Net Worth Percentile Calculator

[cfbfan23]

IMO you should include any mortgage debt but not the value of the house you live in. Thats how I did it. The house you live in is a liability, because you always have to live somewhere. You should include a conservative market value and any mortgage debt for an investment property.

I kind of get where you're coming from and see you're trying to be conservative, but I think your calculation has serious flaws when it comes to taking a snapshot of financial position.

For example:

Person A has $200K cash, $600K of investments (stocks and bonds) and owns a house worth $550K (with $150K remaining on the mortgage).

Person B has $200K cash, $600K of investments (stocks and bonds), has $50K in outstanding student loans and has always rented a home.

In your calculation:

Person A has a net worth of $650K ($200K + $600K - $150K).

Person B has a net worth of $750K ($200K + $600K - $50K).

I have a very hard time believing Person B is in a better financial position than Person A.

 

[Formerly Rockymtnole]

I’d say person A has a net worth of $1.2m in that example.

 

[CJ Beat Hard]

92nd

 

[cfbfan23]

I’d say person A has a net worth of $1.2m in that example.

I agree. But I do think it's important to be very realistic in what the FMV of the home is worth and also realize that it's potentially a lot less liquid.

 

[thewop]

I kind of get where you're coming from and see you're trying to be conservative, but I think your calculation has serious flaws when it comes to taking a snapshot of financial position.

For example:

Person A has $200K cash, $600K of investments (stocks and bonds) and owns a house worth $550K (with $150K remaining on the mortgage).

Person B has $200K cash, $600K of investments (stocks and bonds), has $50K in outstanding student loans and has always rented a home.

In your calculation:

Person A has a net worth of $650K ($200K + $600K - $150K).

Person B has a net worth of $750K ($200K + $600K - $50K).

I have a very hard time believing Person B is in a better financial position than Person A.

I understand, but I don't view a home as an asset the same way an investment is. The home you live in can't just be liquidated, because you have to live somewhere. Sure, person A is better off and has more "wealth," but if both of them cashed out everything that could be cashed out tomorrow, person B would, as you point out, have $750k, while person A would have $650k. Person A would have a place to live rent free (which has value, and could be sold eventually), while Person B would have another rent payment due next month.

 

[Formerly Rockymtnole]

I understand, but I don't view a home as an asset the same way an investment is. The home you live in can't just be liquidated, because you have to live somewhere. Sure, person A is better off and has more "wealth," but if both of them cashed out everything that could be cashed out tomorrow, person B would, as you point out, have $750k, while person A would have $650k. Person A would have a place to live rent free (which has value, and could be sold eventually), while Person B would have another rent payment due next month.

But net worth is net worth. Sounds like you’re calculating liquid assets or something, which is fine but a different measurement.

 

[anon_01irjibf16qqj]

33

 

[cfbfan23]

I understand, but I don't view a home as an asset the same way an investment is. The home you live in can't just be liquidated, because you have to live somewhere. Sure, person A is better off and has more "wealth," but if both of them cashed out everything that could be cashed out tomorrow, person B would, as you point out, have $750k, while person A would have $650k. Person A would have a place to live rent free (which has value, and could be sold eventually), while Person B would have another rent payment due next month.

Relatively illiquid assets (compared to publicy traded stocks and bonds) need to be included in the calaculation, but also need to have their illiquidity acknowledged. A home is just a real estate investment that doesn't provide rental income. If you include other realestate investments, you should include your home.

 

[UKGrad93]

93

 

[goldmom]

85, but I feel very poor. I've always been insecure about money, though, even when my husband was alive, making big $$$ and we had seven figure net worth.
I have a decent monthly retirement income. That's not part of my net worth, though.
And I also work part time. I can't take boredom.

 

[cfbfan23]

97th.

 

[shoot_the_three]

First liar doesn't stand a chance...78