Understanding Your Net Worth - Scott Burns

[dude]

Excellent little summary:

http://assetbuilder.com/scott_burns/understanding_your_net_worth

[RexualChocolate]

Great article, I hadn't thought about it that way.

Since we can now annuitize future cash flows back to today, I declare myself a multi millionaire at 27.

[2Birds1Stone]

Great article, I hadn't thought about it that way.

Since we can now annuitize future cash flows back to today, I declare myself a multi millionaire at 27.

I take this as an invitation to the two coma club myself ;)

[thd7t]

This is a weird article.  It makes things seem a little rosy, which it shouldn't for the person who wrote in for a definition.

[Mississippi Mudstache]

I thought it was pretty much bang-on. It makes sense to evaluate SS or pensions as annuities for your net worth. They are passive income - you have already done the work to earn them, and you won't need to keep working to keep receiving the benefits. It don't make sense to include income that you have to work for in your net worth, because if you stop working, the money stops as well.

[thd7t]

I think it's good to project your net worth and cash flow, but net worth is also potentially active.  I like knowing that I have future benefits, but calculating my net worth can be valuable now.  SS, in particular doesn't play into that.  Similarly, I don't count passive income streams as net worth.

It's important to know all of that and the article is useful, but it's different.