Day 4 photo

New to the Live Richer Challenge: Net Worth Edition? Learn more about it HERE.

Missed some of the Challenge tasks? Catch-up then come back…

Day 1: HEREWhat does net worth mean?

Day 2: HEREWhy is net worth important?

Day 3: HERE: Your Liabilities

 

Week 1: A Wealthy Mindset

Today’s Easy Financial Task: Add up your assets.

How to rock this task:

  • List your assets
  • Add up how much you own

 

Hey, hey, hey! Welcome to another day of the LRC: Net Worth Edition, Dream Catcher.

Yesterday, you listed all of your liabilities.

If you missed that task, make sure to circle back on it because you’ll need it for tomorrow’s task.

Now, for today…

Pull out the Your Net Worth worksheet, again.

(Get your’s if you missed it yesterday HERE.)

It’s time to list your assets.

 

Your Assets

As mentioned, assets are items that you own that hold value.

For a quick refresher, here are examples of assets:

  • Cash
  • Savings
  • Stocks and bonds
  • Land
  • Jewelry (figure out how much it’s worth by getting it appraised, or do a search online to see what similar pies are being sold for)
  • Art
  • Car
  • Collectibles
  • Other investments
  • Include the value of your retirement accounts
  • Also, include the cash surrender value of your life insurance policy as an asset in your net worth calculation. This is the money your insurance company pays if you voluntarily terminate your policy before its maturity (or before the insured event occurs).

 

What about income?

Determining your net worth is similar to taking a financial snapshot, you don’t consider your annual income, but rather how much money you have “in the bank” right now.

 

What About Assets You Pay for With a Loan?

If you have a loan against assets like your car or home, for this task, subtract the value from your loan balance.

You will write down the portion of the property that you technically own. Here’s the equation:

 

Property Value – Loan Balance = Asset (Equity)

 

For example:

If your home value is $300,000 and your home loan balance is $250,000, $50,000 is how much equity you have in the home.

 

****UBER IMPORTANT TO NOTE*****

 

Because you’ve ALREADY written down your loan amount as a liability yesterday on Day 3, I DO NOT want you to subtract your loan amount twice, once in the liability column and again in the assets column. Instead, write the TOTAL value of your home/car/motorcycle etc., in the asset column of your worksheet. These are called depreciating assets (minus the home, typically).

Example: Let’s pretend your entire net worth is your home and it’s worth $250,000, but you owe $200,000.

Your net worth is $50,000.  Assets ($250,000) – Liabilities ($200,000) = Net Worth ($50,000)

If instead of subtracting the total amount the house is worth, you subtract your equity ($50,000), from your liability ($200,000), your net worth will be -$150,000, which is wrong. Got it?

——–

Keepin’ It Real With Your Assets

There are some assets where determining true value can be difficult like Beanie Babies (Dang! I’m getting old), art collections, or antiques.

Be realistic here to make sure you’re not overstating the value of any assets.

There’s no benefit in inflating your assets because doing so will only distort your net worth.

We don’t want that!

Consider the fair market value for each of your assets. The fair market value is what your asset would sell for today.  

Not sure what that amount is?

Do some research online to see how much your assets have recently sold for.

For your home, you can use resources like:

 

For your car, you can use resources like:

 

Keep in mind that these websites are for estimates.

 

Go Forth and Write Down Your Assets

Have fuuuuuuun with this task, Dream Catchers!

Remember…

Your assets increase your net worth.

Give yourself a pat on the back for every single asset you write down today!

These are things that you worked hard for.

Here’s the net worth spreadsheet you began to fill out yesterday with your liabilities, use it again today and add your assets: Net Worth Spreadsheet

 

***EXTRA BONUS***

To help you increase your investments, Ellevest is redefining investing for women, and you’re sooo invited. Get exceptional tools to reach your biggest goals.

Start by getting your FREE, personalized investment plan from ElleVest. A financial advisor would typically charge you $1000 or more to create this plan for you. But I got the hook-up.

Get your free plan here:
http://thebudgetnistablog.com/ellevest

****

 

As always, be sure to check in with your accountability partner to double check that they’re keeping up with our daily tasks. Teamwork makes the dream work, and encouraging each other makes a difference!

Before setting out to work on this task, share what you’re doing with your tweeps:

Today, I wrote down each of my assets. Day 4: #LiveRicherChallenge #LRCnetworth Click To Tweet

 

Any questions about what should be included in your asset section?

Hit the comments below or reach out to the other Dream Catchers in the Live Richer Community.

Live richer,

Tiffany

 

You can reach out to me here:

Twitter: @thebudgetnista

Instagram: @thebudgetnista

Facebook: The Budgetnista

Private Forum: Dream Catchers : LIVE RICHER

P.S. Don’t forget to get your free Live Richer Challenge: Net Worth Edition Starter Kit. GET HERE. 

P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.

LRC Net Worth Calendar

Want to work through the Live Richer Challenge: Net Worth Edition in a workbook? It’s part of a bestselling series!

Click the link below and get your copy.

My Lisa Rule: I have 4 sisters and Lisa is the baby (well she’s not a baby anymore). Of all of my sisters, I’m the most protective over her. Before I share any product or service with you, it must pass my Lisa Rule.

What’s the Lisa Rule? If I would not advise Lisa to use a product or service, I won’t advise you to. YOU are my Lisas. I feel protective over you and your financial journey.

Ellevest passes my Lisa Rule. Yes, I am an affiliate of Ellevest, and I earn a commission off of referrals, but I would not recommend a product or service that I didn’t believe was helpful and useful.

 

  • Tia

    Hi, I noticed elsewhere when calculating net worth the entire value of the home was used as an asset instead of just the equity so to speak. Can you explain the reasoning behind using just the equity as an asset? It feels like I’m subtracting twice (property value – loan amt then assets -liabilities) but maybe I’m looking at it the wrong way. Thanks!

    • You’re absolutely right Tia.

      If you’re calculating your asset individually, my equation is correct, but when calculating your net worth and comparing it to your liabilities, it’s not.

      Here’s the update I wrote above:

      What About Assets You Pay for With a Loan?
      If you have a loan against assets like your car or home, for this task, subtract the value from your loan balance.

      You will write down the portion of the property that you technically own. Here’s the equation:

      Property Value – Loan Balance = Asset (Equity)

      For example:

      If your home value is $300,000 and your home loan balance is $250,000, $50,000 is how much equity you have in the home.

      ****UBER IMPORTANT TO NOTE*****

      Because you’ve ALREADY written down your loan amount as a liability yesterday on Day 4, I DO NOT want you to subtract your loan amount twice, once in the liability column and again in the assets column. Instead, write the TOTAL value of your home/car/motorcycle etc., in the asset column of your worksheet.These are called depreciating assets.

      Example: Let’s pretend your entire net worth is your home and it’s worth $250,000, but you owe $200,000.

      Your net worth is $50,000. Assets ($250,000) – Liabilities ($200,000) = Net Worth ($50,000)

      If instead of subtracting the total amount the house is worth, you subtract your equity ($50,000), from your liability ($200,000), your net worth will be -$150,000, which is wrong. Got it?

      • Tia

        Thank you! I am enjoying this challenge. It’s very eye-opening for me.

      • Tammi Williams

        I don’t understand this part
        My car loan is more than the car’s value. If I use the above equation, I get a negative number. Is that negative my liability?
        Do I still write the car value in asset?

        • Dena Dyer

          Hello, Tammi!
          I am NOT one of the experts, but if you owe more than the car is worth, the car is not an asset.

          • Tammi Williams

            Thank-you
            I thought so
            So I would just enter the total loan amount in liability, correct?

          • Dena Dyer

            You are very welcome!

            I believe that your car is worth something (Kelly Blue Book), so then you can deduct that amount from your loan amount.

        • Put the value of the car on the assets list, and how much you owe on it, on your liabilities list.

          You OWN the car, but you OWE some of what it’s worth.

          Once you add up both lists and subtract them you’ll get a bigger picture of your total net worth.

          • dontea_hunter

            So in that case, when you add the part that you STILL OWE on your car to the liabilities list, that should be the same number from what we added from Day 3, when we initially wrote down our car loan as a liability, correct?

  • Sandy Eyl

    Should my retirement accounts be assets too? For instance a 401k or IRA?

    • Yup!

      • Tavia Polly

        I was just going to ask this question! Things such as life insurance would not be considered an asset correct?

        • The Cash-In value is considered an asset

          • Tavia Polly

            I’m sorry I’m confused, “cash-in” value?

  • Layla

    When adding stocks to our assets should we count our capital gains/dividends as well or only the total amount we have contributed to our IRA, etc.?

  • DrTia Harris

    Is my income an asset or is it only tangible things already received?

  • Shantelle Guyton

    Opened my Ellevest account today

    • Yay!

    • Jeanette

      Ellevest confused the heck out of me! Glad you were able to make use of the company. I just got lost in the graphs, charts and numbers after responding to the questions. I just clicked out. Too much for me

  • Jamie Cheatwood

    How does life insurance work here?

  • Cristina Harris

    Ahhhhhh! Total value of the home is the asset and not just the equity. Good to know! I’m also wondering about income and how to include that as an asset – annual salary, take home amount, cash left after monthly bills?

  • Nicole Andrus

    I seriously have no assets, unless I can count my teacher’s retirement account, which I can’t touch until retirement. Would that be considered an asset?

  • Annette Houston

    Omg , I seriously have no assets I fill terrible. This challenge is definitely a eye opener for me. I’m sure I owe on my car more than it’s worth 😰

    • Patty Palmer

      Annette, I can’t tell you how to feel, but I can suggest that you cry with an agenda. We are going to get through this together.

      • Annette Houston

        Thank you

    • Nicole Garris

      same here. but this time next year we will have it together.

  • Michelle Twix George

    After completing today’s challenge I recognized that my net worth is in the positive and not negative as i thought originally. Loving these challenges. Thanks for the knowledge Budgetnista

  • Love Moore

    This is the year to build assets. Save and invest.

  • Joyce Humphreys

    Today is truly a Challenge for me I do not own a home nor land nor any 401-k What could i use for assets? (TV’s Computers,Stereo Equipment?).

  • Trici Coleman

    This was definitely an eye opener for me….I have a few stocks but otherwise its time to increase my assets….

  • Amy Nieto-Cruz

    OH wow! I am surprised my little Kia Rio Hatchback is an asset! Great job, Little Marshmallow (it’s white and shaped like said food item lol)!

  • Patty Palmer

    Merciful Father, when I put down my assets on paper. It just got really real. There is much work to be done. I am nowhere near where I thought I was. No choice but to do better, especially with reality staring me in the face.

  • Traveya Brown

    I seriously struggled with calculating the value of my car ( how much its worth, verses the car loan, verses how much I have pd so far) math just is not my subject. But I will ask if I purchased my car loan through my bank and added Gap and extended warranty do I subtract that from the actual loan amount?… So confused today 🙁

    • Put the value of the car on the assets list, and how much you owe on it, on your liabilities list.

      You OWN the car, but you OWE some of what it’s worth.

      Once you add up both lists and subtract them you’ll get a bigger picture of your total net worth.

  • Royal Queenmother Brown

    I’m working on my net worth with a positive mind. I’m in the negative however my action plans for my goals will eventually have me debt free and creating wealth for me, my family and community. #LiveRicherChallenge #NetWorth Blessings to you Tiffany @the budgetnista

  • Twyla McDonald

    My assets are almost half of my liabilities…I definitely need to increase my assets!

  • Starr Pack

    I feel so horrible. I only have 10,000 in assets. smh. I’m kind of speechless and very disappointed in myself. On my way right now to Ellevest.

  • Pamela Hudson

    I have only a small amount of assets that is some jewelry, which is worth less than a $1,000 dollars. I feel horrible

  • Charmaine Glover

    I am still working on my sheet, this really got me thinking! I have to seek out my information and I feel really bad that I never really paid any attention to this before.

  • Safiya Nesmith

    This activity was definitely an eye opener. I have assets I completely forgot about. I really need to shift my focus. So glad I signed up!

  • Lisa Dent

    So glad to know that my assets are more than my liabilities. I honestly thought I was in the RED. I still have a LONNNNNG way to go but I’m grateful to see these numbers and I’m willing to do the work!

  • Dionne Shaw Bush

    #SpeakOut : OMWow‼️ Lots of work to be done ✅ Rolling Up my sleeves and digging in ✔️ Next year will NOT be like this 💯

  • Gabby Robinson

    Just totaled my assets and I have $51,302! The majority of this is retirement savings in my IRA, but at least I have something to my name. I know it’s not much, but it’s a start. I didn’t even know I had this much. This makes me excited and want to strive to increase that number greatly by the end of 2018.

  • Deborah Ivey

    I have $55,000 in assets.

  • Fafali Yaa – Serenity

    This is my Season for Grace for Favor….I am expecting nothing but Great things to come from me Finally putting my big girl “draws” on and Eliminating this Debt!!! I see Financial Freedom in my Future!!!

  • thanible2002

    Can you include life insurance that does not have a cash surrender value? I have supplemental life insurance through my employer in addition to the life insurance benefit that is 3 times my salary. These would only be paid in the event I am terminally ill or deceased. Would that type of life insurance count as an asset?

  • Jalisa Ray

    Wow! I never thought to figure out how much my car was worth and include it into my assets. It’s not much but it’s more than I thought I had.

  • Crystal Morgan

    Calculated on Day 1 when doing Net Worth exercise. I asked my husband to guess a number of where we were at. Being the silly person that he is he guessed $10. I explained to him what Net Worth actually means, how it’s calculated, etc. I’m pleased that we are in the 6 figures and looking forward to doing more towards our financial freedom this year and beyond.

  • McKenzie Green

    I actually have assets…WOW!!! Its not much but its a start $12,838

  • Michaela Cornwall

    I don’t have very much assets at all. Basically just my retirement which isn’t very much, but like some other members said…we are going to get through this together.

  • Jeanette

    Falling behind because i’ve been home sick for the past 6 days, but I’m drudging on. Just listed my assets and they total $45,164.63. Not to shabby considering I didn’t think I had any assets to speak of. My liabilities still significantly dwarf my assets, but being clear on the numbers gives me a clear path to move in. Onward and Upward!!!!

  • Roslyn Famous

    If my car value according to the blue book is 5,154 and I still owe 10,000 on the car, what is my equity? (5154-10,000= -4,846??)

  • Shamika Hartgrove

    This is so awesome!!!Looking forward to completing this task and seeing it all on paper…thank you so much for the breakdown

  • Lisa

    I have assets based on my savings, Roth 401k, and retirement plans. Feeeling pretty good about my net worth. The majority of my debt is student loans. Im still living in apt but really want to buy a condo or house.

  • Shamika Hartgrove

    This challenge was definitely real for me😮. I DEFINITELY have more liabilities than assets but I will not let that bring me down. I am just going to keep pushing until my situation is the opposite and my assets outweigh my liabilities 👍🏽