Assets Value?

IGetMoney

After watching 'How Rich Are You?' on 4OD last week, it made me refresh my summary of assets, think they included House Equity, Cash, Stocks and Shares, Private Pension.

I'm currently 28y/o.

My split is as follows:

House : £48K
Cash : £27K
S+S : £15.8K
Pension : £24.8K

Giving a total of around £115K

I've gone back in time to allow calculation of a rolling growth per day number, this comes out currently at £57.70/day across all assets. (This is over a four year period).

Then to work out this in relation to how much I earn, I take my net take home, add back on personal pension contributions and share purchase cost from my payroll since they go into the above assets. This for me is £1750/month.

£1750/ month works out across the year as £57.53/day as an average net income that can go into the assets listed.

A quick percentage calculation shows (57.70/57.53)*100 = 100.3%, so effectively I'm growing my assets at the same rate as my income.

The above seems a fairly fair way of comparing how well people are growing their assets in relation to their income.

What % do others that can be bothered to do the above come to?

"EDIT: I do understand clearly as you get older with more assets that the growth will improve if you keep earning the same. There are also many other factors which can skew this figure, like not working and having income of yours assets."

racing_blue

Have you seen the Office for National Statistics most recent report on household wealth? http://www.ons.gov.uk/ons/dcp171776_362809.pdf

Uses a similar definition, however groups all financial assets (cash and shares, in your example) and also includes physical assets (valuables, cars, stuff with resale value)

Across the UK as a whole, 38% of household wealth is in pensions, 37% in property, 14% in financial assets and 12% in physical assets. The distribution is extremely inequal, especially financial wealth.

I started taking note of this several years ago & wish I had paid attention sooner, like you are doing. Was that programme on 4OD worth a watch?

planteria

i think those categories are odd... Pensions are Financial Assets. so are properties, at their core... but they could split 'Equities/Bonds' and 'Property' apart if they wanted to clarify.

ChesterDog

I record mine under categories of Fixed Assets (house + contents, cars, etc) and Liquid Assets. Inside the latter I subdivide into Savings (cash + current and savings accounts), Investments (equities, bonds, OEICS, unit trusts, investment trusts, ETFs, property, loans (a handful, to friends/family), peer-to-peer loans, premuim bonds, etc), Pensions (extetnally-managed as a hedge against me not being as good and/or on the ball as I like to think!).

At your age, I think I was about where you are in terms of net assets. Twenty-five years later, I am just shy of 1.3m, so keep at it. :-)

Edit: 'Property' is crowd-funded BTL/sell (HouseCrowd) in this case.

IGetMoney

I've been keeping my records in terms of cash in and out every penny for the last five years and as other assets have come into play they've been included.

Time with growth is the biggest force involved, so I hope to keep my growth rate increasing with time.

SailorSam

Including what i've just found down the back of the couch, i'm worth Tuppence Ha'penny.

TheTracker

House Equity in your prime residence is always going to be the odd one out. Forever and a day people have and will argued as to whether your house belongs in Net Worth computations. If you're never going to downsize or rent out the house for more than you will rent elsewhere, many would argue that it forms no part of your net worth calculations. You own "one house" and it doesn't matter if it is worth £100k or £1m, though it may when you pass away. On the flip side, we hear about otherwise poor pensioners who live in £2m homes but can't afford £3k/year increase in taxes. When I calculate net worth, I do it by subtracting mortgage balance. Then I have 1 house + x. Even then, its difficult to calculate as the pension is pre-tax. And if you spend your pension in the same manner as the state pension, then why wouldn't you include the state pension in the worth?

I'm not sure of the usefulness of asset growth versus income.

[Deleted User]

racing_blue wrote: »

I started taking note of this several years ago & wish I had paid attention sooner, like you are doing. Was that programme on 4OD worth a watch?

No, an embarrassing pile of rubbish. If you have even a basic understanding of wealth you'll come away dissatisfied and perhaps angry.

This review accurately summarises how bad it was: http://www.theguardian.com/tv-and-radio/2014/nov/11/how-rich-are-you-review

ChesterDog

Yes, it was well... drivel.

As I recall, much of it seemed to equate income to wealth.

An opportunity missed. Interesting, but in a wincingly-infantile manner.

ColdIron

ChesterDog wrote: »

As I recall, much of it seemed to equate income to wealth.

Was it produced by Owen Jones? Well, it is Sunday

http://www.youtube.com/watch?v=tSC3RMstJl8