How to add company ownership into my net worth.

[Yonco]

I have been with a company for 10 years and have plans on eventually owning and running it fully or with a partner. This is a plan by the boss to "phase out his leadership there." This year me and a colleague bought into the company. We each purchased 5% share. The money used was from a very generous end of the year bonus. Serious taxes were paid by both the company and I. The 5% means i will get distributions in proportion to the other shareholders at the end of each year when we dip into the profit. Lots of paperwork and legel went on and i will spare you the nitty gritty unless its needed. The shares purchased were "discounted 50%" on a one time agreement that because they are non voting(only the majority shareholder can decide on end of the year distribution amounts) that they are only worth the initial buy in price if i were to be terminated/quit.  The company is worth $3,000,000 per an agreement with the shareholders, financial advisers and the current owner.

The question then comes when i fill out my net worth spreadsheet. 

1.) If i were to be terminated/quit i will receive the initial buy-in price and no more, do i add $75,000 to my net worth
2.) If i use the full 5% of 3,000,000. I should add the $150,000

The main reason for this purchase was to receive distributions and continue to buy more. I do think this will be my last job and i don't have to be worried about scenario #1 because the circumstances are my own fault from me running the business. Provisions were made for disability, retirement, etc.

Any thoughts? Should i add 75k because its liquid? or the full price because in the books, that is what its worth? I would like to hear your input. -Jon

[affordablehousing]

IMO it only matters based on who wants to know. It could be either amount, or $0. For a lot of lending situations, this would be fully discounted to $0 since it's illiquid and difficult to verify. Only the distributions would count toward your income in repayment calculations. If you are trying to guarantee things with smaller lenders or for oddball business loans, you might as well inflate the number to whatever you want, and see what they cut it down to for how they value collateral, or pay an accountant to write a big letter for you.

If this is just a question of "how big is my....." I would likely take the $75K, since it's what you could actually access. It sounds like the point really is that you get a share of profits, that adds to your income, and the value is just somewhat notional as it's only realized in 40 years when you retire and pass the business to someone else, or when you sell the company, at which point the value would also likely be sales/profit-related.