re: When someone says what is your net worth?

quote:

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What's weird is that nobody ever seems to net fees and taxes as well.

Like, if you sold your house, there would be transaction costs - and possibly taxes.

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Well, that’s an interesting point. But unless there was an existing tax liability (income tax or some other type), I wouldn’t consider it an actual liability that would/should be reflected in a net worth calculation. For instance, if one had lived in the house for only a year and sold for a profit, there might be a capital gains tax liability. But if after living in the house for several years, that potential liability might not be there. As for fees involved in disposing of assets (commissions, closing costs, etc.), those typically aren’t considered or discussed when calculating net worth. At best, they may only affect cost basis or net profits after disposition.

As for the question in the OP, I’d say it depends on by whom and for what reason the question is being asked. Is it a BS discussion over beers at the race track or golf course, where guys are comparing their johnsons? Or is it a question taking place across a private banker’s desk? Accuracy in one doesn’t matter, while the other one… ya might wanna get as close to reality as possible.