I don’t include their networth. My daughter is 16 mths old, so her net-worth financially is small but her worth to me is infinite

I also exclude my wife’s own personal net worth.

It’s due to personal choice.

Thanks for reading my blog, appreciate your visits!

Be well and prosper.

BTW, do you include your wife/child’s net worth or just yr personal net worth in the computation. I mean financial planning is for the whole family and so all should contribute to it, shouldn’t it ?

I wish you all the best in achieving your goal.

Thank you,

It’s commendable to set challenging goals. Some people believe in “baby steps” type of goals, whiles others go for the BHAG (big hairy audacious goals). So long as you are motivated to pursue them and keep a balanced life, it’s all good.

I know of a cousin and spouse who bought Citylights HDB DBSS at $670k. Thought it was a bit over-priced given that it is HDB and doesn’t come with facilities. They are in their early 30s and would really be a challenge to pay if off over 30 years IMHO. But then, they have friends who bought into the project so it’s not just a dollars and sense decision but also based on relationships etc.

There is merit in burning up cash and living life up if their lives and short but exciting. But if some of the younger people outlive their savings, life insurance and CPF, then the folly of their youths would catch up with them. Sometimes I realise that one needs to balance between today’s wants and tomorrow needs. But if there is no tomorrow, then party like it’s 1999!

Yes, I deliberately excluded my home and car from computation of net assets. The reason is that I need to stay somewhere, so I excluded the value of my home in my net-worth computation to be very conservative. Same for my car which is a mode of transport. I don’t see it as something I will sell to get cash.

The paradox of including your home as an asset is you can’t sell it for cash unless you’re prepared to squeeze with parents. It is possible for singles but those of us with families will find it tough to stay back with parents.

I also do have a figure in my own worksheet to show my total assets and liabilities (including my home at valuation) but it is just for info because only my liquid assets are investible to generate passive income for me. My home can be rented out only if I downgrade and stay in a small rental apartment to earn the difference between rental income and rental expenses.

But that would be too troublesome.

Be well and prosper.

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Thanks for sharing.
From your total net worth formula, you do not consider the present value of your house/car as assets. Why ? It seems to me that you only consider something liquid as assets. To me, it is not the total net worth from financial accounting point of view. Do you purposely leave those assets out to be conservative ? Please share your reason with me.

Thank you,

My net worth is computed 2 ways:

Liquid Net worth = sum of cash, fixed deposits, stocks and shares listed on SGX minus car loan and housing loan (if any)

Total net worth = sum of liquid net worth + CPF (ordinary, medisave, special) accounts + cash portion of insurance policies minus car loan and housing loan (if any)

You can compute by listing your assets less liabilities.

Be well and prosper.

I must say it’s impressive that you’ve managed to build up your wealth to this extent, and to have a fully paid-up house and an almost fully-paid up car loan is also very impressive by today’s standards; where I see young couples borrowing heavily to fund the purchase of their “dream condo” and more and more youths in their 20’s buying continental cars like VW and Peugeot. With your slow and steady determination and discipline, it’s admirable that you’ve built up a nest egg which can only grow larger with time.

For myself, my milestone is to have total assets worth S$500,000 by 2012, which is a very lofty target. Currently, in 2009, my total assets only stand at roughly S$160,000 (plus or minus $10,000 as the stock market moves up and down). I am using total assets and not net worth as I still have a 7-year housing loan remaining which will be paid off over time. I am also a little curious that you included CPF balances into your net worth, as I do not consider them in as they are not “ready cash” and can only be withdrawn (albeit partially) when one turns 55.

Thus, my total assets comprise cash, FD (I do not have any), equity investments (my whole portfolio) as well as insurance policies.

The reason I picked a lofty target is so that I will work hard to ahieve it. If I set a goal of S$250,000 by 2012, it may be a little too easy and may not make me strive hard. By setting a target which is achievable yet difficult, it would make me work harder. Of course, I will only use my CPF (not cash) to pay down more of my HDB loan if I get the chance to. Currently, the amount of assets I have already exceeds my HDB loan, but I choose to slowly pay it down using CPF OA and instead to invest the cash I have to get returns higher than 2.6% (HDB concessionary rate).

Regards,
Musicwhiz