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net worth / What am I worth ? - MoneySavingExpert.com Forums
Morning all,
I think i might be a little confused so can someoen please explain to me how you work out your net worth,
Eg I have a morgage of 15 852 , Isa of 13500, other savings of 3000, A pension with a value of 192 000 in 2045, property value is a conservative 80 000.
I dont hold a life insurance policy but as part of the pension there is life cover 4 X salary.
so the question id like to ask is what am i really worth ??
Thanks
If this is the wrong board please point me to the correct one.
Thanks
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Sorry forgot to mention I have no other debts eg CC or loans.
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Leave out the pension (and life insurance if you had it).
Take mortgage & debts off the value of your house.
Add your savings & investments.
Of course, in practice, your pension fund makes you worth a lot more than if you didn't have it .
Even though you won't see most of the capital, I imagine that you are going to take 25% of it as a tax free lump sum on retirement.
So it is confusing, and not a perfect measure.
E.g.
If you were saving for retirement via a buy-to-let rather than a pension, then the property value of the b-t-l minus any b-t-l mortgage would be included as part of your net worth.
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Thanks, Thats what i needed I should be ok to work it out now, i didnt think pension would be included but i can dream cant I, I plan to take the 25% at retirement age (it would be a shame not to ).
Now i just have to start getting into some investments.
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I think one needs to include pensions.
How to value them?
The basic state pension income p.a.
Of 4,420 would cost you about 120k to buy (because it's index-linked).
As a rule of thumb, you can get 5% return on invested capital,whether it's in a pension of just a pot of money -so for a 20k pa pension you would need to accumulate a 400k pot of capital.
Quote: : A pension with a value of 192 000 in 2045 How much is it worth now?
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I wouldn't disagree that a pension is worth a lot.
It's just that you won't find it valued by IFAs when they come to tot up your "net worth".
It's a distinction that has cost many divorced women dear, underestimating the potential value of their husband's pension - especially the final salary ones.
And a pension fund is also a valuable asset when it comes to attracting a future partner.
Which may possibly apply to roswell given that (s)he doesn't currently have life assurance.
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I will have to dig some paper work out tonight to give more details sorry.
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One question that i would need to clarify is will i need life assurance ?
At present iv worked out although im not worth a substantial amount i am worth more than my debts, I wouldnt hit the inheritance tax threshold by a mile (i hope to change this by the time I exit the world)
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Net worth is essentially how much money you would have if you sold everything you own and paid off all your debts.
So as you can't access your pension, it doesn't add to your net worth, until you can access it.
Just as you don't include your future earnings in your net worth, you don't include your pension.
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Ok well I know my present net worth then but I think i should investigate life assurance and dig into my pension info a bit more, also consider what im doign with my isa, presently its off set against my morgage but i have a feeling that my be the wrong home for it now.
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Do you need life cover?
Would your family need more than 4x your salary if you were to die?
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