What’s a net worth?

This is like that old gag I used to play on the kids – what’s a henweigh? Remember that one? They’d say they didn’t know what a henweigh was, then you’d say “oh, about 4 or 5 pounds!”

Yes, I’m that old!

This new question, what’s a net worth, is entirely different. The answer has to always be “it depends on who you ask!”

In the past, I took stock of my personal net worth (your assets minus your liabilities = your net worth) on an annual basis.  Lately, I’ve been doing it monthly, with the help of a free website at www.networthiq.com.  It’s a pretty groovy tool, and I like being able to enter in my data monthly, and see it graphed out to show a trajectory. My trajectory is in a pretty stable upward direction.

The folks at networthiq.com even provide a tool where you can put a little graph on your blog that shows your networth. Do you think I can figure out how to do that successfully? Nope. I’ll keep trying though.

As I was entering in my stats for end of September, I realized that my networth picture is not quite accurate, at least, not the way I’m entering it.  The bank account that I refer to as my “fiscal parking lot” is where I put money I collect for my annual personal income tax. Unlike most people, I pay income tax annually, not with each pay. Therefore, I have to be disciplined enough to have a pretty big bundle of cash come April 30th. My fiscal parking lot gets to look pretty sweet around this time, and just gets sweeter as we get closer to tax time.

I’m entering the balance of my fiscal parking lot as an asset, but what I’m not doing is telling the calculator that I have a liability to match – which are unpaid taxes. Let me be very clear about this: it’s not that I have a tax bill owing that I’m failing to pay, the CRA only requires me to pay annually. Trust me, I’ve asked them if they want quarterly installments. They said no.

Even though I considered sending them quarterly installments anyway, I figured why not keep the money myself, and earn a pittance of interest on it? Yes, I pay tax on the interest as earnings, but hey, it still leaves me with a few extra bucks. Why should the CRA have it if they don’t want it? If I didn’t have the discipline to hold onto the cash, then I’d send it in. However, I do have the discipline, so I reap the rewards of that little bit of interest.

So, according to my little entries on this website, in April my networth was $292.6K, and now it’s $328.5K. That’s not entirely accurate, because there’s a chunk of money that I’m holding for the CRA in there. Still, there’s a $35K difference between those two numbers, and it’s not all for the CRA.

I’m not also convinced that my first entires are as accurate as my most recent.

Strangely, I got a comment on my profile from somebody I didn’t know. Could this be a new way to find a date, cruise people’s net worth profiles?  🙂

If you haven’t taken stock of your net worth, it’s a useful exercise.  If you like a funky little tool that’s free, check out www.networthiq.com, it’s kinda cool!

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3 responses to this post.

  1. 1. You can go into networth iq, and copy the HTML code. Look for something called: My Net Worth Badge
    Click Generate and copy the code

    2. Open a widget in your WordPress theme (Widgets, sidebar) open something called Text/HTML
    Copy the code into that widget and arrange it into your sidebar above or below your other ones (Blogroll, Email subscription etc)

    3. Save.

    4. Admire handiwork.

    Now onto your networth question.

    I too, have to pay taxes each year, so I have to save my cash flow, but I set it aside in a business account so I don’t mix my personal money into it.

    I then count the business money in there as my assets (which they are), and then when I have to pay taxes, I simply pay them, and let my net worth drop, and make a note that I paid taxes that month.

    I also pay quarterly installments for GST/HST, which boosts my account for 2 months and then drops when I pay it out…

    I don’t think you have to be so accurate in terms of having your net worth be exactly what YOUR net worth is. People who own stocks in companies aren’t picky about the number, because they know it can be $5 today and $500 the next, then $40 the day after.

    It fluctuates, and it’s more of a snapshot each month.

    Reply

  2. That sounds pretty cool – I am going to check it out – thanks! As for it being a place to “meet people” you could inflate your figures somewhat to be more impressive but then would you really want someone who was only interested in what you’re worth? Could get messy! lol

    Reply

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