Illiquid Assets

[imoldernu]

No story to go along with this... simply a wide open question about those assets that don't show up on your balance sheets. Those things that have value, but don't usually get into the calculations of net worth.... Oh yeah... maybe they do!

So...? Do you count house furniture, or stamp collections, bicycles, antiques, objets d'art, boats, tools, electronics... and you get the idea.. just look around the room you're in and count up the dollars spent.

Instead of posing questions to be answered, do you have any thoughts about the illiquid assets?

Quote:

DEFINITION of 'Illiquid' The state of a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value. Illiquid assets also cannot be sold quickly because of a lack of ready and willing investors or speculators to purchase the asset.

[Tadpole]

I figure my net worth is something for my executor to worry about. If they start means testing entitlements, I'll start to worry about what is and what isn't an asset for purposes of clawbacks.

[calmloki]

We are probably at about 1/3 illiquid assets - our rental properties. and they are viewed, charitably, as a forced savings account. If we can't easily sell something we are forced to save it - the more we are forced to save the bigger the net worth.

[mystang52]

As I see it, I can't go to the supermarket and walk out with groceries because I have a lot of illiquid assets. So, I do not count them. I agree with Tadpole that it's an issue only for my survivors.

[HFWR]

Other than the assorted clutter around my house, I do not own, nor do I want to own, illiquid assets.

[ejman]

I totally ignore all illiquid assets. In calculating my NW I add up the value of assets that are valued daily (mutual funds in my case) and a very conservative estimate for my house, That's it. I agree that everything else is something for the executors to worry about.

[REWahoo]

Oh boy, another "How do you calculate net worth?" thread.

[MichaelB]

Liquid assets for me. Preferable distilled, although fermented and brewed also have a place.

[ejman]

Quote:

Originally Posted by REWahoo Oh boy, another "How do you calculate net worth?" thread.

Your comment made me enter the Query "how do you calculate NW" in the search box. I get a total of 7,296 threads - I guess a couple of weeks of reading ought to settle this right up

[hnzw_rui]

Quote:

Originally Posted by MichaelB Liquid assets for me. Preferable distilled, although fermented and brewed also have a place.

Lol.

[Mulligan]

A large majority of my individual stock holdings are considered illiquid and I count them. My house is illiquid and I don't count it. Do not try to get me to explain the logic behind this reasoning as there is none...


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[2017ish]

Quote:

Originally Posted by MichaelB Liquid assets for me. Preferable distilled, although fermented and brewed also have a place.

We have about 1000 of those (fermented)--don't count them though, because they are the epitome of a wasting asset! (Do terrible things to our cash flow as we replace them; once we retire, that'll be one area of potential cost cutting, I guess.....)

[bingybear]

Quote:

Originally Posted by imoldernu No story to go along with this... simply a wide open question about those assets that don't show up on your balance sheets. Those things that have value, but don't usually get into the calculations of net worth.... Oh yeah... maybe they do! So...? Do you count house furniture, or stamp collections, bicycles, antiques, objets d'art, boats, tools, electronics... and you get the idea.. just look around the room you're in and count up the dollars spent. Instead of posing questions to be answered, do you have any thoughts about the illiquid assets?

I only do my investable assets.... bonds, stocks,MF, etfs, CD, bank accounts. I ignore my house, boats, cars, motorcycles, etc.

If you were to try to include the less liquid assets.. use a quick sale model. Say you have a bicycle that you paid $2k for and it is in real good shape... but a couple years old... so maybe $500.. or less... or use quick auction values.

If you are using this NW value to plan your retirement.... skip all these unless you plan on selling them... soon. They me be more of an expense item... remember a boat is a hole in the water that you throw money into. So be careful on what is an asset or a liability. I have a sailboat... costs me to store it, insure it, register/license it, get a new sail, and take proper care of it. It has a value if I sell it... and an expense if I don't.

Take the art or stamp collection... get two different appraisals.... one for insurance value and one for quick sale. You may be surprised at the difference.