How do YOU figure your Net Worth

glock35ipsc · 12-06-2006, 01:34 PM

It seems everyone has there own way of calculating their net worth. I am not sure if I should be including some things or not, such as vehicles, home equity, jewelry, household items (big ticket things like TV's), collectables, etc?

What is everyone elses opinion? I did some searching first, but didn't come up with anything.....

REWahoo · 12-06-2006, 01:41 PM

This has been a hotly debated topic in the past. Here's a couple of threads:

http://early-retirement.org/forums/i...hp?topic=643.0
http://early-retirement.org/forums/i...p?topic=3219.0

glock35ipsc · 12-06-2006, 01:51 PM

Thank you. It seems like I need to work on my searching abilities!

azanon · 12-06-2006, 02:17 PM

REWahoo,

nice catch and link, but the final thing you should do is close the thread. Mod 101 stuff.

REWahoo · 12-06-2006, 02:35 PM

Quote:

Originally Posted by Azanon

...the final thing you should do is close the thread. Mod 101 stuff.

Thanks for your obviously well-intentioned and helpful suggestion, but I gave up taking troll bait long ago.

brewer12345 · 12-06-2006, 02:40 PM

Quote:

Originally Posted by Azanon

REWahoo,

nice catch and link, but the final thing you should do is close the thread. Mod 101 stuff.

Shut your filthy hole, boy.

shiny · 12-06-2006, 02:59 PM

Quote:

Originally Posted by brewer12345

Shut your filthy hole, boy.

Have you been watching "squidbillies"? Cause we all needs to be respectifying our moderators round here.

brewer12345 · 12-06-2006, 03:02 PM

Quote:

Originally Posted by shiny

Have you been watching "squidbillies"? Cause we all needs to be respectifying our moderators round here.

Nah, Az is just begging for a beat-down.

"Its spanking season. And I've got a hankering for a spankering."

- H. Simpson

HelpMeRhonda · 12-06-2006, 03:09 PM

Quote:

Originally Posted by brewer12345

Nah, Az is just begging for a beat-down.

"Its spanking season. And I've got a hankering for a spankering."

- H. Simpson

I've developed a servere bias towards his posts. It seems like everyone of them has some level of attack/lecture in them.

brewer12345 · 12-06-2006, 03:14 PM

Quote:

Originally Posted by HelpMeRhonda

I've developed a servere bias towards his posts. It seems like everyone of them has some level of attack/lecture in them.

Who? The Ding Dong Daddy?

Just remember, [edited by moderator] always advertise.

glock35ipsc · 12-06-2006, 04:26 PM

Hmmm, guess I got a little more than I bargained for.......

HFWR · 12-06-2006, 05:03 PM

I would include things of significant and determinable value. My watches, guitars, stereo, furniture, etc. aren't worth much on the open market, certainly not worth replacement value, so I'm not likely to sell them except for near starvation purposes.

Home equity, yes, for net worth purposes, but not for portfolio purposes.

perinova · 12-06-2006, 06:49 PM

I include financial assets, real estate ($0 for me right now),
I also include cars since they can easily be traded but I depreciate them very fast over 5 years. Our two 7 and 8 yo cars are on the books at under $1k each if I recall properly.
I wouldn't use anything else since I'd be in real financial trouble if I would trade other belongings. And they don't add up to much anyway.

I would also compute an income producing worth including financial assets and if I would have an income producing property I would put it there too.

Linney · 12-07-2006, 12:38 AM

I keep it simple -- here's a copy of what I track from my "networth.txt file" :

ASSETS
$$$ - house
$$$ - 401k,Roths,IRAs
$$$ - pension (current cash value)
$$$ - vehicle 1
$$$ - vehicle 2
$$$ - emergency fund
$$$ - company stock

DEBTS
$$$ - mortage and/or home equity loan ($0 for past several years, yeah!)
$$$ - credit card balances ($0 finally here too)

ASSETS - DEBTS = Net Worth

I value my vehicles at the price that I could sell them on craigslist. I could do the same for household goods but I just don't think it is worth the bother.

I add a new entry each year and it is rewarding to read back several years to see how far I have come! I particularly noticed an upswing when I finished paying off all debts -- it really does help you grow your net worth more quickly.

One final thing.... Like HFWR, I also track my income producing capabilities separate from net worth and for that calculation I exclude the house and vehicles.

mathjak107 · 12-07-2006, 02:29 AM

It depends for what purpose and why you are figuring your net worth .For estate tax purposes i would count my home,for a loan a bank would count it.
I prefer not to count a personal residence in net worth for retirement purposes unless i was ready to liquidate it.If i was taking a loan against it i would subtract out the loan though..I wouldnt count it anymore than i would subtract off my net worth my future rent payments if i didnt own a house .A home is a consumption item until the day comes that your no longer consuming it.I have some origonal art work on my walls which i love.I dont count that either .Maybe one day ill want to sell them,at that point i would count it,same goes for jewelry.

BigMoneyJim · 12-07-2006, 02:35 AM

I try not to (figure my net worth). I think the more practical approach is to ask yourself what you really want to find out.

If you want to compare with peers, calculate the same way they do. If you want to plan retirement, calculate your spendable retirement assets. (Insert long debate here about whether to add house in net worth for planning retirement.)

Just trying to find the "right" way to calculate your net worth will really frustrate you...it did me, anyway. How do you account for a vested non-COLA pension you can't touch until 55 or 60? Social Security?...heck I've already put in my 40 quarters. These obviously have value for retirement but have no tangible value to me today, and I can't pass them on if I die before I can draw on them. Even my 401(k) and IRA are hard to figure...sure I have a NAV updated for me daily, but if I tried to take it all out tomorrow I would end up with only half of it after taxes.

So instead I just keep patting myself on the back for staying debt free and watching my investments grow. I'm not sure what I'll do during the next dip...maybe I'll start adding in my pension and SS again.

dmpi · 12-07-2006, 07:21 AM

I count what most people here count. Checking, Savings, stocks, 401Ks, Est Home & Vehicle value.
But I also subtract out estimated income tax for the investments that have not been taxed yet.

kaudrey · 12-07-2006, 09:31 AM

I don't count cars. I figure I'll always have to replace them, so I can't really sell one to raise cash to live off of (of course I COULD, but I don't intend to). So, for FIRE purposes my NW is:

Savings Accounts
CDs
Brokerage Account
Rollover IRA
401(k) plan

Mentally, I also sometimes add in an estimated value of my future gov't pension, but I don't keep that in a spreadsheet. It does, however, affect my "number".

For overall NW, I add the equity in the house.

I have no other debt.

Karen

**Gumby** · 12-07-2006, 12:48 PM

For me: Net Worth = Financial Assets (Cash, Stocks, Bonds, Mutual Funds) + Home Value - Mortgage Balance.

The credit cards get paid every month and I don't really own anything all that valuable other than the house.

Since I don't plan to move except in the most dire of circumstances, a more useful figure for me, and the one that will determine when I retire, is financial assets - mortgage balance.

justin · 12-07-2006, 12:49 PM

house, cars, investment accounts, savings, checking = ASSETS
student loans, credit card debt, mortgage = DEBTS

NW = ASSETS - DEBTS

I only look at investment accounts to determine FIREability/SWR's that sort of thing.

12-06-2006, 01:34 PM	#1
glock35ipsc Dryer sheet wannabe Join Date: Jul 2006 Posts: 21	How do YOU figure your Net Worth It seems everyone has there own way of calculating their net worth. I am not sure if I should be including some things or not, such as vehicles, home equity, jewelry, household items (big ticket things like TV's), collectables, etc? What is everyone elses opinion? I did some searching first, but didn't come up with anything..... __________________ If you fail to plan, you plan to fail.

12-06-2006, 01:41 PM	#2
REWahoo Moderator Emeritus Join Date: Jun 2002 Location: Texas Hill Country Posts: 10,879	Re: How do YOU figure your Net Worth This has been a hotly debated topic in the past. Here's a couple of threads: http://early-retirement.org/forums/i...hp?topic=643.0 http://early-retirement.org/forums/i...p?topic=3219.0 __________________ Spewing self-serving drivel since 2002.

12-06-2006, 01:51 PM	#3
glock35ipsc Dryer sheet wannabe Join Date: Jul 2006 Posts: 21	Re: How do YOU figure your Net Worth Thank you. It seems like I need to work on my searching abilities! __________________ If you fail to plan, you plan to fail.

12-06-2006, 02:17 PM	#4
azanon Thinks s/he gets paid by the post Join Date: Jul 2004 Posts: 1,505	Re: How do YOU figure your Net Worth REWahoo, nice catch and link, but the final thing you should do is close the thread. Mod 101 stuff.

12-06-2006, 04:26 PM	#11
glock35ipsc Dryer sheet wannabe Join Date: Jul 2006 Posts: 21	Re: How do YOU figure your Net Worth Hmmm, guess I got a little more than I bargained for....... __________________ If you fail to plan, you plan to fail.

12-06-2006, 05:03 PM	#12
HFWR Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: May 2005 Location: DFW Posts: 5,236	Re: How do YOU figure your Net Worth I would include things of significant and determinable value. My watches, guitars, stereo, furniture, etc. aren't worth much on the open market, certainly not worth replacement value, so I'm not likely to sell them except for near starvation purposes. Home equity, yes, for net worth purposes, but not for portfolio purposes. __________________ Have Funds, Will Retire I will now proceed to entangle the entire area...

12-06-2006, 06:49 PM	#13
perinova Recycles dryer sheets Join Date: Apr 2006 Posts: 399	Re: How do YOU figure your Net Worth I include financial assets, real estate ($0 for me right now), I also include cars since they can easily be traded but I depreciate them very fast over 5 years. Our two 7 and 8 yo cars are on the books at under $1k each if I recall properly. I wouldn't use anything else since I'd be in real financial trouble if I would trade other belongings. And they don't add up to much anyway. I would also compute an income producing worth including financial assets and if I would have an income producing property I would put it there too.

12-07-2006, 12:38 AM	#14
Linney Recycles dryer sheets Join Date: Nov 2006 Posts: 224	Re: How do YOU figure your Net Worth I keep it simple -- here's a copy of what I track from my "networth.txt file" : ASSETS $$$ - house $$$ - 401k,Roths,IRAs $$$ - pension (current cash value) $$$ - vehicle 1 $$$ - vehicle 2 $$$ - emergency fund $$$ - company stock DEBTS $$$ - mortage and/or home equity loan ($0 for past several years, yeah!) $$$ - credit card balances ($0 finally here too) ASSETS - DEBTS = Net Worth I value my vehicles at the price that I could sell them on craigslist. I could do the same for household goods but I just don't think it is worth the bother. I add a new entry each year and it is rewarding to read back several years to see how far I have come! I particularly noticed an upswing when I finished paying off all debts -- it really does help you grow your net worth more quickly. One final thing.... Like HFWR, I also track my income producing capabilities separate from net worth and for that calculation I exclude the house and vehicles.

12-07-2006, 02:29 AM	#15
mathjak107 Thinks s/he gets paid by the post Join Date: Jul 2005 Posts: 2,395	Re: How do YOU figure your Net Worth It depends for what purpose and why you are figuring your net worth .For estate tax purposes i would count my home,for a loan a bank would count it. I prefer not to count a personal residence in net worth for retirement purposes unless i was ready to liquidate it.If i was taking a loan against it i would subtract out the loan though..I wouldnt count it anymore than i would subtract off my net worth my future rent payments if i didnt own a house .A home is a consumption item until the day comes that your no longer consuming it.I have some origonal art work on my walls which i love.I dont count that either .Maybe one day ill want to sell them,at that point i would count it,same goes for jewelry.

12-07-2006, 02:35 AM	#16
BigMoneyJim Thinks s/he gets paid by the post Join Date: Feb 2003 Posts: 2,395	Re: How do YOU figure your Net Worth I try not to (figure my net worth). I think the more practical approach is to ask yourself what you really want to find out. If you want to compare with peers, calculate the same way they do. If you want to plan retirement, calculate your spendable retirement assets. (Insert long debate here about whether to add house in net worth for planning retirement.) Just trying to find the "right" way to calculate your net worth will really frustrate you...it did me, anyway. How do you account for a vested non-COLA pension you can't touch until 55 or 60? Social Security?...heck I've already put in my 40 quarters. These obviously have value for retirement but have no tangible value to me today, and I can't pass them on if I die before I can draw on them. Even my 401(k) and IRA are hard to figure...sure I have a NAV updated for me daily, but if I tried to take it all out tomorrow I would end up with only half of it after taxes. So instead I just keep patting myself on the back for staying debt free and watching my investments grow. I'm not sure what I'll do during the next dip...maybe I'll start adding in my pension and SS again.

12-07-2006, 07:21 AM	#17
dmpi Recycles dryer sheets Join Date: May 2006 Posts: 359	Re: How do YOU figure your Net Worth I count what most people here count. Checking, Savings, stocks, 401Ks, Est Home & Vehicle value. But I also subtract out estimated income tax for the investments that have not been taxed yet.

12-07-2006, 09:31 AM	#18
kaudrey Full time employment: Posting here. Join Date: Feb 2006 Location: Alexandria, Va Posts: 504	Re: How do YOU figure your Net Worth I don't count cars. I figure I'll always have to replace them, so I can't really sell one to raise cash to live off of (of course I COULD, but I don't intend to). So, for FIRE purposes my NW is: Savings Accounts CDs Brokerage Account Rollover IRA 401(k) plan Mentally, I also sometimes add in an estimated value of my future gov't pension, but I don't keep that in a spreadsheet. It does, however, affect my "number". For overall NW, I add the equity in the house. I have no other debt. Karen __________________ Two roads diverged in a wood, and I - I took the one less travelled by...

12-07-2006, 12:48 PM	#19
Gumby Moderator Join Date: Apr 2006 Posts: 1,681	Re: How do YOU figure your Net Worth For me: Net Worth = Financial Assets (Cash, Stocks, Bonds, Mutual Funds) + Home Value - Mortgage Balance. The credit cards get paid every month and I don't really own anything all that valuable other than the house. Since I don't plan to move except in the most dire of circumstances, a more useful figure for me, and the one that will determine when I retire, is financial assets - mortgage balance. __________________ You should not assume that I have a clue about anything I post. If you need a lawyer, go get your own.

12-07-2006, 12:49 PM	#20
justin Thinks s/he gets paid by the post Join Date: Jun 2005 Posts: 4,010	Re: How do YOU figure your Net Worth house, cars, investment accounts, savings, checking = ASSETS student loans, credit card debt, mortgage = DEBTS NW = ASSETS - DEBTS I only look at investment accounts to determine FIREability/SWR's that sort of thing.