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Old 07-01-2017, 09:52 PM   #41
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Since I rarely actually calculate net worth it is kinda moot for me...


When I calculate investable assets i do not really care as I do not worry about the money I have... I am mostly less than $10K and lots of times less than $5K and that is not enough to worry about...
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Old 07-01-2017, 10:03 PM   #42
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Quote:
Originally Posted by jimbee View Post
Net worth = assets - liabilities

Checking and savings accounts are assets.
+1

So yes.
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Old 07-01-2017, 10:43 PM   #43
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My checking accounts are assets, so if I'm really doing a down to the dollar accounting, yes, I'd include it. That said, I can't remember the last time I got into that much detail. My checking accts are probably less than 1/1000 of my total net worth. I do include my homes and Motorhome(even though it is a depreciating asset) in net worth calculations, because eventually they'll all be sold and replaced with something much smaller and less expensive.
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Old 07-01-2017, 11:15 PM   #44
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As with NW-Bound I include credit card balances as well as all bank accounts. All properties, including both homes, are valued according to current tax appraised value. Don't include cash, cars, possessions. But that is just me.
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Old 07-01-2017, 11:23 PM   #45
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Current tax value doesn't work in California. It's usually a lot less than what's the house is worth. I'm glad it's a lot less. But it's not accurate.
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Old 07-02-2017, 05:08 AM   #46
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One volatile day in the market can change my NW by as much as $15K-$20K plus/minus. My checking balance changes day to day as well.

As such, the amount in my checking really doesn't impact my NW all that much by comparison. Unless I want to know my NW every single day or go out to the n'th decimal it doesn't matter.

My checking balance is about 0.05% of my NW
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Old 07-02-2017, 05:22 AM   #47
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Checking account and emergency account balances are included in my NW calculations but not included in my "investment portfolio" which generates a return that is either spent or reinvested.


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Old 07-02-2017, 05:43 AM   #48
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Originally Posted by bw5972 View Post
Net Worth is a specific financial term/concept. It includes all current assets (even the change in your sofa) minus all current liabilties, if you want to plan you finances excluding your checking balances that is fine, just don't muddle Net Worth into the discussion.

Just my opinion.
+1 If you are calculating something else (e.g. portfolio value for SWR calculations) call it what it is.
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Old 07-02-2017, 06:42 AM   #49
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Quicken show me my net worth whenever I get quotes and download transactions, so there is no effort.
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Old 07-02-2017, 07:13 AM   #50
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I track my NW every quarter and I include checking and savings accounts. The only thing I do not include are personal possessions. I include my house and cars.
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Net Worth on ER, essentially meaningless
Old 07-02-2017, 08:14 AM   #51
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Net Worth on ER, essentially meaningless

Quote:
Wikipedia
Net worth is the value of all the non-financial and financial assets owned minus the value of all its outstanding liabilities.

Investopedia
Net worth is the amount by which assets exceed liabilities. Another way to say this is, itís the value of everything you own, minus all your debts.

OECD
Household total net worth is the value of total assets (the total amount of financial assets plus the total amount of non-financial assets.
Since, on ER, this number has no set meaning, any comparison must be taken in context.

When an $800K home is not part of one's net worth, the rest of the items that may or may not be included, is meaningless.
Savings account
Life insurance value
Cars
Realtime inflation/deflation amounts
Net sale differentials... taxes, attorney costs, commissions etc.
Assessed value of antiques, collections
Foreseeable gains/losses.

Naturally, if one's Net Worth exceeds $10M, the perspective of value will differ from the hopeful ER member who is feeling good about having attained a Net Worth of $300K.

The difference extends beyond this, for those of us who look to our net worth as the source of income for our waning days, and those who look to preserve their net worth... using only the investment income to live out their days.

We're all different. Good to know that despite the differences, we can all get along...
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Old 07-02-2017, 08:21 AM   #52
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I include all except my furniture, clothes and appliances. That's probably less than $1000 in total .. car is included.

SS / pension is excluded. Partially because it is irrelevant (30+ years out) and small.
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Old 07-02-2017, 08:58 AM   #53
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For asset allocation purposes IMO checking and savings belong in the 'cash' category alongside any money market sweep funds or net cash balances in brokerage accounts.
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Old 07-02-2017, 02:34 PM   #54
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Yes.

I realize I have a lot of cash in savings (as well as in investments), currently totalling about 14.5%, so ignoring savings in net worth would be foolish.
In the stocks, I've taken some gains the last two years to reduce to a relatively low band of 59%, and although I put some to work in bonds 3-6 months ago when bond yields went up, more recently yields are again scraping bottom.
It takes one click in Quicken to see net worth or broad allocations including all cash in all accounts.
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Old 07-02-2017, 02:47 PM   #55
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In the past I haven't included either one. But then I realized that there is over 11k every month between the two, and they are pretty much within 2k of that yearly. So I started including it in my net worth calculations. Am I wrong? What do you do regarding this?
What are you including it for? Is there some calculation you are doing based on your total net worth?
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Old 07-02-2017, 02:48 PM   #56
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For asset allocation purposes IMO checking and savings belong in the 'cash' category alongside any money market sweep funds or net cash balances in brokerage accounts.
The OP didn't say anything about asset allocation.
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Old 07-02-2017, 04:14 PM   #57
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What are you including it for? Is there some calculation you are doing based on your total net worth?
Yes, as I get closer to 500k it seemed like a slam dunk to start including it in my calculations. I do not include my car, or clothes and I do not own a home, so just whatever else I have gets included. My savings and checking never had that much in them before, so I never thought much about it. I know that it [savings+checking] is going to be pretty consistent now, so I that is why I added it . 500k for me seems to be a tough nut to crack, but I will get there eventually.
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Old 07-02-2017, 07:04 PM   #58
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Mint includes them (along with CC balances and house/car valuations) in net worth. But I can't recall a single time I've ever thought about that number other than looking at Mint.
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Old 07-02-2017, 10:37 PM   #59
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Quicken puts everything into net worth, so checking and savings are included, along with our house, mortgage, and rental property. But when I do my "can we retire yet" calculations, I only look at our investment and retirement accounts. And sometimes I add in the rental, as it's paid off and could be sold if needed. But I try to be conservative, so usually only use the investment numbers in firecalc.
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Old 07-02-2017, 11:01 PM   #60
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Quote:
Originally Posted by jimbee View Post
Net worth = assets - liabilities

Checking and savings accounts are assets.
Yes, but so are my 43 bic pens and my unused packages of printer paper, at what point do you stop and just decide to calculate a FAKE net worth ?
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