Do you count your car when determining your net worth ?
The definition of net worth is " the total wealth of an individual, company, or household, taking account of all financial assets and liabilities" Your car is an asset minus any loans (liabilities).
Certainly. A net worth statement is assets and liabilities. A car is definitely an asset even though it declines in value.
I don’t, and I wouldn’t think most people would. An exception would be if you have significant money tied up in them, like a collection of valuable vintage or rare collectable cars.
Cars depreciate rapidly and their value is, to a considerable extent, subjective. For most folks personal property doesn’t make up a significant share of their net worth
As you get older you find that “stuff” like cars and personal property are more trouble than they are worth.
Its literally an asset titled in your name or whatever name you register it with. The fact that it it normally loses value makes no difference. Lots of assets can go down in value (real estate during the GFC). You can get a loan against it. Its definitely an asset.
Technically yes, but I think most folks dont go to that detail level unless it has a significant affect on your net worth, or they are preparing a formal financial statement.
Likewise, I include the value of my home, but not the furniture. I include the $50mil Renoir that I (don’t) have, but not the $500 painting from a boutique gallery. So, for a general picture of my worth, I include my properties and investments, less any liabilities. It puts me in the correct ballpark.
From a strictly technical point of view, I agree. But how much money are we talking about?
For most folks, I’d guess that $20-$30K would be the extent of it. With a few bucks invested in paper assets most people will see a swing like that in their net worth many times a year.
Yes it’s counted in net worth. But adjusting the net worth to not include depreciating assets can be wise to know what your net worth will be if your car needed replacement and the value was $0
Thanks for the input all.