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Nahualli
RealPoor Master of Posts
Joined: 11 Oct 2002
Posts: 8461
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 Posted: 02/26/03 - 11:48 Post subject: How do you determine your "worth"?
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I've heard people say "I'm worth XYZ$"
What do they base this off of? Salary? Investments? 401k?
-Nah-
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GruntingCod
RealPoor Master of Posts
Joined: 11 Oct 2002
Posts: 6399
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Posted: 02/26/03 - 11:50 Post subject:
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If I still had this site where you put in your personal info and it says how much you are worth. I am worth something around 4.6mil.
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Mental_Hernia
RealPoor Guru
Joined: 14 Oct 2002
Posts: 3336
Location: Texas
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Posted: 02/26/03 - 11:55 Post subject:
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| GruntingCod wrote: | | I am worth something around 4.6mil. |
Lol
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sinrakin
RealPoor Master of Posts
Joined: 11 Oct 2002
Posts: 7044
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Posted: 02/26/03 - 11:56 Post subject:
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I assume it's the same way you'd evaluate the value of a company: assets - liabilities. So add up your cash, the value of your posessions (what you could sell them for, not what they cost you), your house, car, savings accounts, retirement plans, etc, then subract any outstanding mortgages, credit card balances, student loans, etc.
Strictly speaking, I suppose you should consider intangibles - if you have a college or professional degree that's probably "worth" something, if you have powerful connections that's probably worth something too. Not sure how to evaluate that though - that's why accounting is so hard.
For that matter, say you have a 5% home mortgage when interest rates are at 7%. That's essentially an "asset" too. I don't think you can count that sort of thing though, and I'm not sure how to value it.
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Akronn
RealPoor Master of Posts
Joined: 11 Oct 2002
Posts: 8752
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Posted: 02/26/03 - 12:13 Post subject:
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| GruntingCod wrote: | | If I still had this site where you put in your personal info and it says how much you are worth. I am worth something around 4.6mil. |
I remember that site! It was a fun one (using info like your IQ and education)...
Wish I could find it again
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compusmack
RealPoor Master of Posts
Joined: 15 Oct 2002
Posts: 6354
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Posted: 02/26/03 - 12:15 Post subject:
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| sinrakin wrote: | | I assume it's the same way you'd evaluate the value of a company: assets - liabilities. So add up your cash, the value of your posessions (what you could sell them for, not what they cost you), your house, car, savings accounts, retirement plans, etc, then subract any outstanding mortgages, credit card balances, student loans, etc. |
Yeah that's pretty much it.
But you have to remember, worth doesnt mean much if you dont/cant enjoy yourself with it. Having a huge retirement fund + house may look good on paper, but if you have to work 90+ hours per week to afford it you dont really have a good life.
There are many formulas for calculating where your networth should be based on your age, just to show you how well you are doing (compared to others).
Personally, I think you should (once you are out of school and in your major career) put 5-10% of your income in a retirement fund and get a house as soon as you have the financial stability. Both of those things directly increase your networth over time. Cars and other possessions tend to depreciate, so money spent on them rarely increases your networth on a longterm level.
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