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Networth IQ Comments

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A few months ago the guys who started Networth IQ (mentioned in an article with me in the New York Times) approached me to put the net worth I track on my blog into their website. As long as it doesn’t require an unreasonable number of hours (and sometimes even if it does) and it is a reasonable request, I’ll gladly lend a hand, especially to fellow personal finance bloggers (a term I use loosely) out there. Anyway, back when I signed up I had a few reservations with a system like this…

If you look at any unaudited sites, invariably you’ll get unreasonable and outlandish information posted that just wreaks havoc on your site. It’s probably been studied ad infinitum and it’s a problem that I think is beginning to appear on their site. For example, check out their list of their top five Net Worth’s:
1. oo1 – $241.8M, under 25. (last update Aug)
2. King – $33.7M, 25-29. (last update Aug)
3. Barneyrubble22 – $33.6M, 40-44. (last update Aug)
4. mm48 – $19.8M, 55-59. (last update July)
5. pontex1 – $13.5M, 50-54. (last update Aug)

I’m not saying any of them are lying but to believe oo1 has $241M, is under 25, has a masters, professional, and doctoral degree and a $250k+ income in the field of Education, Training & Library Sciences may be a little much. It led at least one user of Networth IQ to wonder if this guy/girl was for real. No one else in Education, Training & Library Sciences makes over $200k and no one has a net worth of over 1.5M. No one under 25 has over half a million in net worth (link).

Another problem is that the net worth categories aren’t either clearly defined or the concept of calculating net worth isn’t touched upon enough. Check out poor mandym, net worth of -$414k, but that’s because she has a $400k mortgage but no offsetting value in real estate to equal it (unless she has a $400k mortgage on a home worth only $100k, something I doubt because banks won’t lend you money like that).

What is the solution?
1. Unless your net worth is up to date (within a month), you shouldn’t appear on the homepage. I would suspect that oo1, after getting excited at being featured on a website, probably doesn’t check it anymore and it’s of no interest. If oo1 doesn’t update it then drop them from the front page.
2. Unless your net worth is up to date (within two months), you shouldn’t appear in any of the lists such as age, profession, industry, salary, etc.
3. Add some more guidance (or make it more explicit) on how net worth is calculated, what the categories are supposed to represent, and common mistakes people make. I bet if Mandym really knew that her net worth wasn’t so far under water she might even feel better about it.

I think the guys at Net Worth IQ have a really interesting idea and I fully support it. They are very receptive to new ideas and new criticisms (they are already aware of and addressing the bogus entry issue). If you haven’t used their system, I do suggest you try it (it’s quick, painless, and anonymous) and give them feedback on it.

{ 4 comments, please add your thoughts now! }

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4 Responses to “Networth IQ Comments”

  1. Rick says:

    I totally agree. I went and checked out their site after seeing it used in your blog. I like it, but noticed the same exact problems.

    I will still use it as I think that it is a neat idea. Maybe they should send out an update reminder at the end of every month to update the info so people don’t forget about it or lag behind.


  2. Jim – Thanks, this is great feedback. We appreciate your honesty. The top net worth list is going away in the next release (to be replaced by recent entries), and some more guidance will be added so that will hopefully solve a couple issues. I don’t think we want to remove users off of the listings for inactivity quite yet, but it is a very interesting idea for gauging the seriousness (and validity) of users, and something we hadn’t considered. Maybe after six months or even a year, but as much as we’d love to have people updating it every month, we can’t really expect it. Updating it quarterly, semi-annually, or annually adds a lot of value to the comparisions, IMO. We’ll think about what we can do in this area. Initially, we’ll probably go ahead and remove some questionable ones, and add a verification step to the sign-up.

    Rick – Thanks for sticking with us. We’ve been kicking around the reminder idea. In theory this was supposed to be done in the monthyly newsletter, but we haven’t been the best at getting that out every month, and receiving the newsletter is optionsal, so a simple reminder would probably be more effective.

  3. jim says:

    Glad to hear the comments were taken well, I figured I’d mention my thoughts and give you guys a little bit of “publicity.” If nothing else, you got Rick signed up. 🙂

    I think you guys at NetworthIQ are doing a great job and the problems you face are systemic to any site where there is no way to audit people’s entries. Perhaps you could add something in which people indicate how often they intend to update (be it monthly, quarterly, or yearly) so you know if someone’s fallen behind or if they only meant to update it quarterly (which is a reasonable interval). Perhaps an email to remind them would be a possibility (if they request it)?

  4. Neo says:

    I recently started graphing the net worth for various PF bloggers (with the help of Personal Finance Advice), I would be interested in including yours if you would like. To get you up to date, please send over your net worth data for the past four months.

    [link removed because it’s dead]


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