Net Worth Spreadsheet:
How’s it going everybody this is beat the bush today i’m gonna show you how to calculate your net worth manually and why this is important now i think calculating net worth is great in itself just the act of doing it will actually increase your net worth because after you start doing it you’ll realize what contributes your net worth and what deduct from it the whole
Idea with net worth is simple how much is everything that you own worth today if you liquidate everything now you might be tempted to use an app that tracks your network maybe you log on to all your bank accounts all within the same app and then it will automatically pull your bank account your brokerage account your credit card account and then it’ll automatically
Figure this out for you without you having to do a thing the main issue i have with these apps is that when you give a company all your login information you don’t know if they’re gonna store this securely and there’s a lot of data breaches going on personally i do not think i can trust one single company with all my login information of all my financial data so
This is why i keep all my login information separately from any cloud service or anything i keep it locally on a hard drive that’s password protected and then i manually go into each one of my account every single month and i put all this information manually into a spreadsheet now this is just a typical spreadsheet you can create one yourself i’ll leave a template
For one of these down in the video description envelope this is gonna be in my dropbox and you can modify any way you want you can add lines to it you can add extra calculations and this is the benefit of having a spreadsheet because if you want to measure your net worth in a certain way maybe you want to add financial instruments that’s worth something that other
Apps just does not calculate then you can do so just manually in an excel spreadsheet the other thing i want to address before going deep into how to calculate net worth is should you calculate home equity now i’m not even gonna try to answer this because some people like to add home equity to their net worth and some people don’t i personally do both of them in
The spreadsheet you can look at your net worth with home equity and your net worth without home equity and within that special you can look at liquidated assets – credit card debt you can also look how much mortgage balance you have you know anything that you want you chart it out on the spreadsheet yourself i’m just gonna go through this spreadsheet and just talk
About each item and why it is included the first section is cash and equivalents this is very obvious right anything that is cash liquid in a savings account in a cd you put all these in in checking accounts savings account now i added in gift cards of significant value roughly a couple years ago or so because sometimes i put significant amount in gift cards maybe
Five hundred dollars in amazon gift cards maybe something in best buy gift cards so i ended up including this just because i feel like there’s some value there and you can actually pretty easily liquidate this and turn it back into cash but i just take the value as is sometimes these amounts are so little that you might think that oh i don’t really want to add
All this but by the time you add a lot of little things together you know $100 here and then you do this like ten times that’s like another thousand dollars to your network something that i added to this network calculation and this is version two of the spreadsheet by the way it’s utility credits i get 5% cash back on my utility and sometimes i have to monitor
That i actually get 5% cash back within a certain quarter so i might end up paying in advance for my pg and e my power electric bill my water bill my trash bill so i might have like up to 500 or 600 $700 in my utility account at any one point so when you add this up its significant value although you can argue that you can’t exactly liquidate this because they’re
Not gonna refund you the money right but personally i consider this pretty liquid because if i’m gonna live in the same place and i’m gonna pay fifty to seventy dollars just in utilities every month this is cash just not gonna come out of my account this is gonna come out of you know this little utility savings account that’s with them for now so like i said if
You don’t like the way i calculate this you can certainly just you know zero it out you can also get as detailed as you want for example you can add value that’s in your tol tags your public transit cards that have stored value if you have a big bottle of you might want to count it and you can add that to it if you want although personally these three things that
I just mentioned i don’t add them in personally right now nyx things are any kind of immediate kind of credit card debts or property tax debt or federal and state taxes that these things i feel they’re gonna get subtracted out from your networks pretty quickly like within a month or so so as soon as i find out that i owe credit card debt property tax federal or
State tax i tend to add this into my network so that it gets deducted from it so that it would reflect my actual net worth as soon as i know i have these bills to pay as i was saying your net worth is basically everything that you can liquidate easily and subtract out all your debts and obligations for example mortgages credit card debt student loan personal loans
So let’s move on to the loans aspect of it now you might want to put on your student loan balance it might be twenty forty thousand dollars one hundred thousand dollars car loan balance if you have a car loan and then a personal loan balance and any kind of debt obligation that you have there’s a huge balance of it you want to put that in however i do not count
Monthly payments like if you have like alimony or something then this is something i do not calculate because this is not a lump sum this is a monthly payment so then this does not get factored into your net worth this is more like a cash flow argument where if you have some sort of monthly payment to someone else of a settlement or something like that then this is
More like it reduces your cash flow so that you cannot increase your net worth as quickly and then now let’s move on to investments obviously these ads to your net worth you have brokerage account the current value usually i do the calculation on the first of the month and i try to do it roughly around the same time maybe if i miss a day or two that’s okay i put it
In the spreadsheet saying the time at which i calculated the net worth is let’s say april 5th of 2020 i have to mention that you probably don’t want to do your net worth calculation if you do it manually you don’t want to do it every day i’d say it probably takes me about 15 to 20 minutes to just log into all of my accounts check the balance and then transfer that
Information manually i type all these numbers in monthly is a very very good cadence to do this because if you do it every single week you’re gonna see a bit of fluctuations because sometimes you get paid a certain time of the month a lot of things are gonna happen within a month so if you try to do it the same time every single month then you’re gonna get more of
A consistent result so if you do it too many times if you do it every single day then it’s gonna waste extra time so for me it’s manageable to do it every single month it’s manageable to spend 15 20 minutes every single month logging to all my accounts and this is very very much worth it to me rather than having an app that has all my financial information even
If they say they store my login information securely so let me go on with the kinds of investments that you might want to add number one brokerage account that is not a retirement account esp p stored value sometimes if you work somewhere you might have put money in there and you kind of want to calculate that because that comes out of your paycheck it goes into
Some account with your company right but this is your money if you happen to quit right then and there they have to pay you back on this you might also want to argue to put in pto hours i personally have never done this before it’s just a little bit too much to calculate it depends on how much work you want to put into it you also want to include vested rsu that
Is not sold yet into cash so if it’s vested it’s actually yours to keep even if you quit your job even if they fire you or something so this is actual value so then this would be counted if it’s unvested rsu or stock options that you have that’s not vested if it’s gonna get vested like a year from now i generally don’t count this but i might want to monitor it
I would play it a little bit more carefully while i’m employed just so that i make sure those things are vested and kind of know how much value i’m getting from my work if you have a new ities you want to put the liquidation value in it just you know this is talking about net worth here so everything that you have you’re thinking about liquidating everything and
How much us dollars are you gonna end up if you happen to do that so sometimes if there are significant liquidation value law if you sell it you have to pay like 5% fee 10% fee or something like that you might want to take into account this value loss after all these things it’s gonna be total liquidated assets minus credit card debt i talked about subtracting
These things because these are immediate things that you have to pay off credit card debt property tax and federal state tax these things it just kind of goes in your account and goes out right all the cash equivalents that you have – the credit card debt this is what i call liquidated assets – credit card debt like i said before the stocks that’s in your account
You can easily liquidate them gift card you can pretty easily liquidate them mixed up is retirement account value and you might want to add all these up separately and then add it to your total net worth afterwards so you can kind of see how much retirement balance that you have in total so the retirement accounts that you might want to consider i’m just naming
These off so that you might ring a bell or something that you have something like this 401k ira roth 401k roth ira you might want to add in your hsa savings account or perhaps f as a stored value if it does not expire at the end of the year if you’re self-employed you might have other savings account like myself like an scp account and then one of the last things
Is home equity value there’s a lot of argument if you should actually add this or not like i said you’ll have two numbers in this spreadsheet you can look at your net worth with home equity you can look at it without and some people have asked how do you look at how much her home is worth well for me i just go on zillow some other people like to go on redfin and
Then you just look at your own property and see how much they list that property value for and this is going to be an estimate this is not going to be a perfect number because they’re using some algorithm to calculate it and for me what i do is i just take that number as is whatever number that appears there sometimes it fluctuates up and down but this is okay the
Important thing is to always take whatever value it is and use a consistent number if you want to use the number that appears there fine if you want to use the value that appears on redfin fine if you want to deduct 6% because you think you’re gonna have to pay some taxes on it realtor fees or something that’s also fine just make sure you do the same thing every
Single time that you do this calculation so your net worth calculation will be consistent over time you don’t want it to you know go up and down because you suddenly decide to change the way you calculate your home value and after this this is probably a little bit controversial which is equity in expensive items i personally like to add this and i kind of have
In mind how much all my material things are worth and then i can kind of have this in mind and subtract it from the actual final networks value that i have and go okay if i take off all the things this is what my net worth would be things that you might want to consider to add to your net worth is your car or your motorcycle if you have a boat any kind of motor
Vehicle if you have an expensive tv an expensive fridge a dslr camera expensive cameras if you have paintings that are very expensive that you hang on the wall tools that are expensive if you have gold if you have silver if you have diamonds jewelry watches that are of significant value add all these up there are websites out there where they would actually just
Buy all your gold as fast as you want to sell them so just make sure that whenever you add material items that you check out the current pricing on the market so let’s say you have a car right and it has 50,000 miles whatever year it is just go on craigslist and just look at how much people are selling these for or go on ebay and stuff and just look at the actual
Sold value okay don’t look at how much people are trying to sell it for look for actual sold value of an equivalent car and then you can just go okay my car is worth so on so right now you can do the same thing with any product right with the tv with the fridge with the camera paintings tools i’d say trying to find the value of your things every single month it’s
A little bit too much work so this is something i would do every single year roughly i don’t give myself a consistent time to update sometimes when i look at it i’m like you know what this number it looks a little expensive for you know whatever car i have let me go look up what value is today so every once in a while i look through how much all my things are
Worth some of the more expensive things and then if i feel like it’s out of whack i would just go and look up how much is actually worth what i normally see is that the value of my things they go down and this is very impactful when you’re calculating your net worth and you put some of your things that gets added into your net worth you see this and then you see
The value of your things just kind of trickling down all these electronic items that you have that goes down and down and down this is a huge psychological impact in trying to get yourself to increase your net worth because once you see this next time you buy something you’re gonna go as soon as i buy this it’s gonna depreciate after doing this this does impact me
In the way i spend my money most of time i’m very very careful with the things i buy making sure that the things i buy are the things i’m actually really gonna use versus things that i buy if i don’t use them it makes me realize that if they’re just sitting there they’re actually depreciating in value just sitting in the closet in the back of the closet somewhere
I really should just sell them off because i could very well maybe come back three years later if i really really want it i can just buy that for a much cheaper price therefore i don’t take on the depreciation of those products thanks for watching this video i hope you guys enjoyed it if you guys are interested in supporting this channel check out my weeble referral
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Transcribed from video
How to Calculate Your Net Worth By BeatTheBush