavorable reviews, with the positive outnumbering the negative. One thing I had to keep in mind is that each office of Two Men and a Truck is independently operated and therefore wildly different experiences would be expected from location to location. There were no reviews for my local office specifically.

I filled out a form online and quickly received a quote. The move would be $120 per hour, plus one hour drive time. They don’t charge by the pound, so there’s no risk of weight fraud. The hourly rate was a little high, but it’s comparable for the area. A move on a Saturday carried a minimum of 4 hours while a Sunday move required 6 hours. To schedule the move on a weekday, the minimum charge would be “only” for two hours. I decided that it would be worth it to work from home a half day and schedule the move on a weekday afternoon.

When I called for more details about the quote, their office manager exteaplained that their crewss were fully booked for the day I scheduled, but they would be able to pull a crew from the North Arlington office — farther away — without any additional travel charge.

On the day of the move — yesterday — I received a call about 30 minutes before their scheduled arrival time. The directions they received from the office were not very good and they were getting lost. I directed them properly and they arrived 15 minutes early. After explaining what I wanted to have moved and filling out the paperwork (liability waiver, etc.), the crew, two men named N. and K., went to work.

They did a decent job protecting my furniture, not that what I have is worth much. I was concerned that they didn’t wrap my mattress in plastic, but once it was lifted onto the truck, they did a good job of protecting it. To my surprise, rather than carrying the lighter items down the stairs outside my old apartment, one man passed items over the balcony to the other.

After the truck was fully loaded, I gave each guy a bottle of water and they followed me to the new apartment. When they arrived, they drove around to reposition the truck and began unloading. During the whole process, the crew was friendly and conversational. They saw my bicycle on the balcony and we talked a little about riding.

As they were finishing up I offered a couple of cans of soda. K. reassembled my dining room table, adding in the leaf, and I did the closing paperwork with N.

The entire process took a little less than the two hour minimum charge, so I’m very pleased with my decision to schedule the move on a weekday, “saving” at least $240. After they were finished, I offered them soda, provided them directions back to the Turnpike, and sent them on their way. The only problem I had was with my entertainment center. I noticed it was scratched up badly after they left. I could just repaint the black shelves, but I probably won’t. The center was passed down to me from a friend, and I’ll likely get rid of it when it’s time to buy a new television.

Here’s the full breakdown of the cost:

2 hours moving time at $120 per hour: $240
1 hour driving time: $120
Tip for two movers: $50
Total: $410
($360 on cash back credit card, $50 in cash)

All in all, it was a good move, and I would recommend them to anyone else in the area who needs to move, keeping in mind that any branch of the office — or any crew — might provide an experience that is not quite as good.


I have limited access to the internet over the next few days, so there may be only sporadic posting on Consumerism Commentary during that time.

I saw Les Christie’s article, Out of Touch With Realty Reality, last night and I found it interesting. If homeowners are convinces that their homes are increasing value even in a general down market, are they out of touch? Or does it even matter?

Most – 55 percent – are confident that their homes continued to increase in value compared with a year ago… The overconfidence of homeowners doesn’t jibe with the findings of most home-price indices, which point to lower median single-family house prices of about 2 percent nationwide.

On what are these 55% basing their conclusions? It is probably not actual sales of their own homes. Perhaps it is sales of similar homes in the neighborhood or community. Could it be just a “gut feeling” based on an innate desire to see their home’s value rise as a human element of pride? The real value only comes to light — despite anyone’s best zestimate — when it is time to sell.

74 percent of the survey respondents said they were confident that they could sell their home within six months at the price they think it’s worth.

Are 74% of the respondents also confident that when it comes time to sell, they will have six months leeway in order to get their best price? People move for a number of reasons, the biggest of which are likely to take advantage of a job transfer, to take care of a loved one, to upgrade to more space for a larger family, or retirement. It seems to me that the only one with six months to spare would be retirement. Families with children often have to move during the summer so the school year is not disturbed.

People move from one house to another for a variety of other reasons, so maybe I’m missing something, but for most families, I think 6 months is a stretch, and if it takes that long to get the “right price,” then it’s not really the right price.

Looking long-term makes homeowners even more optimistic: 85 percent believe their home will rise in value during the next five years, and 63 percent believe a house is a good investment.

Perhaps I fall between the 63% and 85% above. I do believe homes in general will rise in value — and if I owned my apartment rather than rented, I would feel that way about my own — over the medium to long term. But a house as a good investment? Real estate may be a good investment, but the home you live in, not so much. No other kind of investment makes you pay so much into it in order to keep it in good condition.

Many of the survey respondents appeared to feel that bad things happen to other people; 49 percent were concerned that there was a moderately severe impact on the overall U.S. economy from the weakening housing market, and 12 percent said it was not hurting the economy at all.

I’ll never forget one day a few years ago when the brother of my ex-girlfriend explained to me his rationale for buying a house that was likely too expensive for him and his family: house prices always go up. The confidence reminded me of all those people buying into tech stocks in 1997 and 1998. As it turns out, his particular county has continued to see increased through the latest general market downturn, still above inflation, but I can’t find a source. Even still, the party can’t last forever thanks to the killjoy called, “reversion to the mean.”


Over the past few days, I’ve been bringing boxes from my old apartment to my new, and last night, during both trips, I got caught in a downpour. I should be almost completely moved by Munday, after the movers I’ve hired take care of the larger furniture. Here are some interesting articles from other bloggers to read while I’m packing and moving this weekend.

My Thoughts on “Maxed Out.” JLP from AllFinancialMatters viewed the film and has a few things to say about its approach.

Are Investment Newsletters Worth It? Jim from Blueprint for Financial Prosperity and George from Fat Pitch Financials discuss newsletters containing stock tips you see advertised, like the Motley Fool‘s “Hidden Gems.”

Extended Travel Abroad for the Young. While Nickel is on vacation, FiveCentNickel is carrying guest posts, this one by Plonkee of Plonkee Money. Here she writes about her experience as a citizen of the UK traveling abroad.

What to Do When You Inherit Money. Free Money Finance has a quick answer. Bottom line: don’t rush it.

Fixed Rate Mortgage Payments, Inflation and Investing. Mighty Bargain Hunter writes about alternatives to paying down a mortgage. Recently, there was a good discussion here on Consumerism Commentary on the choice between investing or paying off a mortgage.

* No Credit Needed: Managing My Finances Using Firefox, ING Direct, Online Bill Pay, and You Need a Budget
* The Simple Dollar: You Don’t Need Six Figures: The Financial Realities of Living in Iowa
* Get Rich Slowly: The Debt to Pleasure: What is the Cost of Fun?
* The Dough Roller: Holy Cow, Batman! That 0% Credit Card Cost Me 6%!
* Moment on Money: Monte Carlo Simulation is Not a Game
* The Digerati Life: Cheap Ways to Learn and Feed Your Brain

Feel free to send me suggestions for weekly roundups to my tips email box. Have a great weekend!


Cash vs. Credit Card: Gas Stations Charging Different Prices

by Luke Landes

I noticed something disturbing last night. I pulled into my favorite low-cost gas station, which happens to be Valero. It’s my favorite simply because it’s the least expensive in the area and it’s right on my route home from work. Apparently they have begun charging 6 to 8 cents more per gallon for payments with ... Continue reading this article…

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Moving In: Setting Up My Utilities

by Luke Landes

Last week, I called my gas and electricity provider, PSE&G, to transfer my account from my old apartment to the new. The phone system said that I should complete my request online, so that’s what I did. It’s a good thing I called the back earlier this week to verify they had my information. As ... Continue reading this article…

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$250 Bonus for American Express Business Gold Rewards Card

by Luke Landes

Editor’s Note: Thank you for your interest, this offer expired and is no longer available. I just received a notice that the American Express Business Gold Rewards Card has increased its sign-on bonus from $50 to $250. I’ve updated my list of credit cards with bonuses with the new information. The $250 bonus is in ... Continue reading this article…

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Battle of the Riches: Good vs. Evil. Which Side is Money On?

by Luke Landes

In my review of Cash, Cars & College by Janine Bolon, I didn’t mention the author’s thoughts on the nature of money, which she included in the book. To expand on this section, Janine has offered the following guest post. Why Become Wealthy? Believe it or not, I’ve actually been asked this question by a ... Continue reading this article…

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Ben Stein: Invest or Pay Off Mortgage?

by Luke Landes

This is an age-old question. Does it make more financial sense to pay off your mortgage quicker by increasing or adding payments, or to use that extra money and invest in an index fund in the stock market? The simple answer is to choose the option that leaves you with the most money down the ... Continue reading this article…

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The 2nd Anniversary Carnival of Personal Finance: Wow!

by Luke Landes

J.D. from Get Rich Slowly did an awesome job hosting the second anniversary edition of the Carnival of Personal Finance. I particularly like the theme he has chosen — bloggers’ “greatest hits.” Here we have a hundred or so of the articles bloggers have chosen as their favorites from the past two years. This Carnival ... Continue reading this article…

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Review: Cash, Cars & College by Janine Bolon

by Luke Landes

Cash, Cars & College: A Young Person’s Guide to Money Janine Bolon (6/10) When it comes to book reviews, I am usually contacted by the publishers, press agents, or public relations teams. When an author takes the time to email me directly, I pay more attention. I was contacted a few weeks ago by Janine ... Continue reading this article…

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Weekly Blog Roundup, Cleaning and Packing Edition

by Luke Landes

For your reading enjoyment while I clean and pack this weekend, here are some interesting articles from my colleagues in the MoneyBlogNetwork as well as from other personal finance blogs. Would You Drive a Car That Cost Only $2,500 New? Mighty Bargain Hunter wonders if this price point is too low to cover quality engineering, ... Continue reading this article…

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Capital One’s New Breed of Debit Cards: Would You Use It?

by Luke Landes

Capital One has created a new kind of debit card, and the company is hoping it will replace traditional debit cards or even credit cards. This new debit card can be linked to any account at any bank and can be used for purchases or ATM withdrawals. There will be no fees, and Capital One ... Continue reading this article…

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Reader Question: Should I Have a Roth IRA?

by Luke Landes

While I like to answer readers’ questions to the best of my knowledge, please keep in mind that I am not a financial professional. If you have questions, feel free to contact me. Any questions for which I can’t provide a detailed answer, I often just open the conversation up for discussion, as I know ... Continue reading this article…

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Wall Street Journal: Managing Money in Public

by Luke Landes

My former boss at the company I currently work for knows that I have a side interest that involves personal finance and the web. Obviously, I do not supply too many details to him as I prefer to maintain some level of anonymity on Consumerism Commentary, considering the personal information I’ve been posting since 2003. ... Continue reading this article…

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My Struggle: Spending on Food is Really About Motivation

by Luke Landes

Donna Freedman’s MoneyCentral article reminds me of an issue with which I consistently fail each time I’ve made the attempt over the last few years. In the article, the author provides some success stories for those who have saved money by “brown-bagging” their lunch rather than buying each day. Here is one example: “I never ... Continue reading this article…

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Announcement About Carnival of Personal Finance #105

by Luke Landes

Next Monday, Get Rich Slowly will present the second anniversary edition of the Carnival of Personal Finance. To celebrate the occasion, J.D. would like to host the edition differently to celebrate. Here are the details. Get Rich Slowly will host the second anniversary edition of the carnival next Monday. I want to make this one ... Continue reading this article…

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FICO Will Eliminate Common Way to Build Credit

by Luke Landes

One of the most common ways for young people, say teenagers, to build credit is to become an authorized user on one or more of their parents’ credit cards. This way, they immediately have a significant amount of available credit, and by the time they need a credit score after college, they might have a ... Continue reading this article…

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Four Retirement Mistakes, Part One: Early Withdrawal

by Luke Landes

Reminder: So far there has been a very good response to the Consumerism Commentary reader survey. If you have not yet done so, please complete the survey so I can learn about you and improve this blog. Retirement savings compete with day-to-day expenses for your hard-earned money, so it’s a great accomplishment to put anything ... Continue reading this article…

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Credit Cards With Sign-Up Bonuses

by Luke Landes

Editor’s Note: Thank you for your interest, these offers have expired and are no longer available. If you’re a responsible user of credit cards — someone who pays their balance off each month — or if you use credit cards for business purposes, then you may be able to benefit from some of the offers ... Continue reading this article…

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