Net Worth vs Liquid Net Worth

Unless I am going to sell my house and rent upon retirement, I do not see the value of "net worth" including real estate or any other non-liquid asset (classic cars, jewelry, art, etc.) you aren't planning to sell to fund your retirement.

Projection lab makes it easy to toggle between total net worth and liquid net worth. Also, if the shit hits the fan, there are many ways to access retirement accounts (though treated as income) without incurring a penalty if you need to get to it before 59 1/2.

You've already received some good feedback and resources. My only addition is that I am set up to track financial information, categorized into different asset and liability types. It includes columns for:

• Category: Broad classifications of financial items (e.g., Assets, Current; Assets, L/T; Liabilities, L/T).
• Investment Type: More specific types of investments or financial instruments within each category (e.g., Cash, Bonds, Stocks, Real Estate, Debt).
• Account: The specific financial accounts or holdings.
• Value ($): The monetary value of each account.
• Value (%): The percentage of the total value that each account represents.
• Proj Monthly Cash Flow: The estimated monthly cash flow generated or consumed by each item.
• Proj Annual Cash Flow: The estimated annual cash flow generated or consumed by each item.
• % of W2 Income: The percentage of current expenses/W2 income associated with each item.

The spreadsheet provides a comprehensive overview of financial holdings, their distribution, and their associated cash flows and income contributions.

For FI purposes, the cash flow is the most important to me.

I don't find net worth to be a useful metric for the FI journey. What matters to FI and being able to live off your savings is what is able to be liquidated. For example, my home's value is part of my net worth, but I can't sell pieces of my home to cover expenses unless my plan is to sell the whole home and go live somewhere else.

Your retirement accounts are part of your FI number even if you plan to retire before you have access. You would just need to ensure you have enough liquid savings in taxable accounts, cash equivalents and passive income (real estate, etc.) to cover expenses until you can access the retirement accounts.

Milestones can be anything that motivates you. Paying off each credit card. Becoming debt free. Every $50K in investments. Whatever feels motivating. One thing that you might look at tracking is your savings rate because that number influences how quickly you reach FI.

ChooseFI has articles on how to calculate your FI number and also why your savings rate is important.

ChooseFI | How To Calculate FI Number

ChooseFI | How To Calculate Your Savings Rate and Why It's Important

And if you haven't already read MMM's "classic" article on savings rate, here it is.

Mr. Money Mustache | The Shockingly Simple Math Behind Early Retirement

I only track total account sum, not liquid net worth, however, it's something I keep an eye on. Mostly I just want to be sure that I have enough to cover 5 years while I do my initial Roth conversions. This is something I've been thinking about recently as I've been on this path a long time and have suddenly realized that FI is coming relentlessly fast (it snuck up on me). In my case, I likely do not have enough liquid net worth to cover the 5 year gap, so I'm taking a break from hyper optimization for the next year, and just saving into a taxable brokerage. I was going to save into a Roth 401k instead, since I would have access to the contributions, but then I realized that this is probably not worth it. I would rather have more flexibility and access to the gains in addition to contributions. It's purely a function of time and unique to my situation.