QuirkyPancake
What is the meaning of net worth?
I have heard this statement may times. As a 27 year old how do I actually calculate my net worth?
12mo ago
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Curated from across
I have heard this statement may times. As a 27 year old how do I actually calculate my net worth?
Net worth = Current Assets (investments like real estate, bonds, stocks, cash etc) - debts (loans). It is better to exclude your primary house while calculating as you won't sell it.
Why not. Sell it and live on rent. Asset is something where you have spent money and can be sold at a higher return. Primary residence is included.
It can be included but i personally feel, no. It can be done if the home is bought with an intention to sell and there is a clear visibility of the sell date to include the expected price. If it is bought for self use (especially on loan), it doesn't make sense to include it.
Assets (cash, investments, property) - liabilities (loans)
There are differing opinions.
A common theme is the amount of money you have in liquid assets (stocks, mfs, bonds) + worth of properties except the primary residence.
Primary residence is part of your net worth. If one has to liquidate his wealth and sell off everything they can do so for the property they stay in while moving into a rented accommodation.
I've heard it both ways. As I said in yhe original comment there are differing opinions.
Last week there was another post on grapevine itself where people were saying only liquid assets contribute to net worth. So, you know, I keep an open mind and summarise the learnings
Assets include everything you can sell to get money, so it won't include things like your residential home, your car etc. It does include your real estates, equity, gold, cash, bank balance etc. Deduct any debt you have like loans from it and you have your net worth.
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