Thanks for dropping by Safe Investing South Africa. I am on a journey to build wealth my way. For any questions or comments, feel free to contact me.

8 Dec 2014


Going back to work has not been kind on my monthly personal finance responsibilities. I have not looked at the details of my net worth since exactly 11 months ago. It will never happen ever again unless this net worth is too huge to be calculated by myself. That is actually not a bad thought. We have since done a lot of manipulation in our portfolio. We sold a huge percentage of our stocks to invest in a new property, we got into new mortgage debt three times, we gave away an old car and replaced it with another one, we had a new property vacant for months whilst rezoning it to be a commercial property, and the list goes on. In all that craziness, we managed to grow our net worth by 57%. I am also in a bit of a shock. It feels like I slept and woke up in another world.

A few readers of this blog ask how I calculate my net worth all the time. I thought of dedicating today's blog post to that. A good start would be to define it: Net worth (also referred to as wealth) is an individual's total assets minus total liabilities. After taking out what you owe from all you own you are left with your wealth value. Lets look at how I calculate our wealth:

NET WORTH           
1. Assets           
1.1 Cash

    check and/or savings accounts
    + money market or similar accounts
    + any other cash

1.2 Investments           
    stocks, bonds, exchange traded funds
    + current values of unit trusts
    + other investments like endowments

1.3 Movable and Immovable Property           
    market value of your real estate property
    + current value of your cars
    + value of gold, silver, coins, etc       
    + value of collectibles (I never add this)       
    + Other  
1.4 Retirement           
    retirements accounts and annuities
    + employer pensions current value
    + other retirement investment 
Total Assets = XXXX           
2. Liabilities           
    accounts outstanding amounts       
    + car loans       
    + credit card outstanding debt       
    + personal loans        
    + home-loans
    + student loans       
    + other liabilities
Total Liabilities = XXXX           
Total Assets - Total Liabilities = Net Worth

That is how you calculate your net worth or at least how I do ours. Do not stress yourself if it gives a negative figure. What should be of concern is the direction it takes from there. It should be going up steadily as you pay up your debt, start saving or up your investments. If you are still not clear, feel free to ask me any question.


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