Add up your stuff

It’s the end of another beautiful weekend day here on Kauai, and I’m looking for a reason to kick back with a glass of wine and watch the sun go down behind the palm trees. So just for fun, let’s add up our stuff and see what we’ve got. Then we can pop a cork to celebrate, if it looks good, or go drown our sorrows if it looks bad.

(Of course, it is undoubtedly true that “real wealth” and “riches” encompass much more than just physical or financial ‘stuff’, and most of us here in Hawaii have a surfeit of things that many people would consider “true riches” – beautiful surroundings and weather, delicious food, flowers, music and culture, our kupuna and keiki (and all of our ohana), a laid-back lifestyle, and so much more. But this post is about the boring ‘stuff’ we all have: money, property, and debts. We can get back to that other stuff later, particularly if we’re needing something to help us forget the financial realities.)

So add up your stuff.

First, there’s any real property (houses and land) that you own. Your house (if you own it, not if you rent), any ‘vacation’ homes, and any investment property. Timeshares too. For each property, take what you think is the market value (go by the tax assessment if you don’t know; tax assessment data is available here for properties on Kauai, by address or TMK), then if there is a mortgage loan (or more than one), subtract the loan balance(s) still due from the value. (If you have a partial interest in property (say, 50%), take that percentage of the value, and subtract the same percentage of the loans.)

Next are any and all bank accounts. Checking, savings, CDs. Add them all up. Add any investment accounts, mutual funds, stocks, bonds, all that stuff. Don’t forget your retirement accounts that have a balance, like IRAs, 401(k)s, and ‘defined contribution’ pensions (even if you’re years away from retirement). If you have a pension that’s a ‘defined benefit’ plan (those with a payout based on your years of service and average salary, rather than how much you or your employer put in), then if it has a ‘death benefit’, make a note of that (but don’t include it in your tally for now).

If you have an annuity (or more than one), add the values of those.

If you have life insurance, add its cash value. (Make a note of the death benefit, and if it’s term or ‘whole life’, but don’t add the death benefit yet. We’ll come back to that.)

Now cars; guesstimate their blue-book values, or what you think you could get for them right now.

Other vehicles: all that stuff they talk about on the Progressive insurance TV ads. Motorcycles, boats (yes, your canoe or kayak), trucks, RVs (are there any of those on Kauai?), trailers, etc.

Do you have a business? If so, what is its value? For most businesses, several times the annual earnings (maybe 3-5, depends on the business). If the business has lots of inventory, equipment, cash holdings, real estate or other assets, add those in also. There are sites on the internet that you can use to get a ‘quickie’ business valuation.

Any collections? Coins, stamps, Muhammed Ali memorabilia? Old LPs in mint condition? Art? What’s it all worth?

Jewelry and gold – gold is well over $1,000/oz. now, so if you’ve got a few ounces of it lying around, it’s worth counting.

The rest of your stuff. Appliances, furniture, clothing, TVs and entertainment equipment, tools, surfboards, books, phones, kitchen stuff, whatever you’ve got. This stuff is tough to value; most people have somewhere between $5,000 and $100,000 worth of stuff (yeah, I know that’s not very helpful). We’re looking for what you could get for it on eBay, Craig’sList, yard sales – not what it would cost you to replace it all new. Just guesstimate.

Now, do you own any accounts jointly with anyone else? If so, include 1/2 the value of those accounts (if there are two joint holders).

If you can think of anything else of value that you own, add it in.

Now add up your debts – balances owed on car loans, credit cards, personal loans – anything (except mortgage loans, we already included them) you owe anybody. If you owe back taxes, include them. If you’re behind in child support or alimony, add the overdue amount. If you wanted to have a clean slate, and owe nothing to anybody, what would you have to pay off? Add it up.

Subtract your debts from the total of all the stuff you own. That’s your net worth.

Now, subtract the cash value of the life insurance policies, and add in the death benefits from those policies. If you have a life estate in any property (you have the right to live in or use the property for the rest of your life), add in the FULL VALUE of the property (less any mortgage or debt if it is encumbered).

That is a ROUGH approximation of the value of your estate. (Did you realize you were engaged in estate planning? You were. Figuring out what you own and what you owe is one of the first steps in planning.) If it’s more than $1 million, and you’re not planning on dying this year, you might want to start investigating the Federal Estate Tax. If it’s more than $3.5 million, add the Hawaii State Estate Tax to that ‘to investigate’ list.

Published in: on June 20, 2010 at 3:55 am  Leave a Comment  

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