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7 Common Items Missing from Your Financial Net Worth Statement


7 Common Items Missing from Your Financial Net Worth Statement

Your financial net worth statement is a primary benchmarking tool that not only inventories the details of your wealth, but it can also help you monitor your financial progress.

 We use this tool with every client and often find these 7 common line items most fail to consider and report on their financial net worth statement:

 1. Cars and other motor vehicles

 Understandably, most people exclude these depreciating assets from their net worth, unless they are collectibles. However, the value of cars or other motorized vehicles lies in the money you receive when you sell them. Thus, they should be under the “Other” category on your net worth statement.

 2. Collectibles

 This includes luxury handbags, coins, artwork, and other collector’s items. Some view their collection as merely a hobby and do not consider it “serious” enough to be part of their worth. However, if the total value of the collection exceeds $2,000, then it may be worth it to include on your net worth statement. 

We worked with a client who has a large collection of Jordans totaling about $17,000. Originally, he thought of his collection as a fun hobby for personal enjoyment, not realizing that the sneaker market is a billion dollar industry. We included the value of his collection on his net worth statement since there’s a significant market for it.

 3. Jewelry

 If you have insurance on any piece of jewelry or collection of jewelry, the jewelry needs to be included because of its value. As an example, most married couples forget to include their wedding bands and engagement rings.

 4. Cash value on life insurance

 If you own a permanent life insurance policy, such as whole life or universal life, you more than likely have cash value stored with the policy. Although life insurance is not a vehicle for savings, a permanent life insurance policy has a cash value feature in which a portion of your paid premiums is “set aside” within the policy and earns interest.

 5. Taxes and liens

 If you failed to pay taxes and the IRS or state puts a lien – a right to hold possession of property until the debt is paid  – on any asset, it needs to be included in your net worth under the “Debt/Liabilities” column because you owe money to an entity.

 6. Hospital bills

 Outstanding hospital bills need to be included in the “Debt/Liabilities” category of your net worth statement, regardless of repayment plans you may have with the hospital.

 7. Student loans

 Currently, the graduate or professional student loan interest rate is 6.08% nationally, while the average interest you can potentially earn in a savings account in this type of market is around 0.36%. By not taking your student loans seriously and paying them off, your money is eaten up by 5.72% each year. And that’s not even considering inflation yet!

The Bottom Line: 

Being very detailed in taking inventory of all that you own as well as what you owe goes far towards making you accountable in monitoring your wealth to grow it. Be more aware of your finances.

Start building the life you’ve always wanted.

This data is for informational purposes only and Capital Benchmark Partners, LLC ("CBP") is not affiliated with any of the businesses mentioned nor endorses them. CBP is not endorsed by any third party entities for their inclusion in this article nor is compensated for mentioning them. Past performance is not a guarantee of future results. The information contained herein has been obtained from sources believed to be reliable but the accuracy of the information cannot be guaranteed.

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