What is My Net Worth? What is Yours?

What is considered persons Net Worth is quite simple in theory. It is all your assets minus all your liabilities. Have you ever calculated yours? If not, you should.

There are many theories on what you should and should not include in these calculations. Some include cars, others say that a car is just an expense. Some include the house or flat they live in. Others believe you should just include investment property and not the ones you actually live in. If you decide to include such things you need to include the current market value (not the purchase value) of the said car / flat and then in the liabilities side, of course, any mortgages/loans you have. As I do not own any real estate nor a car it is an easy decision for me not to include such things.

I do remember some time last year I did this exercise as well, but I can not find my notes anywhere. So this time they are going online so I have a place to look them up when I reevaluate things.

I started looking at my assets with the cash in my wallet, money on my bank accounts, as well as, the emergency fund. As I recently booked a hotel for myself and several people for later this year and paid it on my credit card so I also added this as money owed to me to the plus side as I do expect to get this back within a week or so. Most people have already paid it so just few to go.

Then I remembered I have a coin collection - these are limited issue Euro coins, mostly just picked up from circulation. I have never bought any over the coin face value. I have not had the collection professionally valued so I do not know the full value of it, so I just calculated what it would be worth if I spent the coins as normal. Although when looking them on coins shops most of them are valued at least 3 times over the face value, many even 10 to 20 times more. So it is an understatement, but it is a number I can easily calculate. This is the moment when a person who owns (sellable) art or expensive jewellery would add this to the value of the assets.

When I looked at my pension account value - it is a mandatory account in Estonia for people of about 35 and younger. I looked up the current value of my stock portfolio, my investments in Bondora, Mintos, Grupeer, EstateGuru and CrowdEstate platforms (I grouped these for the graph).  And then I wrote down the LHV Growth Account value.

So these are all the assets I could think of owning (did I miss something obvious?) and the values:

wallet	105,84
money owed to me	165,70
bank accounts	1613,15
emergency fund	4221,71
coin collection	298,02
pension account	9006,94
stock	730,00
p2p	3971,79
p2p realestate	7667,09
LHV GrowthAccount	4859,06

There are of course things I could add here like the more expensive things I own such as my photography equipment, my guitar, my computer etc. But I do not see any value in this. These are things I would not in a pragmatic situation sell to make money, I would use other assets, so I do not think you really need to calculate such things. Some do, I did not.

So now we come to the liabilities, there are just 3 things there. 

My credit card is most of the year all paid up but as I just booked and paid hotels the balance is -770,18, which will be paid back on the mandatory date. I have never kept a balance over to the next month there. No need to take up these expensive debts. 

I took up student loans in university due to the reason that I really needed them but also as there was a programme that if you then moved to the state sector the state would pay it back (it was extremely likely in my selected field). So my heart was a bit more relaxed on taking out the loan. Fortunately, I did not take it out every year and some years I took just the amount I needed not the full amount offered. I say fortunately as (like many people) I got fully screwed over. They changed the law so that people who had taken out the loans expecting the state to pay it, had to pay it back themselves. In many majors like teachers, for example, you would work in the state sector and were 100% sure to have the state pay it back. Well this was not what happened. They added a deadline that if you had not been employed full year by that date state would not pay, and of course, I missed the deadline by about 15 days as signing my contract had dragged on for months... So I had to pay back thousands of euros from my small state sector paycheck. Fortunately, the balance isn't too bad any more. Just 502,51 still to pay.

Last liability is my mobile payment. I have never taken out any type of consumer loans. But as telecommunications companies sometimes make offers where taking out 1 or 2-year payment plan is CHEAPER than actually just buying the phone you want out right at the moment I have used this type of offer twice now. So 78,75 owed to my telecommunications operator. 

If you have a mortgage, any type of loans, car lease, credit cards to pay back - all of this should be written down here. I now for some people the final balance might come out negative, especially if you have a huge mortgage. But it is important to know what your net worth is and are you making progress on it. Calculate it, and then look at it ever 6 months or so. It is important to remind yourself to pay back loans and increase investments. 

So, all in all, I have 32 639,30 € in assets,  -1 351,44  in liabilities and my net worth is currently 31 287,86 €. Could be better of course, but it is a work in progress.

And remember whatever your net worth is, that it does not and never should affect your self worth!