When someone says what is your net worth?

Chill out corn pop. They prob never talk about it in front of u.

It is the difference between the market value of your assets and your debts/liabilities.

That has to be the most offensive conversation starter ever.

Just be an a-hole like he is and say "way more than you," "more than you could ever dream of having," or "I lost count"

I would never discuss that with people unless they were laying that personal info on the table and wanted advice on how to handle it or a path going forward.

That is what a financial advisor is for.

quote:

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All of that is included in your net worth. If you are asking then you don’t understand what net worth means.

People with money never discuss money.

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OP asks genuine question about finances on a board about money and finances.

First response insults him instead of answer the question. Classic

It is assets minus liabilities.

But many now confuse net worth w FI # which doesnt include assets you wont liquidate such as home and cars.

When I'm thinking of my NW I choose to ignore 529s since they are designated for my kids and I also ignore vehicles since they are neccessities and dont make a dent in my total NW.

NW doesnt have much utility as a financial planning factor. Technically current value of all my possessions should also be included but that doesnt do me any good if I have to replace them at higher retail cost to maintain my standard of living. If I was just starting out or otherwise low NW I might include those in planning because in an emergency a yard sale or pawning belongings might be usefu.

Thus, many use a more tailored # not including all assets and equity when planning for things like FI. That not technically NW but might be more useful for some situations.

Considering the only people that ever ask are banks, yes I include all of that. Only question I have is do I include just my equity in my company, or should I get a business valuation and include this

A lot of people like net worth because they can include home equity which inflates the number. However, unless you are planning on selling and living in your car for retirement that doesn't really give the most accurate picture.

The definition is the definition, but for tracking finances I don't include house (definitely don't include 529s) and focus on money invested. Net worth doesn't indicate when you have "enough" to retire, but amount invested/saved does.

Pretax retirement plans are a weird one to me. I mean if I have $100 dollars in a 401k then I add that (but is that fair since it will be taxed in the future at an unknown rate). So is it really worth more like $70 dollars to my net worth?

Also home equity is weird to me (I mean you have equity but also debt). Hopefully the debt is liquid and you can sell for the same price or greater.

But who knows.

Idk what the correct answer is.

What you own minus what you owe equals net worth