Many Happy Returns The Unbalanced Sheet: What Is Your Net Worth, Really?
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Oct 8, 2025 Discover the complexities of calculating net worth beyond simple assets minus liabilities. Explore whether to include your home and how to value your unique property. Debate the role of pensions, student loans, and small business equity in your financial picture. Learn about different metrics and the importance of tracking net worth over time. Plus, tackle the intriguing question of how much money it takes to be considered rich and reflect on the relationship between wealth and personal happiness.
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Value Businesses As Market Price
- Value small business equity by realistic buyer multiples or expected sale price, not just enthusiasm.
- Do not mix company debts into personal liabilities unless you legally guarantee them.
Pick A Base Currency And Track Constant FX
- Choose a base currency (the one you spend in most) and convert all foreign assets to that for a single net worth view.
- Also maintain a constant-currency tab to track true portfolio performance without FX noise.
Keep Individual And Household Sheets
- Maintain both individual and household balance sheets: individuals for tax planning and households for shared liability views.
- Use joint tracking to spot imbalances like unequal pensions and to coordinate tax-efficient transfers.