The Financial Metric I Refuse to Calculate

I guess I’m going to be hounded out of the forum with pitchforks and flaming torches for confiding this dirty little secret. Apparently, confession is a catalyst for redemption, so here’s the truth: I never have and probably never will produce a statement of net worth.

I really don’t see the point. My two homes and cars aren’t for sale, and their personal contents are just that—personal and not for sale. Since I don’t view any of these possessions as liquid, they hold no practical monetary value for me. I only care about knowing the position and value of my actual liquidity: cash, stocks, and bonds.

My financial foundation is built on zero debt. Given this principle, I can’t chip a brick from my home’s wall or remove a wing mirror from my car to use either as payment at the grocery store. These items are irrelevant to my financial planning, as are the assets they belong to.

To me, the only reason to include illiquid assets in financial calculations is if you plan on leveraging those assets to take on debt—which I don’t. My illiquid assets, along with remaining liquid assets, will simply be passed on to my children and grandchildren to do with as they choose.

It won’t be a difficult task for my heirs to sell any illiquid assets and valuable personal possessions to distribute the money as per the will. They’ll just have to accept any impediment as a fee to access my illiquid assets. However, it won’t be difficult because a detailed account of my liquid assets will be available, and all deeds, titles, and policies will be deposited with the will.

My wife Suzie is fully on board with this philosophy and is fully aware of all our financial positions should I shuffle off this mortal coil first. I think this position is logical within our own narrow frame of reference. That is, zero debt and a strong focus on liquidity for day-to-day living and planning. The net worth of our illiquid assets is “irrelevant” because we have no intention of using it for personal consumption.

There’s also the matter that I can’t be bothered going through all the faffing about to produce the document, but I’m not going to mention that 😉