We looked at how to calculate your net worth in one of our previous article. The net worth calculation will help you knowing if you are going forward or backward from one year to another. However, when you present your net worth to a banker, there are some item that may not worth too much for them.
Cars
While I suggest including your car value in your balance sheet, it should definitely not represent an important asset while calculating your net worth. I usually set my personal car value according to the loan attached to it. I do not want to penalize my net worth because I have a car loan, but you should surely not increase your net worth with the help of your car! Most banker will give little to no value to cars, so don’t be surprised; it is a depreciating asset!
House
This is probably one of the biggest questions: should we include the main residence in the calculation of your net worth? I personally think you should. You could decide to live in an apartment and invest a part of your money instead of using it as cash down. Therefore, the equity in your property worth something. It can help to consolidate your debts, pay off credit cards, and finance your next car purchase or renovation. It is also important to mention that your banker will calculate your net worth considering your property value.
Pension Plan
Some people calculate their net worth including their pension plan. You can surely do it on a personal basis to know if your net worth is increasing overtime. After all, if your employer is giving an important contribution, this is still money that you will have a right on it at one point. However, since you cannot access this money by any means (you are not allowed to withdraw money from a pension plan unless you meat certain amount of criterions). Therefore, I would not suggest to include the pension plan in your net worth calculation when you are about to ask for a loan. Your banker won’t do it as well.
Other Registered and Non-Registered Investments
Since those are the most liquid of all your assets, they are definitely included in a net worth calculation. The only thing to be careful about is if you have a brokerage account with stocks. Since the value can fluctuate from one month to another (we have a great example with what is going on in the markets lately), your banker may give you less than what your stocks actually worth.
In the end, the key to get a good net worth is to have multiple kinds of assets in our balance sheet. With a property, a pension plan and other investment on the side, you will definitely in a great position to show your net worth to your banker 
If you liked this article, you might want to sign up for my FULL RSS FEED. Then, you would get my daily post in your email and can read it at any time. To subscribe, please click HERE..
