Is a TV an Assets? || Net Worth Update
When I say that we include our cars in our net worth calculations, I get immediate push back. A lot of people think that cars, because they don't generate an income, can't be assets. It's normally followed up by, "what about a tv, sofa, coffee maker, or cell phone?"
So, I thought I'd talk about it in my next Financial Updated Video!
Net worth is simply your assets minus you liabilities. The accounting level term is equity. When considering assets, you want to get a realistic picture of where you are in the moment.
You also need to consider why this matters. Net worth is not as important as the increase of your net worth. If you have a $1 million net worth, but are losing $100,000 every year, it won't be long before you run into the red.
For us, a realistic picture is to about the $100's column (for now)!
That means things like coffee makers, kitchen appliances, and office supplies automatically get dropped. While they do have value, the amount of value they have doesn't factor into a net worth change worth tracking.
When considering other larger items, things like TV's, Kitchen Aid mixers, Computers, Cameras, Furniture, etc. we have 2 opinions.
1st, the net worth change is the main goal in tracking this metric. These smaller value items do change in value, but either not enough to track or right after purchase.
2nd, the update process for 20 small items is very tedious!!! Like I said, the difference is what matters when tracking Net Worth overtime. So keeping the habit is more important than getting every single detail perfect.
I will say, for insurance reasons, you should have a list of valuable stuff to supply if something terrible happens to your place. If you'd like to include this list in your tracking habit, be my guest!
Chapters
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00:00 - Net Worth Definition
01:05 - Our Assets
03:30 - Our Debts
04:01 - Equity and trends
05:08 - TV’s = Assets?
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Music by: @dcuttermusic
https://www.davidcuttermusic.com/
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