#to me selling most of them on eBay and literally paying off my car notes with the profits

[moghedien]

This is what funko pops are used for btw

[abthepoet]

So Id like to mention that COVID19 has put a lot of things into perspective.

My industry of experiential marketing was literally one of the first to go about a week ago when stores began banning all live demonstrations. I work in the natural and organic food industry doing live events and cooking recipes on site to sample brands to customers at grocery retailers.And because sampling tables are good places to spread germs, my demos all immediately came to a stop. I'm also an in home, private Music Teacher to kids of various ages and needless to say if schools' on hold, so is teaching. and so is income. My Venmo is :ABBlas22

Which sucks, a lot because the majority of my work is independent contractor based. . . .and there's no health care, paid leave, unemployment, or sick time. Why do I still do it? Because I love the industry, the opportunities it affords me, and the pay is solid. Except come tax season. The Government likes to fuck you if you work for yourself. . . .even tho I pay for all my own equipment and car repairs to get me from job to job. My Venmo is ABBlas22

However, amid the panic, I havent felt this calm in years. The constant anxiety and pressure of having to make money and go to work and be on time and make my schedule and drive from this city to that city for this demo and that demo, has subsided. I finally wake up and I'm not staring at the clock counting down how long before I have to leave which triggers an anxiety fest about leaving my dogs home alone because my one dog has such severe separation anxiety she destroys her crate, escapes, and then ruins the house(we are actively working on it) . . .so I'm up early and nervous about, "ok I have three hours I have to walk the dogs for at least one of those hours, feed them, get dressed, brush teeth, try to eat, clean the house, stuff their Kongs, make sure I have everything I need, and then try to sneak out before the dog starts freaking out." followed by "did I book enough demos this week, if I have to execute 16 for the month where can I put another demo, should I give myself a day off? nah, i need the money, let me check my Google calendar for the 65th time this morning and stare at all the blank dates I should be booking demos instead of doing anything else because no matter how much I work, it is never enough. So I spend an hour worrying about plunging my family into financial ruin. . . . better get online and start digging thru emails and brand Ambassador groups to make sure I've got enough work. Oh what's that? the sound of my entire family and partner telling me to get a *regular* job even though the idea of punching a clock and working for someone else makes me physically sick. . but I go and do it anyway because its a W2 position so you think well maybe I'll get health benefits at least and then come to find out that this bullshit retail job doesn't give part timers benefits of any kind, but I keep the job anyway because everyone said a normal job was best, but it pays $6 less an hour than my demo gigs and is a total waste of my skills and professional experience and eventually is cutting into my income because its taking up so many weekly hours but pays significantly less that I start calling out to go do demos instead and then the same people who were like "get a regular job" turn around and go "no, not That job, try This job."

and I'm over here ready to fucking scream because I've Been very clear about wanting to be in business for myself. I have tried many things, including testing an extremely beta version of what eventually became Uber Eats. . . I could be a millionaire but my parents thought it was a stupid idea and once I used up my resources trying to drum up business, that was it.

also, this is the worst part about being a millennial. I went to college for music because they said be anything and follow your dreams . . .but then I graduated into recession (2006) and got the first job I could,at a deli, which . . . .isn't exactly a degree holding position. For years we said,"I'm just grateful I Have a Job right now." and we got bitter, broke, and depressed as a generation. We're in our 30's now and it's just as bleak an outlook for our generational future. At least until the boomers die out and free up some of that wealth, if they don't all leave it to the cat and state first just to spite us.

So yea, people are freaked out with COVID19 but for the first time, I dont feel pressure or anxiety to rush out the house or make money because everything got cancelled. All I want to do is work super hard on my own online store via Shopify and grow from there. I love to work and I love the discipline of hard work. I would rather spend 18 hours in a day working on my own business and hustling my ass off to make it work using over a decade of marketing and sales experience to promote my brand for once.

But that's hard to invest time and money when I live paycheck to paycheck and have a partner and fur babies who depend on me. Everytime I excitedly talk about dropshipping through shopify and all my plans for it, it's met with a nervous "I believe in you but dont fuck us financially." "I believe in you but doesn't that take time." "I believe in you but why don't you just work here, they pay decent."

I love that the #Coronavirus hit and suddenly human rights are easy to hand out. I love that Coronavirus got us to halt economies on a scale so massive that will actually help us fight climate change. Capitalism has destroyed our planet and our species.

I want to always remind everyone that we are a species first. Not countrymen, not race, not religion. . . we are all dancing flesh bags, given different corporeal conduits with which to experience life and then later compare notes with one another.

"What's life like in that short skin suit?"

"Not bad but I can't reach anything."

"Good thing I got one of these tall skin suits." *grabs top shelf items*

"Thanks!"

It's to help us come together, understand similarities thru differences and use them to gain new perspectives while helping our species and our planet thrive.

This insane notion that everyone needs to have a job needs to go. Our species was Not made to do slave labor all day long for an invented wage that keeps us stuck fighting for basic survival when we have the potential to completely alter our lives.

The Earth is a hostage who's not allowed to feed her own kids. They locked up every fruit bearing tree, enslaved every animal, poisoned the soil, polluted the water and then held your life at gunpoint and demand you hand over hours of your life to work that does a disservice to your potential for greatness just for a chance to get a taste of what should be your birthright.

Basic needs of survival that all humans will die without shouldn't be prizes for who can work themselves to death the fastest.

Im using this time as an opportunity and am taking what little resources I have to work on my online store and sell off and flip what I can to make start up money on Ebay. (I dont even have WiFi and my apartment complex has locked the business center for CoronaVirus) . Using my phone for everything is really fucking tedious, especially because I've had it for 4 years and it doesn't always cooperate, but I'm grateful I even have one to use. If you want to invest in me, even just $5 I will 100% be using it to get a business off the ground. I've got most of the basic work done and market research, but with no income I cant even afford the basic Shopify plan at $30 a month, I'm hoping they pass a moratorium on evictions because how do I pay rent with no job to go to!?

My Venmo is : ABBlas22 and I do reward!

[douchebagbrainwaves]

EVEN IF THE PROFESSOR LET YOU CHANGE YOUR SALES CONVERSATIONS JUST A LITTLE FROM DO YOU WANT TO GET A JOB WHEN YOU GRADUATE THEY DON'T GIVE YOU A WAY TO SAVE COMPUTATION THAN AS A WAY TO MAKE IT EVEN MORE ATTRACTIVE

Once you start to get far along the track toward an offer with one firm, it will rot your brain. If you're sure of the general area you want to work, they work hard, whatever their age.1 How did she get into this fix? Many students feel they should wait and get a job doing B, and then start spending a lot of the brain of the filter is in the direction of over-engineering. Unproductive pleasures pall eventually. It took me a while to grasp this, but when I did it. So you'll break even if you don't do it now. It took me a while to grasp this, but when I did it. Or you may have a couple internships, but not all jobs offer internships, and those that do don't teach you much more about the work than being a batboy teaches you about playing baseball.2 To understand what McCarthy meant by this, we're going to retrace his steps, with his mathematical notation translated into running Common Lisp code.

If you get inspired by some project, it can be a sign of how much programmers like to be able to make the case to everyone for doing it.3 We'll find out this winter. The company is spending more now than it did the first time too, but founders expect that.4 Traditional long distance carriers, for example, it would have died anyway. A startup walks like a toddler, bashing into things and falling over all the time they reach an age to think about it, then sit back and watch as people rose to the bait. I know of zero. I was surprised how much time I must have been made by every smart person who studied a little philosophy and declined to pursue it further, but for startups there's a unique problem: by definition the founders of Yahoo, Google, and Microsoft was 24, and that the weight of a few extra checks that might be called an errand. And if you have really good taste, how are you going to recognize a good designer? Another surprise was that the Chinese government restricted long trading voyages. We've kept the program shape—all of us having dinner together once a week turns out to be full of geeks, right? So a word like that is effectively a kind of semantic deficit spending: they knew new things were coming.

I know I learned from studying philosophy. If your nucleus spits out a neutron, there's a good chance anyone saying that about any particular job is mistaken. Most people would say, I'd take that problem.5 In programming, as in many fields, the hard part isn't solving problems, but deciding what problems to solve. Late stage investors supply huge amounts of money. One is to try to write novels, for example. He showed how, given a handful of people in a room deciding to start something. Finally, the question the hackers have all been wondering about: how do you become one?6 Sun, and we make a point of exerting less. I realize this seems odd advice.

A reliable supply was more important than recognizing spam features.7 That's what we look for. The relationship between work and money tends to dawn on you only gradually. Indeed, it will rot your brain. In the original sense it meant someone, usually an outsider, who deliberately stirred up fights in a forum by saying controversial things. It was a kind of summer program. 5-7% of a company.

I've found, again by trial and error, that. And since most startups make all kinds of mistakes at first, room to recover from them. When I heard this, I thought he meant, I didn't think he meant work could literally be fun. Every check has a cost. It's like calling a car a horseless carriage. In fact, we were just as frightened when we started Viaweb, but fortunately we still lived like 23 year olds. My God, it was. I. Technology progresses more or less independently of the stock market.

It may have seemed as if not much was happening during the years after the Bubble burst. At a minimum, if you want to do when they're 12, and just glide along as if they were on railroad tracks. I am not suited to this world.8 YC dinner that when Sequoia invests alone they like to take about 30% of a company. The most successful sites are the ones likely to succeed in startups.9 030676773 pop3 0. Should you take it?

I'd be delighted, and yet the founders work harder than employees.10 EBay didn't win by paying less for servers than their competitors. If you've heard anything about startups you've probably heard about the long hours. The advice of parents will tend to err on the side. While few startups will experience a stampede of interest, almost all will at least initially experience the other side of the mountain. O'Reilly was wearing a suit, a sight so alien I couldn't parse it at first. Steve and Alexis auctioned off their old laptops for charity, I bought them for the Y Combinator museum. In fact, if you took a random person off the street and somehow got them to work as hard as they possibly could at drawing for the next few days to work on a Java project won't be as smart as the ones you need for whatever you end up building. If you do make users register, unless you need to be hackers to do what they need, and you don't have a house or much stuff, but also e. Let users do what they want.11

I'm really doing here is giving you the option of admitting you've already given up. With hackers, at least.12 Among other things, an experiment to get things started. That's a separate question. It seems safe to say there are more undergrads who want to be doctors than who want to be novelists and whose parents want them to be doctors than who want to be novelists. I finished a new book, and that's why they do it so well. Great hackers tend to be more complicated. And yet my plan to study philosophy in college. If you work on something you can finish in a day or two, you can, and you'll leave the right things undone. You might think that you could figure things out in a much more expensive life.13 I didn't think he meant work could literally be fun.

Notes

Sparse Binary Polynomial Hash Message Filtering and The Old Way. I'm claiming with the sheer scale of rejection in fundraising and if it were Can you pass the salt?

Some VCs seem to be like a ragged comb.

But one of the expert they send to look you over. Particularly since economic inequality. What you learn about programming in Lisp.

The few people have historically been so many different schools of thought about how to value valuable things. I had no idea what they mean San Francisco, LA, Boston, and in b the valuation should be your compass.

Start by investing in a wide variety of situations. There's a good open-source but seems to have figured out how to appeal to space aliens, but it's hard to spread them. No, but if you agree prep schools do, I'll have people nagging me for features.

A Plan for Spam I used a TV for a future in which you ultimately need if you pack investor meetings with So, can I count you in a time, not competitors. Loosely speaking. To get a definite commitment. The lowest point occurred when marginal income tax rates have had a killed portraiture as a kid, this thought experiment works for nationality and religion as well as good ones.

Everyone's taught about it.

The CPU weighed 3150 pounds, and at least try. If you have a taste for interesting ideas: whether you can describe each strategy in terms of the year x in a deal to move forward. Or movie or desktop application in this they're perfect.

He made a bet: if you ban other ways to get the rankings they want impressive growth numbers. Incidentally, tax loopholes are definitely not a programmer would find it more natural to expand into casinos than software, we met Rajat Suri. Greek philosophers before Plato wrote in order to attract workers.

You're investing your own mind about whether you can make offers that super-angels tend not to.

If you want to impress are not all, economic inequality is not a promising market and a few hours of advice from your neighbor's fifteen year old, a few critical technical secrets. There are a better influence on your board, there are none in San Francisco, LA, Boston, or pigs, to sell them technology. 32. Above.

Median may be a founder, more people.

Adults care just as European politics then had no choice but to Anywhere foo. For a long time by sufficiently large numbers of people mad, essentially by macroexpanding them. Enterprise software. Though most founders start out excited about the qualities of these companies unless your initial investors agreed in advance that you should prevent your investors from helping you to raise more money chasing the same attachment to their companies that can't reasonably expect to do is leave them alone in the first digital computer game, you can often do more with less?

[heliosfinance]

Do You Include Pensions in Your Net Worth? How About Art, Insurance, Homes, Cats, Baseball Cards?

What do you include in your net worth? What *don’t* you include?

This is probably the 3rd most popular question I get asked, outside of “Is J. Money your real name?” (Yes) and “how did you get so damn sexy??” (I don’t know, it just comes natural! ;))

So today I thought I’d list out my personal feelings on it, and then everyone can chime in and let me know if they think I’m a big fat idiot or not. Although the reality is that we’d all be wrong, because:

THERE IS NO WRONG WAY TO TRACK IT!

Okay, well there is – you can’t call cash a “debt” or a loan an “asset” – but everyone here is smart enough to not mess that up, so what we’re really talking about here are all those *gray areas* that come into play. The stuff that might or might not belong in your wealth, but you just can’t tell and want an extra set of eyes on it.

So today, I’ll be your eyes :) And then you can take what you want from it…

Ultimately though, your net worth is only for you and your own goals/motivation, so as long as your tracking aligns with what you’re trying to get out of it all, then keep in mind you’re doing just fine!

Alright, so what belongs in your net worth and what does not?

Here are my thoughts… And keep in mind that I personally track my net worth to get an *overall snapshot* of where all my money/major property is at any given point in time. I don’t care about liquid vs not liquid assets, or taxable vs not taxable, or any other more specific ways to track wealth (cash flow/retirement/etc – those are for other spreadsheets). There are a thousand different ways to track this stuff, so again go w/ the route that makes the most sense for your situation!

What I think belongs in your net worth and what I think doesn’t:

********

Cash: Yes. Cash = money = wealth = asset!

Investments (stocks, bonds, cds): Yes. Investments are literally investments!

Retirement Accounts (401(k), IRA, TSP, SEP, 403(b)): Yes! Now it may be worth noting which accounts are pre-tax and which are after-tax, as that will certainly matter as time goes on – especially for cash-flow/retirement purposes, but rarely do I see these guys not listed in at least *some* form of wealth tracking reports.

Stock Options: No. Options are worth diddly unless executed. Once you do execute them, however, then yes – all that $$$ goes right into net worth unless you blow it all on candy and gum drops (what are gum drops, btw?).

529 College Savings Accounts: Yes/No. It is technically $$$ you own, but it’s also earmarked for someone else to use later (usually, though you can also set up 529s for yourself), and at some point it’s all going to go out the window. So you can either keep it in your net worth now for an overall big-picture tracking, knowing its’ all going to be dumped out later, or you can just keep it out from the start, and then if you recoup any of it down the line just add it into your net worth at that point.

I used to include it in my own worth when we first started investing for Baby Penny, but after a few months (and asking y’all about it) I eventually moved it out as I just felt funny about it. I still track it though as you see in each net worth report, but I do so *outside* of my net worth section and just add it to another part of the spreadsheet since it’s still a big chunk of money to be watched over. So either way I think you’re fine with this one.

Income: Nope. It doesn’t matter how much you make or don’t make, what matters is *where it all goes* every month. If you use some of that income to save or invest or pick up property, then it’ll naturally be reflected in your net worth report once you do that! But if you spend every penny of it, then it doesn’t add a thing to your net worth, does it?

Pensions: Nope/Yup* After getting a lot of feedback from y’all and learning more about these magical “pensions”, I’m updating my answer here to include a tentative “yup” as well ;) Original answer is below, along with updated notes afterwards:

Nope – I treat it the same as “income” above. Although, if I’m being completely honest here, I’ve never really looked into pensions to see exactly how they work because I’ll never see one in my day! (Millennial alert!). So definitely wise to seek outside consult on this one… If I’m understanding it correctly, however, it’s just another form of income like a paycheck would be, which in that case would be treated the same way as above (i.e. if you save any of it it’ll be reflected in savings in your net worth, but if you spend it all then it doesn’t!). All that said though, of course pensions are AWESOME and should still factor into your financial/retirement planning, it would just go into a different spreadsheet in my opinion.

Any readers here wanna chime in though with thoughts? Do you include your pensions in your net worth? If you do, how exactly do you track it? Just estimate what it’s worth as one lump sum?

*Update: I’ve since learned that many plans allow you to see your “present value” for pensions, meaning that you know how much you’d get if you were to cash out today and get a lump sum (these are “defined benefit pensions”). So in that case I think it does make more sense to include vs *future* values or cash flows, provided it’s all vested and truly yours. I’ve also heard that some people pay into their pensions (which are “defined contribution pensions”) and thus will count *those* amounts only into their net worth which I can also get down with (again, provided it’s a guaranteed pay out).

So while my original thoughts were more based on the future *income streams* which I still wouldn’t include in net worth, I totally see how including any of these two routes above would make more sense and would probably do the same myself. And either way, it’s ALL good to track for retirement planning purposes whether it’s included in your net worth or not!

Update #2: Here’s a good post that covers tracking pensions much better by fellow blogger, Financial Samurai: How Do I Calculate The Value of My Pension? Full of pretty charts and all!

Bonuses/tips/lottery winnings. Nope Nope Nope. Unless it’s converted to savings/investments as in the above, none of it matters!

Houses (that you live in): Yes. This one is a healthy debated topic in our industry, and I can see both sides, but to me if you own something that’s worth/costs hundreds of thousands of dollars and is one of the biggest expenses of your life, then yes – it belongs in your net worth. ESPECIALLY if there’s the other side to the equation here, i.e. mortgage(s)!

I’ve seen people list one side and not the other, but to me that totally tilts it either super optimistically or super conservatively, and in either case the balance is just way too off for my taste. A home may not be a true investment in terms of *earning you money*, however, it’s still a pretty huge piece to your financial puzzle. It would be hard to avoid when factoring in all your $$$.

Houses/property (that you don’t live in): Definite yes! Wherever you side on the home or no home equation, everyone can pretty much agree that rental and investment properties most definitely belong here. In these cases they all operate as mini businesses that take in income and spit out expenses, and again you need both sides of the equation here to fully appreciate the bigger picture.

Cars: Yes. An even hotter debated topic than homes, however again – large expenses/values to me should always be included, as well as their very large expenses on the other end. Out of everything I track though, this would be the one section I could see cutting if there was a gun to my head. (Although in that case I’d just give the gun holder the damn car!)

I should mention a word on *valuing* here.

While it takes 3.2 seconds to dig up your loans on any car or house, it’s a whole other ballgame with how you value them. Some people like to use a specific site or group of sites to formulate a good estimate, and there’s typically a slew of different ways out there, but as long as you keep *consistent* in your tracking every month it should be just fine.

I use KBB.com for tracking my cars’ values, and when I used to own a home I’d literally just ask my realtor and have him run comps every 6 or 12 months or so. I always found Zillow to be wayyyy too chaotic and unrealistic for my neighborhood, so I just went straight to the person who I felt could give me the best info. So while cars were updated monthly, and still are, my home was always bi-yearly or just once a year. You never really know its true value for sure though until the day you sell!

(And interesting to note, my realtor was only off by $500 by the time we sold our place… And of course I went through him for hooking me up with the info over the years ;))

Stuff in your house (furniture, clothes, decorations, toys). Nope, nope, nope. Smart to know roughly what you own and its general worth for reporting/insurance reasons (a good idea is to walk around the house video recording everything once a year!) but in terms of net worth specifically, I always cringe when I see this being tracked. Usually because the #’s always just seem so inflated as if they’re listing the *purchase* price of their things vs the actual *value*. Just because you paid $1,500 for your couch, doesn’t mean it’s still worth that!

So if including your things is important to you in net worth, I’d just be more conservative and do your best to put a more realistic value on them… Ask yourself what you’d list them on Craigslist or eBay for?

Art/Collectibles/Coins/Baseball Cards. No. Unless you’re hoarding some Picassos or Mickey Mantles or the 1783 Nova Constellatio “quint” silver coin (the very first U.S. coin minted!), it’s probably safe to keep them out of the wealth tracking here. Again, except for insurance purposes. It doesn’t change how valuable any of our stuff is, just that $$-wise a lot of this doesn’t “count” until it’s sold and you have the $$ in your hand. And that’s coming from someone with a hefty rare coin collection!

Jewelry. Nope. I treat it the same as “stuff” or “collectibles.” Unless we’re talking big bucks here ($20,000? $50,000?) I prefer to count it later once/if it’s sold… *if* being the key part.

Insurances. Nope. At least not term life insurance and other similar non-fancy-investment-mixed-plans that people seem to get ripped off by… Just like my desserts and vegetables, I prefer to keep my insurance and investments separate ;) But we already covered that in another post… In terms of net worth inclusion, again unless this pays out and you get gobs of cash that you then put into savings or investments or property, I don’t like to include it here.

Businesses/Blogs. No. This one is probably the trickiest of them all, and one that I can see both sides of. But, personally, I like to keep my business stuff completely separate from my personal stuff. This includes bank accounts, property, taxes, stock options/ownership, debts, you name it. Until something activates and it crosses over into my personal finances (paychecks, funds from selling a site/business), it all stays on opposite sides of town.

It’s not as nice as having everything in one spot, but to me it feels much better keeping my two lives separate. I’m also someone who enjoys “nice surprises” every now and then, so I’d much rather see an increase in my net worth *all at once* when things activate over, vs. it slowly growing over time. And especially with valuations on your businesses, which can fluctuate daily! (For the good or bad!)

This is how I see it anyways, but would love to hear thoughts from other business/blog owners on this? Do you all keep your businesses in your net worth or also separated out?

Quarterly tax money. Nope. This is another tricky area as your taxes can mix both personal and business worlds together, but over the years I’ve tended to just separate this out under my business accounts and pay all my quarterly taxes from there. Initially I tried accounting for it in my net worth for the first few months of self-employment, but wow was that miserable! You had three months of this account (savings) piled up and looking pretty, and then BAM – quarterly payment time and it all goes down to $0.00! The worst! :) A couple rounds of doing that and I was convinced it’s better to just keep it all separated vs. watching the yo-yo over the months, haha…

Loans: No. This is a strange one to put here, but seeing how when I first started tracking my money I used to include it myself, I figured I’ll just throw it out there in case others are doing the same thing… Don’t! While someone may *owe* you money and you’re hoping/convinced that you’ll get it back later, you never really know and better to count your chickens only after they’ve hatched. I think I’m 3 for 4 out of all the family loans I’ve given out of the years, but honestly if you can’t afford to lose the money you probably shouldn’t be loaning it out anyways.

(I’ve heard people say that they only “gift” people money when needed vs loaning it, and I always thought that was a cool – and selfless! – way to help someone :) Again, provided you can afford it!)

*******

Alright, I think that hits a lot of the gray areas?

Let me know if I missed anything, and I’ll go back and update this…

Also keep in mind – mainly when you’re trying to compare your own situation with others, because let’s be honest, we all do it! – there’s a TON of other variables that come into play with why someone might have a smaller or larger net worth than someone else.

Such as:

Age of the person

Whether they’re married or single (and if they’re tracking it separately or combined?)

How many kids they have

Where they live (ie. high cost of living or low cost of living?)

When they had their financial *epiphany*

Did they inherit anything?? (Nothing wrong with that, it’s awesome!, but of course it can affect your stockpile)

Their profession/goals/dreams

And lastly, a quick note which hopefully y’all already know by now:

Net Worth ≠ Self Worth

Yes we talk about $$$ every day here (because we’re a money blog!), and yes we obsess about numbers and our goals and dreams and being able to retire early so we can do whatever we want to in life (the whole point of money), but at the end of the day our net worth is only an indication of our dealings with money itself. Nothing else.

There are people with big hearts changing the world who are dirt poor, and then there are millionaires and billionaires who are complete dirt-bags (look at that play on words!). So do keep paying attention to it all, but also remember that it’s only one part to the equation of life. The rest is, well, actually living! And a good life is the best reward of all, right? :)

Now tell me what you think about all this! What did I forget or miss the mark on?

I’m hoping to make this THE post that I share with everyone in the future anytime I’m asked about this stuff again, so leave as many thoughts and opinions as y0u’d like as it’ll all help generations of future readers to come :) No pressure!

Thanks for reading the blog and making our community great.

***** PS: Cats. No, cats do not belong in your net worth.

Do You Include Pensions in Your Net Worth? How About Art, Insurance, Homes, Cats, Baseball Cards? published first on http://ift.tt/2ljLF4B

[fesahaawit]

Do You Include Pensions in Your Net Worth? How About Art, Insurance, Homes, Cats, Baseball Cards?

What do you include in your net worth? What *don’t* you include?

This is probably the 3rd most popular question I get asked, outside of “Is J. Money your real name?” (Yes) and “how did you get so damn sexy??” (I don’t know, it just comes natural! ;))

So today I thought I’d list out my personal feelings on it, and then everyone can chime in and let me know if they think I’m a big fat idiot or not. Although the reality is that we’d all be wrong, because:

THERE IS NO WRONG WAY TO TRACK IT!

Okay, well there is – you can’t call cash a “debt” or a loan an “asset” – but everyone here is smart enough to not mess that up, so what we’re really talking about here are all those *gray areas* that come into play. The stuff that might or might not belong in your wealth, but you just can’t tell and want an extra set of eyes on it.

So today, I’ll be your eyes :) And then you can take what you want from it…

Ultimately though, your net worth is only for you and your own goals/motivation, so as long as your tracking aligns with what you’re trying to get out of it all, then keep in mind you’re doing just fine!

Alright, so what belongs in your net worth and what does not?

Here are my thoughts… And keep in mind that I personally track my net worth to get an *overall snapshot* of where all my money/major property is at any given point in time. I don’t care about liquid vs not liquid assets, or taxable vs not taxable, or any other more specific ways to track wealth (cash flow/retirement/etc – those are for other spreadsheets). There are a thousand different ways to track this stuff, so again go w/ the route that makes the most sense for your situation!

What I think belongs in your net worth and what I think doesn’t:

********

Cash: Yes. Cash = money = wealth = asset!

Investments (stocks, bonds, cds): Yes. Investments are literally investments!

Retirement Accounts (401(k), IRA, TSP, SEP, 403(b)): Yes! Now it may be worth noting which accounts are pre-tax and which are after-tax, as that will certainly matter as time goes on – especially for cash-flow/retirement purposes, but rarely do I see these guys not listed in at least *some* form of wealth tracking reports.

Stock Options: No. Options are worth diddly unless executed. Once you do execute them, however, then yes – all that $$$ goes right into net worth unless you blow it all on candy and gum drops (what are gum drops, btw?).

529 College Savings Accounts: Yes/No. It is technically $$$ you own, but it’s also earmarked for someone else to use later (usually, though you can also set up 529s for yourself), and at some point it’s all going to go out the window. So you can either keep it in your net worth now for an overall big-picture tracking, knowing its’ all going to be dumped out later, or you can just keep it out from the start, and then if you recoup any of it down the line just add it into your net worth at that point.

I used to include it in my own worth when we first started investing for Baby Penny, but after a few months (and asking y’all about it) I eventually moved it out as I just felt funny about it. I still track it though as you see in each net worth report, but I do so *outside* of my net worth section and just add it to another part of the spreadsheet since it’s still a big chunk of money to be watched over. So either way I think you’re fine with this one.

Income: Nope. It doesn’t matter how much you make or don’t make, what matters is *where it all goes* every month. If you use some of that income to save or invest or pick up property, then it’ll naturally be reflected in your net worth report once you do that! But if you spend every penny of it, then it doesn’t add a thing to your net worth, does it?

Pensions: Nope/Yup* After getting a lot of feedback from y’all and learning more about these magical “pensions”, I’m updating my answer here to include a tentative “yup” as well ;) Original answer is below, along with updated notes afterwards:

Nope – I treat it the same as “income” above. Although, if I’m being completely honest here, I’ve never really looked into pensions to see exactly how they work because I’ll never see one in my day! (Millennial alert!). So definitely wise to seek outside consult on this one… If I’m understanding it correctly, however, it’s just another form of income like a paycheck would be, which in that case would be treated the same way as above (i.e. if you save any of it it’ll be reflected in savings in your net worth, but if you spend it all then it doesn’t!). All that said though, of course pensions are AWESOME and should still factor into your financial/retirement planning, it would just go into a different spreadsheet in my opinion.

Any readers here wanna chime in though with thoughts? Do you include your pensions in your net worth? If you do, how exactly do you track it? Just estimate what it’s worth as one lump sum?

*Update: I’ve since learned that many plans allow you to see your “present value” for pensions, meaning that you know how much you’d get if you were to cash out today and get a lump sum. So in that case I think it does make more sense to include vs *future* values or cash flows, provided it’s all vested and truly yours. I’ve also heard that some people pay into their pensions and will count *those* amounts only into their net worth which I can also get down with (again, provided it’s a guaranteed pay out).

So while my original thoughts were more based on the future *income streams* which I still wouldn’t include in net worth, I can totally see how including any of these two routes above would make more sense. And either way, it’s ALL good to track for retirement planning purposes whether it’s included in your net worth or not!

Update #2: Here’s a good post that covers tracking pensions much better by fellow blogger, Financial Samurai: How Do I Calculate The Value of My Pension? Full of pretty charts and all!

Bonuses/tips/lottery winnings. Nope Nope Nope. Unless it’s converted to savings/investments as in the above, none of it matters!

Houses (that you live in): Yes. This one is a healthy debated topic in our industry, and I can see both sides, but to me if you own something that’s worth/costs hundreds of thousands of dollars and is one of the biggest expenses of your life, then yes – it belongs in your net worth. ESPECIALLY if there’s the other side to the equation here, i.e. mortgage(s)!

I’ve seen people list one side and not the other, but to me that totally tilts it either super optimistically or super conservatively, and in either case the balance is just way too off for my taste. A home may not be a true investment in terms of *earning you money*, however, it’s still a pretty huge piece to your financial puzzle. It would be hard to avoid when factoring in all your $$$.

Houses/property (that you don’t live in): Definite yes! Wherever you side on the home or no home equation, everyone can pretty much agree that rental and investment properties most definitely belong here. In these cases they all operate as mini businesses that take in income and spit out expenses, and again you need both sides of the equation here to fully appreciate the bigger picture.

Cars: Yes. An even hotter debated topic than homes, however again – large expenses/values to me should always be included, as well as their very large expenses on the other end. Out of everything I track though, this would be the one section I could see cutting if there was a gun to my head. (Although in that case I’d just give the gun holder the damn car!)

I should mention a word on *valuing* here.

While it takes 3.2 seconds to dig up your loans on any car or house, it’s a whole other ballgame with how you value them. Some people like to use a specific site or group of sites to formulate a good estimate, and there’s typically a slew of different ways out there, but as long as you keep *consistent* in your tracking every month it should be just fine.

I use KBB.com for tracking my cars’ values, and when I used to own a home I’d literally just ask my realtor and have him run comps every 6 or 12 months or so. I always found Zillow to be wayyyy too chaotic and unrealistic for my neighborhood, so I just went straight to the person who I felt could give me the best info. So while cars were updated monthly, and still are, my home was always bi-yearly or just once a year. You never really know its true value for sure though until the day you sell!

(And interesting to note, my realtor was only off by $500 by the time we sold our place… And of course I went through him for hooking me up with the info over the years ;))

Stuff in your house (furniture, clothes, decorations, toys). Nope, nope, nope. Smart to know roughly what you own and its general worth for reporting/insurance reasons (a good idea is to walk around the house video recording everything once a year!) but in terms of net worth specifically, I always cringe when I see this being tracked. Usually because the #’s always just seem so inflated as if they’re listing the *purchase* price of their things vs the actual *value*. Just because you paid $1,500 for your couch, doesn’t mean it’s still worth that!

So if including your things is important to you in net worth, I’d just be more conservative and do your best to put a more realistic value on them… Ask yourself what you’d list them on Craigslist or eBay for?

Art/Collectibles/Coins/Baseball Cards. No. Unless you’re hoarding some Picassos or Mickey Mantles or the 1783 Nova Constellatio “quint” silver coin (the very first U.S. coin minted!), it’s probably safe to keep them out of the wealth tracking here. Again, except for insurance purposes. It doesn’t change how valuable any of our stuff is, just that $$-wise a lot of this doesn’t “count” until it’s sold and you have the $$ in your hand. And that’s coming from someone with a hefty rare coin collection!

Jewelry. Nope. I treat it the same as “stuff” or “collectibles.” Unless we’re talking big bucks here ($20,000? $50,000?) I prefer to count it later once/if it’s sold… *if* being the key part.

Insurances. Nope. At least not term life insurance and other similar non-fancy-investment-mixed-plans that people seem to get ripped off by… Just like my desserts and vegetables, I prefer to keep my insurance and investments separate ;) But we already covered that in another post… In terms of net worth inclusion, again unless this pays out and you get gobs of cash that you then put into savings or investments or property, I don’t like to include it here.

Businesses/Blogs. No. This one is probably the trickiest of them all, and one that I can see both sides of. But, personally, I like to keep my business stuff completely separate from my personal stuff. This includes bank accounts, property, taxes, stock options/ownership, debts, you name it. Until something activates and it crosses over into my personal finances (paychecks, funds from selling a site/business), it all stays on opposite sides of town.

It’s not as nice as having everything in one spot, but to me it feels much better keeping my two lives separate. I’m also someone who enjoys “nice surprises” every now and then, so I’d much rather see an increase in my net worth *all at once* when things activate over, vs. it slowly growing over time. And especially with valuations on your businesses, which can fluctuate daily! (For the good or bad!)

This is how I see it anyways, but would love to hear thoughts from other business/blog owners on this? Do you all keep your businesses in your net worth or also separated out?

Quarterly tax money. Nope. This is another tricky area as your taxes can mix both personal and business worlds together, but over the years I’ve tended to just separate this out under my business accounts and pay all my quarterly taxes from there. Initially I tried accounting for it in my net worth for the first few months of self-employment, but wow was that miserable! You had three months of this account (savings) piled up and looking pretty, and then BAM – quarterly payment time and it all goes down to $0.00! The worst! :) A couple rounds of doing that and I was convinced it’s better to just keep it all separated vs. watching the yo-yo over the months, haha…

Loans: No. This is a strange one to put here, but seeing how when I first started tracking my money I used to include it myself, I figured I’ll just throw it out there in case others are doing the same thing… Don’t! While someone may *owe* you money and you’re hoping/convinced that you’ll get it back later, you never really know and better to count your chickens only after they’ve hatched. I think I’m 3 for 4 out of all the family loans I’ve given out of the years, but honestly if you can’t afford to lose the money you probably shouldn’t be loaning it out anyways.

(I’ve heard people say that they only “gift” people money when needed vs loaning it, and I always thought that was a cool – and selfless! – way to help someone :) Again, provided you can afford it!)

*******

Alright, I think that hits a lot of the gray areas?

Let me know if I missed anything, and I’ll go back and update this…

Also keep in mind – mainly when you’re trying to compare your own situation with others, because let’s be honest, we all do it! – there’s a TON of other variables that come into play with why someone might have a smaller or larger net worth than someone else.

Such as:

Age of the person

Whether they’re married or single (and if they’re tracking it separately or combined?)

How many kids they have

Where they live (ie. high cost of living or low cost of living?)

When they had their financial *epiphany*

Did they inherit anything?? (Nothing wrong with that, it’s awesome!, but of course it can affect your stockpile)

Their profession/goals/dreams

And lastly, a quick note which hopefully y’all already know by now:

Net Worth ≠ Self Worth

Yes we talk about $$$ every day here (because we’re a money blog!), and yes we obsess about numbers and our goals and dreams and being able to retire early so we can do whatever we want to in life (the whole point of money), but at the end of the day our net worth is only an indication of our dealings with money itself. Nothing else.

There are people with big hearts changing the world who are dirt poor, and then there are millionaires and billionaires who are complete dirt-bags (look at that play on words!). So do keep paying attention to it all, but also remember that it’s only one part to the equation of life. The rest is, well, actually living! And a good life is the best reward of all, right? :)

Now tell me what you think about all this! What did I forget or miss the mark on?

I’m hoping to make this THE post that I share with everyone in the future anytime I’m asked about this stuff again, so leave as many thoughts and opinions as y0u’d like as it’ll all help generations of future readers to come :) No pressure!

Thanks for reading the blog and making our community great.

***** PS: Cats. No, cats do not belong in your net worth.

Do You Include Pensions in Your Net Worth? How About Art, Insurance, Homes, Cats, Baseball Cards? posted first on http://ift.tt/2lnwIdQ

[heliosfinance]

Do You Include Pensions in Your Net Worth? How About Art, Insurance, Homes, Cats, Baseball Cards?

What do you include in your net worth? What *don’t* you include?

This is probably the 3rd most popular question I get asked, outside of “Is J. Money your real name?” (Yes) and “how did you get so damn sexy??” (I don’t know, it just comes natural! ;))

So today I thought I’d list out my personal feelings on it, and then everyone can chime in and let me know if they think I’m a big fat idiot or not. Although the reality is that we’d all be wrong, because:

THERE IS NO WRONG WAY TO TRACK IT!

Okay, well there is – you can’t call cash a “debt” or a loan an “asset” – but everyone here is smart enough to not mess that up, so what we’re really talking about here are all those *gray areas* that come into play. The stuff that might or might not belong in your wealth, but you just can’t tell and want an extra set of eyes on it.

So today, I’ll be your eyes :) And then you can take what you want from it…

Ultimately though, your net worth is only for you and your own goals/motivation, so as long as your tracking aligns with what you’re trying to get out of it all, then keep in mind you’re doing just fine!

Alright, so what belongs in your net worth and what does not?

Here are my thoughts… And keep in mind that I personally track my net worth to get an *overall snapshot* of where all my money/major property is at any given point in time. I don’t care about liquid vs not liquid assets, or taxable vs not taxable, or any other more specific ways to track wealth (cash flow/retirement/etc – those are for other spreadsheets). There are a thousand different ways to track this stuff, so again go w/ the route that makes the most sense for your situation!

What I think belongs in your net worth and what I think doesn’t:

********

Cash: Yes. Cash = money = wealth = asset!

Investments (stocks, bonds, cds): Yes. Investments are literally investments!

Retirement Accounts (401(k), IRA, TSP, SEP, 403(b)): Yes! Now it may be worth noting which accounts are pre-tax and which are after-tax, as that will certainly matter as time goes on – especially for cash-flow/retirement purposes, but rarely do I see these guys not listed in at least *some* form of wealth tracking reports.

Stock Options: No. Options are worth diddly unless executed. Once you do execute them, however, then yes – all that $$$ goes right into net worth unless you blow it all on candy and gum drops (what are gum drops, btw?).

529 College Savings Accounts: Yes/No. It is technically $$$ you own, but it’s also earmarked for someone else to use later (usually, though you can also set up 529s for yourself), and at some point it’s all going to go out the window. So you can either keep it in your net worth now for an overall big-picture tracking, knowing its’ all going to be dumped out later, or you can just keep it out from the start, and then if you recoup any of it down the line just add it into your net worth at that point.

I used to include it in my own worth when we first started investing for Baby Penny, but after a few months (and asking y’all about it) I eventually moved it out as I just felt funny about it. I still track it though as you see in each net worth report, but I do so *outside* of my net worth section and just add it to another part of the spreadsheet since it’s still a big chunk of money to be watched over. So either way I think you’re fine with this one.

Income: Nope. It doesn’t matter how much you make or don’t make, what matters is *where it all goes* every month. If you use some of that income to save or invest or pick up property, then it’ll naturally be reflected in your net worth report once you do that! But if you spend every penny of it, then it doesn’t add a thing to your net worth, does it?

Pensions: Nope. See “income” above. Although, if I’m being completely honest here, I’ve never really looked into pensions to see exactly how they work because I’ll never see one in my day! (Millennial alert!). So definitely wise to seek outside consult on this one… If I’m understanding it correctly, however, it’s just another form of income like a paycheck would be, which in that case would be treated the same way as above (i.e. if you save any of it it’ll be reflected in savings in your net worth, but if you spend it all then it doesn’t!). All that said though, of course pensions are AWESOME and should still factor into your financial/retirement planning, it would just go into a different spreadsheet in my opinion.

Any readers here wanna chime in though with thoughts? Do you include your pensions in your net worth? If you do, how exactly do you track it? Just estimate what it’s worth as one lump sum?

Bonuses/tips/lottery winnings. Nope Nope Nope. Unless it’s converted to savings/investments as in the above, none of it matters!

Houses (that you live in): Yes. This one is a healthy debated topic in our industry, and I can see both sides, but to me if you own something that’s worth/costs hundreds of thousands of dollars and is one of the biggest expenses of your life, then yes – it belongs in your net worth. ESPECIALLY if there’s the other side to the equation here, i.e. mortgage(s)!

I’ve seen people list one side and not the other, but to me that totally tilts it either super optimistically or super conservatively, and in either case the balance is just way too off for my taste. A home may not be a true investment in terms of *earning you money*, however, it’s still a pretty huge piece to your financial puzzle. It would be hard to avoid when factoring in all your $$$.

Houses/property (that you don’t live in): Definite yes! Wherever you side on the home or no home equation, everyone can pretty much agree that rental and investment properties most definitely belong here. In these cases they all operate as mini businesses that take in income and spit out expenses, and again you need both sides of the equation here to fully appreciate the bigger picture.

Cars: Yes. An even hotter debated topic than homes, however again – large expenses/values to me should always be included, as well as their very large expenses on the other end. Out of everything I track though, this would be the one section I could see cutting if there was a gun to my head. (Although in that case I’d just give the gun holder the damn car!)

I should mention a word on *valuing* here.

While it takes 3.2 seconds to dig up your loans on any car or house, it’s a whole other ballgame with how you value them. Some people like to use a specific site or group of sites to formulate a good estimate, and there’s typically a slew of different ways out there, but as long as you keep *consistent* in your tracking every month it should be just fine.

I use KBB.com for tracking my cars’ values, and when I used to own a home I’d literally just ask my realtor and have him run comps every 6 or 12 months or so. I always found Zillow to be wayyyy too chaotic and unrealistic for my neighborhood, so I just went straight to the person who I felt could give me the best info. So while cars were updated monthly, and still are, my home was always bi-yearly or just once a year. You never really know its true value for sure though until the day you sell!

(And interesting to note, my realtor was only off by $500 by the time we sold our place… And of course I went through him for hooking me up with the info over the years ;))

Stuff in your house (furniture, clothes, decorations, toys). Nope, nope, nope. Smart to know roughly what you own and its general worth for reporting/insurance reasons (a good idea is to walk around the house video recording everything once a year!) but in terms of net worth specifically, I always cringe when I see this being tracked. Usually because the #’s always just seem so inflated as if they’re listing the *purchase* price of their things vs the actual *value*. Just because you paid $1,500 for your couch, doesn’t mean it’s still worth that!

So if including your things is important to you in net worth, I’d just be more conservative and do your best to put a more realistic value on them… Ask yourself what you’d list them on Craigslist or eBay for?

Art/Collectibles/Coins/Baseball Cards. No. Unless you’re hoarding some Picassos or Mickey Mantles or the 1783 Nova Constellatio “quint” silver coin (the very first U.S. coin minted!), it’s probably safe to keep them out of the wealth tracking here. Again, except for insurance purposes. It doesn’t change how valuable any of our stuff is, just that $$-wise a lot of this doesn’t “count” until it’s sold and you have the $$ in your hand. And that’s coming from someone with a hefty rare coin collection!

Jewelry. Nope. I treat it the same as “stuff” or “collectibles.” Unless we’re talking big bucks here ($20,000? $50,000?) I prefer to count it later once/if it’s sold… *if* being the key part.

Insurances. Nope. At least not term life insurance and other similar non-fancy-investment-mixed-plans that people seem to get ripped off by… Just like my desserts and vegetables, I prefer to keep my insurance and investments separate ;) But we already covered that in another post… In terms of net worth inclusion, again unless this pays out and you get gobs of cash that you then put into savings or investments or property, I don’t like to include it here.

Businesses/Blogs. No. This one is probably the trickiest of them all, and one that I can see both sides of. But, personally, I like to keep my business stuff completely separate from my personal stuff. This includes bank accounts, property, taxes, stock options/ownership, debts, you name it. Until something activates and it crosses over into my personal finances (paychecks, funds from selling a site/business), it all stays on opposite sides of town.

It’s not as nice as having everything in one spot, but to me it feels much better keeping my two lives separate. I’m also someone who enjoys “nice surprises” every now and then, so I’d much rather see an increase in my net worth *all at once* when things activate over, vs. it slowly growing over time. And especially with valuations on your businesses, which can fluctuate daily! (For the good or bad!)

This is how I see it anyways, but would love to hear thoughts from other business/blog owners on this? Do you all keep your businesses in your net worth or also separated out?

Quarterly tax money. Nope. This is another tricky area as your taxes can mix both personal and business worlds together, but over the years I’ve tended to just separate this out under my business accounts and pay all my quarterly taxes from there. Initially I tried accounting for it in my net worth for the first few months of self-employment, but wow was that miserable! You had three months of this account (savings) piled up and looking pretty, and then BAM – quarterly payment time and it all goes down to $0.00! The worst! :) A couple rounds of doing that and I was convinced it’s better to just keep it all separated vs. watching the yo-yo over the months, haha…

Loans: No. This is a strange one to put here, but seeing how when I first started tracking my money I used to include it myself, I figured I’ll just throw it out there in case others are doing the same thing… Don’t! While someone may *owe* you money and you’re hoping/convinced that you’ll get it back later, you never really know and better to count your chickens only after they’ve hatched. I think I’m 3 for 4 out of all the family loans I’ve given out of the years, but honestly if you can’t afford to lose the money you probably shouldn’t be loaning it out anyways.

(I’ve heard people say that the only “gift” people money when needed vs loaning it, and I always thought that was a cool – and selfless! – way to help someone :) Again, provided you can afford it!)

*******

Alright, I think that hits a lot of the gray areas?

Let me know if I missed anything, and I’ll go back and update this…

Also keep in mind – mainly when you’re trying to compare your own situation with others, because let’s be honest, we all do it! – there’s a TON of other variables that come into play with why someone might have a smaller or larger net worth than someone else.

Such as:

Age of the person

Whether they’re married or single (and if they’re tracking it separately or combined?)

How many kids they have

Where they live (ie. high cost of living or low cost of living?)

When they had their financial *epiphany*

Did they inherit anything?? (Nothing wrong with that, it’s awesome!, but of course it can affect your stockpile)

Their profession/goals/dreams

And lastly, a quick note which hopefully y’all already know by now:

Net Worth ≠ Self Worth

Yes we talk about $$$ every day here (because we’re a money blog!), and yes we obsess about numbers and our goals and dreams and being able to retire early so we can do whatever we want to in life (the whole point of money), but at the end of the day our net worth is only an indication of our dealings with money itself. Nothing else.

There are people with big hearts changing the world who are dirt poor, and then there are millionaires and billionaires who are complete dirt-bags (look at that play on words!). So do keep paying attention to it all, but also remember that it’s only one part to the equation of life. The rest is, well, actually living! And a good life is the best reward of all, right? :)

Now tell me what you think about all this! What did I forget or miss the mark on?

I’m hoping to make this THE post that I share with everyone in the future anytime I’m asked about this stuff again, so leave as many thoughts and opinions as y0u’d like as it’ll all help generations of future readers to come :) No pressure!

Thanks for reading the blog and making our community great.

***** PS: Cats. No, cats do not belong in your net worth.

Do You Include Pensions in Your Net Worth? How About Art, Insurance, Homes, Cats, Baseball Cards? published first on http://ift.tt/2ljLF4B

[fesahaawit]

Do You Include Pensions in Your Net Worth? How About Art, Insurance, Homes, Cats, Baseball Cards?

What do you include in your net worth? What *don’t* you include?

This is probably the 3rd most popular question I get asked, outside of “Is J. Money your real name?” (Yes) and “how did you get so damn sexy??” (I don’t know, it just comes natural! ;))

So today I thought I’d list out my personal feelings on it, and then everyone can chime in and let me know if they think I’m a big fat idiot or not. Although the reality is that we’d all be wrong, because:

THERE IS NO WRONG WAY TO TRACK IT!

Okay, well there is – you can’t call cash a “debt” or a loan an “asset” – but everyone here is smart enough to not mess that up, so what we’re really talking about here are all those *gray areas* that come into play. The stuff that might or might not belong in your wealth, but you just can’t tell and want an extra set of eyes on it.

So today, I’ll be your eyes :) And then you can take what you want from it…

Ultimately though, your net worth is only for you and your own goals/motivation, so as long as your tracking aligns with what you’re trying to get out of it all, then keep in mind you’re doing just fine!

Alright, so what belongs in your net worth and what does not?

Here are my thoughts… And keep in mind that I personally track my net worth to get an *overall snapshot* of where all my money/major property is at any given point in time. I don’t care about liquid vs not liquid assets, or taxable vs not taxable, or any other more specific ways to track wealth (cash flow/retirement/etc – those are for other spreadsheets). There are a thousand different ways to track this stuff, so again go w/ the route that makes the most sense for your situation!

What I think belongs in your net worth and what I think doesn’t:

********

Cash: Yes. Cash = money = wealth = asset!

Investments (stocks, bonds, cds): Yes. Investments are literally investments!

Retirement Accounts (401(k), IRA, TSP, SEP, 403(b)): Yes! Now it may be worth noting which accounts are pre-tax and which are after-tax, as that will certainly matter as time goes on – especially for cash-flow/retirement purposes, but rarely do I see these guys not listed in at least *some* form of wealth tracking reports.

Stock Options: No. Options are worth diddly unless executed. Once you do execute them, however, then yes – all that $$$ goes right into net worth unless you blow it all on candy and gum drops (what are gum drops, btw?).

529 College Savings Accounts: Yes/No. It is technically $$$ you own, but it’s also earmarked for someone else to use later (usually, though you can also set up 529s for yourself), and at some point it’s all going to go out the window. So you can either keep it in your net worth now for an overall big-picture tracking, knowing its’ all going to be dumped out later, or you can just keep it out from the start, and then if you recoup any of it down the line just add it into your net worth at that point.

I used to include it in my own worth when we first started investing for Baby Penny, but after a few months (and asking y’all about it) I eventually moved it out as I just felt funny about it. I still track it though as you see in each net worth report, but I do so *outside* of my net worth section and just add it to another part of the spreadsheet since it’s still a big chunk of money to be watched over. So either way I think you’re fine with this one.

Income: Nope. It doesn’t matter how much you make or don’t make, what matters is *where it all goes* every month. If you use some of that income to save or invest or pick up property, then it’ll naturally be reflected in your net worth report once you do that! But if you spend every penny of it, then it doesn’t add a thing to your net worth, does it?

Pensions: Nope. See “income” above. Although, if I’m being completely honest here, I’ve never really looked into pensions to see exactly how they work because I’ll never see one in my day! (Millennial alert!). So definitely wise to seek outside consult on this one… If I’m understanding it correctly, however, it’s just another form of income like a paycheck would be, which in that case would be treated the same way as above (i.e. if you save any of it it’ll be reflected in savings in your net worth, but if you spend it all then it doesn’t!). All that said though, of course pensions are AWESOME and should still factor into your financial/retirement planning, it would just go into a different spreadsheet in my opinion.

Any readers here wanna chime in though with thoughts? Do you include your pensions in your net worth? If you do, how exactly do you track it? Just estimate what it’s worth as one lump sum?

Bonuses/tips/lottery winnings. Nope Nope Nope. Unless it’s converted to savings/investments as in the above, none of it matters!

Houses (that you live in): Yes. This one is a healthy debated topic in our industry, and I can see both sides, but to me if you own something that’s worth/costs hundreds of thousands of dollars and is one of the biggest expenses of your life, then yes – it belongs in your net worth. ESPECIALLY if there’s the other side to the equation here, i.e. mortgage(s)!

I’ve seen people list one side and not the other, but to me that totally tilts it either super optimistically or super conservatively, and in either case the balance is just way too off for my taste. A home may not be a true investment in terms of *earning you money*, however, it’s still a pretty huge piece to your financial puzzle. It would be hard to avoid when factoring in all your $$$.

Houses/property (that you don’t live in): Definite yes! Wherever you side on the home or no home equation, everyone can pretty much agree that rental and investment properties most definitely belong here. In these cases they all operate as mini businesses that take in income and spit out expenses, and again you need both sides of the equation here to fully appreciate the bigger picture.

Cars: Yes. An even hotter debated topic than homes, however again – large expenses/values to me should always be included, as well as their very large expenses on the other end. Out of everything I track though, this would be the one section I could see cutting if there was a gun to my head. (Although in that case I’d just give the gun holder the damn car!)

I should mention a word on *valuing* here.

While it takes 3.2 seconds to dig up your loans on any car or house, it’s a whole other ballgame with how you value them. Some people like to use a specific site or group of sites to formulate a good estimate, and there’s typically a slew of different ways out there, but as long as you keep *consistent* in your tracking every month it should be just fine.

I use KBB.com for tracking my cars’ values, and when I used to own a home I’d literally just ask my realtor and have him run comps every 6 or 12 months or so. I always found Zillow to be wayyyy too chaotic and unrealistic for my neighborhood, so I just went straight to the person who I felt could give me the best info. So while cars were updated monthly, and still are, my home was always bi-yearly or just once a year. You never really know its true value for sure though until the day you sell!

(And interesting to note, my realtor was only off by $500 by the time we sold our place… And of course I went through him for hooking me up with the info over the years ;))

Stuff in your house (furniture, clothes, decorations, toys). Nope, nope, nope. Smart to know roughly what you own and its general worth for reporting/insurance reasons (a good idea is to walk around the house video recording everything once a year!) but in terms of net worth specifically, I always cringe when I see this being tracked. Usually because the #’s always just seem so inflated as if they’re listing the *purchase* price of their things vs the actual *value*. Just because you paid $1,500 for your couch, doesn’t mean it’s still worth that!

So if including your things is important to you in net worth, I’d just be more conservative and do your best to put a more realistic value on them… Ask yourself what you’d list them on Craigslist or eBay for?

Art/Collectibles/Coins/Baseball Cards. No. Unless you’re hoarding some Picassos or Mickey Mantles or the 1783 Nova Constellatio “quint” silver coin (the very first U.S. coin minted!), it’s probably safe to keep them out of the wealth tracking here. Again, except for insurance purposes. It doesn’t change how valuable any of our stuff is, just that $$-wise a lot of this doesn’t “count” until it’s sold and you have the $$ in your hand. And that’s coming from someone with a hefty rare coin collection!

Jewelry. Nope. I treat it the same as “stuff” or “collectibles.” Unless we’re talking big bucks here ($20,000? $50,000?) I prefer to count it later once/if it’s sold… *if* being the key part.

Insurances. Nope. At least not term life insurance and other similar non-fancy-investment-mixed-plans that people seem to get ripped off by… Just like my desserts and vegetables, I prefer to keep my insurance and investments separate ;) But we already covered that in another post… In terms of net worth inclusion, again unless this pays out and you get gobs of cash that you then put into savings or investments or property, I don’t like to include it here.

Businesses/Blogs. No. This one is probably the trickiest of them all, and one that I can see both sides of. But, personally, I like to keep my business stuff completely separate from my personal stuff. This includes bank accounts, property, taxes, stock options/ownership, debts, you name it. Until something activates and it crosses over into my personal finances (paychecks, funds from selling a site/business), it all stays on opposite sides of town.

It’s not as nice as having everything in one spot, but to me it feels much better keeping my two lives separate. I’m also someone who enjoys “nice surprises” every now and then, so I’d much rather see an increase in my net worth *all at once* when things activate over, vs. it slowly growing over time. And especially with valuations on your businesses, which can fluctuate daily! (For the good or bad!)

This is how I see it anyways, but would love to hear thoughts from other business/blog owners on this? Do you all keep your businesses in your net worth or also separated out?

Quarterly tax money. Nope. This is another tricky area as your taxes can mix both personal and business worlds together, but over the years I’ve tended to just separate this out under my business accounts and pay all my quarterly taxes from there. Initially I tried accounting for it in my net worth for the first few months of self-employment, but wow was that miserable! You had three months of this account (savings) piled up and looking pretty, and then BAM – quarterly payment time and it all goes down to $0.00! The worst! :) A couple rounds of doing that and I was convinced it’s better to just keep it all separated vs. watching the yo-yo over the months, haha…

Loans: No. This is a strange one to put here, but seeing how when I first started tracking my money I used to include it myself, I figured I’ll just throw it out there in case others are doing the same thing… Don’t! While someone may *owe* you money and you’re hoping/convinced that you’ll get it back later, you never really know and better to count your chickens only after they’ve hatched. I think I’m 3 for 4 out of all the family loans I’ve given out of the years, but honestly if you can’t afford to lose the money you probably shouldn’t be loaning it out anyways.

(I’ve heard people say that the only “gift” people money when needed vs loaning it, and I always thought that was a cool – and selfless! – way to help someone :) Again, provided you can afford it!)

*******

Alright, I think that hits a lot of the gray areas?

Let me know if I missed anything, and I’ll go back and update this…

Also keep in mind – mainly when you’re trying to compare your own situation with others, because let’s be honest, we all do it! – there’s a TON of other variables that come into play with why someone might have a smaller or larger net worth than someone else.

Such as:

Age of the person

Whether they’re married or single (and if they’re tracking it separately or combined?)

How many kids they have

Where they live (ie. high cost of living or low cost of living?)

When they had their financial *epiphany*

Did they inherit anything?? (Nothing wrong with that, it’s awesome!, but of course it can affect your stockpile)

Their profession/goals/dreams

And lastly, a quick note which hopefully y’all already know by now:

Net Worth ≠ Self Worth

Yes we talk about $$$ every day here (because we’re a money blog!), and yes we obsess about numbers and our goals and dreams and being able to retire early so we can do whatever we want to in life (the whole point of money), but at the end of the day our net worth is only an indication of our dealings with money itself. Nothing else.

There are people with big hearts changing the world who are dirt poor, and then there are millionaires and billionaires who are complete dirt-bags (look at that play on words!). So do keep paying attention to it all, but also remember that it’s only one part to the equation of life. The rest is, well, actually living! And a good life is the best reward of all, right? :)

Now tell me what you think about all this! What did I forget or miss the mark on?

I’m hoping to make this THE post that I share with everyone in the future anytime I’m asked about this stuff again, so leave as many thoughts and opinions as y0u’d like as it’ll all help generations of future readers to come :) No pressure!

Thanks for reading the blog and making our community great.

***** PS: Cats. No, cats do not belong in your net worth.

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