Short answer: Sure, whatever you want belongs in it ;)
I get quite a few questions on whether ____ belongs in your net worth or not, and I thought I’d share with you all what I usually respond back since I don’t believe I’ve ever blogged about this before (yayyyy something new & shiny!). Here’s one of those sample questions I recently got:
“Give or take a couple hundred bucks, I figured out that my baseball collection is worth every bit of $3,000. Would it be a good idea to include that and my car in my “net worth,” or should I just leave that out?”
Now, I know what you’re thinking – “WTF? No way! Who cares about your stupid baseball cards?” and you’d be right. But you’d also be wrong ;) At least according to the book of J. Money.
The whole point of tracking your net worth is to show (yourself) what your current financial position is. Your life’s accumulation of “stuff,” if you will. All your money, your homes, your cars, your DEBTS, your mortgages, your credit cards – the grand total of all Assets minus Liabilities. Although we all tend to just plop in the BIG guys into our spreadsheets, it doesn’t mean all our other belongings are worth squat. Right?
Think about it. If you were to go through every room of your house and start unloading stuff – the couches, tvs, tables, furniture, stereos, etc – you’d have a decent amount of money in your hands, no? So why not factor all this in when taking that big snapshot of what you’re worth?
Some people do. But the majority of us don’t (at least the ones who talk about it here on all our finance blogs). I offer two reasons why that may be:
- Because it seems silly.
- Because it’s a bitch to track ;)
Do you know how long it takes us to track the simple stuff in our lives already? The fact that we sit down and do it every single month is pretty shocking enough (I’ll pretend I can’t hear your thoughts Mr./Mrs. non-tracker). It’s way too overwhelming to track our entire lives. That, and the odds that you’d ever have to sell it all is very VERY slim. So I don’t see the point, personally.
But that doesn’t mean it’s the right way to do things. I’d actually argue that those who DO track everything has a much better picture of what their net worth truly is. If you can account for every last item in your house, and decently valuate them (which is very hard to do, btw – most people think their stuff is totally worth way more than it is), you’d have a much clearer understanding of your property’s value. Aka your Assets column. Same goes with your Liabilities, only those are usually easier to list (but don’t forget about all the money you own Uncle Joe or Sister Sue for that plane ticket you borrowed money for!).
What I’m trying to say is that the more you know about your situation, the better. If you don’t think your pile of baseball cards are worth anything, then don’t account for ’em. And if you wanna add in your new 60 inch flat screen valued at $4,000, great! Just remember to apply the debt to the other column while you’re at it ;)
It really comes down to what YOU think is worth tracking. Ask yourself what you’re trying to get out of this whole process, and stick to that. At the end of the day, you’re the only one who’s gonna care about this ultimate number.
PS: If you’re just getting started in your journey, here are a few good resources to help track your money. Doesn’t matter which route you go, just that it ends up sticking!
- The "Budget/Net Worth" spreadsheet - the colorful Excel template I personally use.
- The "Money Snapshot" spreadsheet - a simple Excel template I created for my former $$$ clients
If you're not a spreadsheet guy like me and prefer something more automated (which is fine, whatever gets you to take action!), you can try your hand with a free Personal Capital account instead.
Personal Capital is a cool tool that connects with your bank & investment accounts to give you an automated way to track your net worth. You'll get a crystal clear picture of how your spending and investments affect your financial goals (early retirement?), and it's super easy to use.
It only takes a couple minutes to set up and you can grab your free account here. They also do a lot of other cool stuff as well which my early retired friend Justin covers in our full review of Personal Capital - check it out here: Why I Use Personal Capital Almost Every Single Day.
(There's also Mint.com too btw which is also free and automated, but its more focused on day-to-day budgeting rather than long-term net worth building)
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I agree, it’s all about the individual. I’ve seen people who think that car values should be in net worth, some that think it’s the worst practice mankind has seen since double dipping a potato chip. Our net worth calculation is a little complex, and often I wonder if I need to simplify it. I started the practice of earmarking funds for various things (home maintenance projects, new cars, furniture, etc.) and then writing off some or all of it each month when calculating net worth. It helps temper big fluctuations when big expenses come up, but I wonder if it’s worth it. But, it works so far, so we’ll see.
I keep all assets that will lose value out of my net worth because the chances are good that I’m going to use them until they need replacing and never sell.
I use Mint.com to track my net worth, and they include house, car, and “valuable property” in it (although of course it’s your choice whether to add those to the site). I figure if it’s valuable enough to specifically insure (car, camera equipment) it’s valuable enough to include in my net worth. (btw Mint.com tracks everything automatically and emails you weekly updates… it’s not much work to keep track!)
Right now I just track net worth as how much we have in all bank and retirement accounts, since the only debt we have is from student loans and they are about gone. Once we buy a house, we will include that too and cars, but its a little tedious to track everything. And like you said are you really going to sell everything you own?
I agree with Andrew on this one. Most likely those tiny items people add to their net worth would not sell for the price they imagine — if at all. And adding those to the bottom line only offers a false perspective. Just watch one of those pawn broker reality shows to see how people over value their items and get nothing close to that price in cash.
I calculated my net worth via baseball cards when I was 9. I don’t have any now. :(
I concur baseball cards should be figured into your net worth, after all, you can sell them for cash and that’s figured into your net worth. So why not figure baseball cards or other antiques into your net worth.
This reminds me to see if I have any rookie cards of superstars that are worth some value. I got a ton of baseball/hockey cards from when I was a kid and have no idea what they are worth. I never really considered adding them to my net worth.
I sure don’t want to be repeating the old saying “I used to be a millionaire until my mom threw away my baseball cards.” haha
Just like a car or house, if you can sell it count it. To some it is an investment asset.
What about beanie babies? I hear if you invested in them during the ’90s you could have quite your job! :)
or quit your job.
… and remember these ‘items’ are only worth what you can get for them. That top-of-the-line $4000 television is worth MAYBE half that once it’s left the showroom. Which is why most people wouldn’t include items like that, it’s too hard to judge their value (as opposed to vehicles, where there are tracking and estimation methods).
I would include the collection, though, because it could be sold to a collector. The original questionner may never do that, but it’s a very good option, and should be included in my opinion. They also may want to consider having it insured, too.
I’d only include it if you have insurance on it, that’s been helpful for me. I don’t include my comic books in my net worth because I refuse to spring for the extra insurance on them I count them in the idea of what I can bring in yard sale/ craigslist wise nothing more.
I think you add them but you have to be conservative and understand that just because you think it’s worth something doesn’t mean you will actually get that amount if you sold them.
Before you count $3000 in baseball cards I offer you two pieces of advice. Read “Mint Condition” a book about the rise and fall of baseball cards and then talk to the proprietor of a baseball card shop. (If you can find one)
Even if you have 100,000 common cards that are “valued” by Becketts at 5-8 cents a piece, you absolutely will not be able to get $8,000 for those cards. No card shop will take those off your hands.
I was in a card shop the other day and asked the owner what someone had to have in order for him to take a look at their collection. He said that he pretty much won’t look at anything after 1971. (Read: My entire collection.) There is simply too much inventory of cards from the 70s to present to be of any value.
If you’re going to count a pile of cardboard in your net worth, you better be sure that there’s someone willing to buy it.
Interesting question to think about. I agree that baseball cards definitely fall into the category of property you own that could be sold for cash, and therefore should be a part of your net worth, including everything you own and trying to track it would be really difficult. Should you also include your plasma TV, living room furniture, and closet full of shoe? I think it only makes sense to track high worth possessions that could be easily sold.
I don’t know why anyone bothers with questionable items or even cars. Is it just so its higher so one feels better?
The “Ebay price” is the best way to see what your cards are worth — not the Beckett price.
I simply use a blanket number of $10,000 to cover my stuff (minus car of course). This includes flat screen television, furniture, laptops, etc. It may not be all that accurate. However, the inaccuracies are minimal in the grand scheme of our household $400,000+ net worth.
If our net worth was lower, it may be a bigger deal as it would be a larger percentage. The lesson once again is that it is all relative.
Ditto on “value” vs. “finding someone nutty enough to buy them at that price.” I got a bunch of sports memorabilia in the community property split. Most of it was unsaleable despite the valuations my now-ex put on them. I wound up pitching a bunch of it into a recycle bin because I didn’t think it would be easy/profitable to find someone who wanted a 1982 women’s volleyball media guide from a small Pennsylvania college.
Maybe you’ll be lucky enough to find collectors with similar tastes and open wallets. Don’t bet on it.
I don’t add depreciable assets to the net worth. In the long run, it won’t be worth anything. If I sell it and get cash money, then yeah the cash will be added to the net worth column.
Hi J, I had to read this and stick it in my roundup tomorrow as my husband collects baseball cards :) We have fantasies of selling them in a side business during retirement. In the mean time, they aren’t in our net worth now as we like to be conservative and focus mainly on financial and real estate assets. After all, I don’t think I would sell our furniture to increase our cash balance!
Interesting responses guys. I like the idea of “if it’s insured, count it.” If I added in our diamonds our worth would be decently higher ;) The wife’s ring and my bling! haha… Also, I realized today that I’m sitting on a good $3k worth of cards myself, if not more. Including a Mickey Mantle and some other jems! Really want to add to my net worth now, haha… doubt I will though.
Oh, and I’ll have to give a thumbs up to those who mentioned:
1) Valuing your cards’ worth by the “ebay price”
and 2) Putting down your value of all this other stuff at $10,000 or some other round number. That way you don’t have to track all the time, and odds are if you got rid of it all you’d at least make that amount back (if you have a house-full like some of us).
Your responses await:
@Money Beagle – I hear the car thing too all the time…. I kinda do get it, but at the same time it’s hard to have $XXX debt on one side and not the asset it’s attached to on the other, ya know?
@Andrew – Oooh now that’s a way to do it. I can dig that.
@Sarah Fowler – a) Love Mint! b) Yeah, you know –
@Jonathan – Yeah, kinda boring too tracking things that don’t really fluctuate much. Although that may be personal preference, haha…
@Leigh – Yep, very hard to find the true “value” until the day you go to sell it!
@Kevin @ Thousandaire.com – Haha… cuz you’re OLD!! I say you go out and buy a couple shiney new packs of Upper Deck ;)
@Mike Choi – Haha, that’s for damn sure. I still have on of my Micky Mantle’s actually (traded like 100 good cards for it back in the day when I realized these oldies are probably the best investments, if you can call ’em that)
@Jake – Yep!
@Kasey – True :) Just like if you have a crystal ball!
@Michael Senchuk – For sure – $4k brand new tv ain’t worth it once you start using it!
@Kevin I – Doesn’t that suck though? that they can be valued at $X amount but you can never (usually) get that $ for it? Oh well. Hope you at least enjoy the stories ;)
@Craig – Yep! Gotta be conservative in those valuations.
@Grant – well, we don’t really know *how* the emailer came to $3,000. It’s possible it’s valued at $10k and he lowered it when thinking to include in his net worth. But yeah, I get what you’re saying. Crazy tha dealer doesn’t look after ’71! Kinda makes sense though…. good thing I saved all my oldies ;)
@Jane Sanders – Yeah, probably.
@Evan – You don’t understand cars? What if you had an Escalade and owed $30k on it? Would you only add the debt and not the value of, say, kbb or something? you’ve piqued my interest, sir ;)
@Josh – Nice! Def. conservative there.
@Lazy Man and Money – Also nice! I can totally rock to that… adding it to the things to consider ;) Thx opposite-of-lazy!
@Donna Freedman – Much better chance now w/ the age of the internet than before ;)
@retirebyforty – U.S. dollars aren’t worth much in the long run either! (bah-dum-ching)
@Barb Friedberg – Haha, I would. If someone came and gave me like $5k I’d give them all my furniture and go minimalist! haha… except for my computer desk, that would be hardcore ;) Thx for posting about it! I like our husband already.
GREAT, insightful post. I agree that taking an inventory is a b**** to track. But did you know that there are companies around that provide exactly that service?
As soon as I get my house in order (it’s kind of a mess since we moved in, stuff in boxes, in the attic, etc). we are going to call Hartman Inventory at http://www.hartmaninventory.com to inventory all our “stuff.”
There’s another very good reason for it besides just tracking your net worth. If anything happens (fire, flood, theft, etc.) and you have to make an insurance claim — if you think it’s hard to track while you’re looking at your stuff, imagine having to remember it all!
Using “blanket value” is fine until the insurance inspector starts nickel-and-diming you. For less than a fraction of the value of everything in your home (under $1000 or so, depending on the size of your house) you can get a professional inventory, on file, backed up remotely.
Then you can decide if you want to add it all to your net worth, or just be happy you finally have a list. ;)
I know this sounds kind of salesy, but I had never heard about home inventory until I met the Hartmans and I wanted to let your readers (and you) know it’s one choice if you do want to count up all your items and their value. Personally, I think it would be kind of cool to know and yes, it would make me feel better about that bottom line number. (Or at least tell me where the heck all my money goes! LOL)
“It’s a bitch to track” is my #1 reason that I only include our retirement accounts, our stocks, our cash, our house, and our cars… :-)
@Dawn Allcot – Haha, luckily I know your pretty face so I know it’s not a sales pitch ;) And you totally reminded me of that stuff too – forgot companies did that! In fact, my dad and sister almost formed one after talking to a friend who does it. They were going to document everything you owned via photographs and notes, and then compile it all onto a CD for “just in case” needs. DEF a good idea. Thanks for sharing!
@Budgeting in the Fun Stuff – I think we’re joined by many on that one ;)
I include my two cars in my net worth calculation, but at a “gone in a day price”.
For example, both of them are worth about $1200 bluebook, but I have one listed at $600 and the other listed as $200 (because it can’t currently be driven) in my net worth calculation.
Including items in your calculation is fine, but increasing your net worth by the full value of your couch or TV is you just fooling yourself.
That’s a good way of doing it. I’ve sold two dead cars on eBay before. There’s always someone with the right parts (and amount of time/patience) to fix ’em up!
@J$: I probably should have been clearer. What I pitched were hundreds and hundreds of media guides and programs, most from small colleges in the 1980s and 1990s. Early on I had thought I’d use the Internet to find buyers. I even tried it for some of the stuff from bigger schools and a few major league teams. No luck. Finally I decided my life was too hectic to spend hours trying to make a $3 to $5 sale. I put some on Freecycle, outright gave some to a dealer who’d bought all the baseball cards I had, and threw the rest in the Dumpster.
Forgot to mention: This stuff was taking up physical and psychological room in my life. The boxes were stacked in my bedroom and I’d finally had enough.
Now if only I could get someone to buy the oil painting of the buckskin-clad mountain man with a dead animal on his head….. :-P
ahahaha….. silly girl. definitely understand the “physical and psychological” build-up though – just more reason for me to stick with my new minimalist plan!
I think it does belong in a net worth. It does seem like you have to be a savvy collector and be diligent about tracking them. I’m not a collector though it seems too involved. lol. But if someone wants to do it then good for them, to each his own. :)