真の純資産を計算する方法では、純資産の基本とその計算方法について説明しました。しかし、実際には複数の種類の純資産があります。
その記事では、純資産合計として最もよく説明できるものについて説明しました。 これは本当に誇張のようなものです。より正確な定義は、流動純資産です。
これは、総純資産について同じ一般的な計算方法に従いますが、非流動資産を実際の現金に変換する際の取引コストやその他の要因を考慮に入れています。
そのため、流動純資産は総純資産よりも低くなります。
その理由を見てみましょう。
これは実際には最適化された数値であるため、純資産の合計を見積もるのは良いことです。資産の総額を取得してから負債を差し引くと、最大の純資産が得られます。
流動資産は、資産を短期間に清算する必要がある場合に利用できる金額をより適切に反映するため、重要です。
真の純資産を計算する方法で指摘したように 、総純資産は次の計算を使用します：
資産–負債=純資産
しかし、資産が非常に流動的な形で保持されていない限り、流動的な純資産は実際には真の純資産です。それはすべてかかるからです 清算費用を考慮に入れます。
緊急費用を支払うために不動産全体を清算する必要がある場合は、流動資産が本当に重要になります。
流動資産の計算は次のようになります。
（資産–負債）–資産を清算するためのコスト=純資産
資産を清算するためのコストは、総純資産と流動純資産の基本的な違いです。
資産の総額が$ 500,000で、すべてのタイプの負債が$ 300,000である場合、純資産の合計は$ 200,000になります。しかし、あなたの流動資産はそれよりも少なくなります。
たとえば、主要な医療処置の支払い、困っている家族の支援、または新しいビジネスの開始のために、すべての資産を清算する必要があるとします。清算はかなり迅速に行われる必要があるため、清算する資産の完全な市場価値が得られない可能性もあります。
そのような状況では、あなたは迅速な販売を生み出すためにあなたの家を公正な市場価値よりも10％安い価格で売るかもしれません。 2台目の車や別荘の販売でも同じことができるかもしれません。
不動産を売却する場合は、取引費用も差し引く必要があります。株式や債券などの金融資産を販売している場合も同様です。
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If in liquidating your $500,000 in total assets, you have to discount them by $50,000, then incur $30,000 in liquidation costs, your total assets would be reduced to $420,000. After subtracting $300,000 in liabilities, your liquid net worth will be $120,000.
That’s $80,000 less than your total net worth, but it represents your actual net worth.
For what it’s worth, if you’re applying for a loan with a bank, they’ll likely accept your total net worth as the actual number. But in a situation where you actually need to liquidate your assets to raise cash, liquid net worth will be the real number.
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These factors will be different for everyone, based on the composition of their holdings.
For example, if most of your assets are in real estate or retirement savings, your liquid net worth will be a lot lower than someone who has the majority of their assets in cash and cash equivalents.
There are liquidation factors unique to each asset class.
These include cash and cash equivalents. Examples are:
Since there are generally no fees or market value considerations with any of these assets, they won’t be reduced upon liquidation.
Although in the case of CDs, you’ll normally pay a small prepayment penalty if you liquidate the certificate before the stated term is over.
The contribution retirement plans make to liquid net worth might be the most misunderstood of all personal assets.
Most people assume if they have $200,000 in a 401(k) plan, that makes a full $200,000 contribution to their net worth.
That’s never true, at least not in the case of liquid net worth.
The reason is income taxes. Retirement plans are tax-deferred, but not tax-free. If you have to liquidate your 401(k) plan today, you’ll have to pay ordinary income tax on the amount withdrawn. And if you’re under 59 ½, you’ll also have to pay a 10% early withdrawal penalty in most cases.
If your combined state and federal income tax marginal tax rates are 20%, you’ll pay 30% of the amount of the plan upon liquidation (including the 10% penalty). That tax bite will reduce a $200,000 plan down to $140,000.
There may also be liquidation charges, payable to the plan administrator, as well as commissions on the sale of assets held in the plan. That could potentially shave a few thousand dollars more off the value of your plan.
The only limited exception is a Roth IRA, and then only if you are at least 59 ½ and have participated in the plan for at least five years. If you meet those qualifications, and you liquidate the entire plan, no tax or penalty will be required. You would get the full $200,000 in the plan.
Of course, if you’re under 59 ½, you’d have to pay ordinary income tax and the 10% early withdrawal penalty on the investment earnings portion of your Roth IRA.
When it comes to going liquid, real estate is probably the most complicated asset of all. Even in a strong housing market, it can take weeks to sell a house. But in a slow market, it can take months.
Exactly how much it can be sold for will depend upon how quickly you want to sell. If you need to sell right away, you’ll have to cut the price it below the prevailing market value. If the house has a fair market value of $300,000, but you need to sell quickly, you might have to drop the price down to 280,000, or even $270,000.
Of course, if you’re prepared to wait as long as it takes to sell, you’ll likely get the full market value.
But apart from market factors, there are also transaction costs. Those can be steep.
A traditional real estate agent will charge a 6% commission to sell a home. You can easily get a service that will sell it for substantially less, but the services they provide may be greatly reduced. If you need a quick sale, that may not help your cause.
But even apart from a real estate sales commission, there are other costs. You can generally figure you’ll need to pay between 1% and 2% in closing costs. Those may involve an attorney fee, any transaction taxes in your state, or other fees charged to sellers in your market.
Depending on the real estate market in your area, you may also need to pay seller paid closing costs for the buyer. Paying the buyer’s closing costs is a valuable inducement to get prospective buyers to make an offer on your home. That’s the good part.
The downside is that you’ll actually have to pay those closing costs. That could be another 2% or 3% of the sale price of your home.
Altogether, transaction costs to sell your home may approach 10%. If you’re looking to calculate liquid net worth, you should deduct that from the fair market value of your home – even if you don’t plan to sell in the near future.
Including business equity in your net worth is tricky. Under the best of circumstances, valuing a business is an inexact science, and no better than an estimate. Under the worst of circumstances, it may be impossible to come up with a reasonable number.
Apart from the difficulty in valuing a business, you also have to make a reasonable guess on the salability of the business. Simply put, some businesses are easier to sell than others. And if a business is too closely associated with you personally, like if I were trying to sell “Jeff Rose, Inc.”, the business may not have much market value at all. In that case, I am the business so it may not have much value without me.
Most people just guess at the value of their businesses. But if you want a more accurate number, you’ll need to periodically have the business appraised by an industry expert. And even that is likely to produce nothing more than a ballpark.
Converting a business to cash is also problematic. If it’s your primary source of income, selling it may not even be practical. And even if you do sell it, it can be anyone’s guess how long that will take. You’ll also need to subtract any business debts from the value of the business.
For most people who are self-employed, it’s best to completely exclude business equity from liquid net worth.
Most people overvalue their personal possessions, because they assign valuations based on retail cost. But if you had to convert them the cash, the retail value would be completely irrelevant. All that matters is what they could be sold for. That will depend on finding a willing buyer.
As a general rule, your personal possessions are probably not worth more than 10% to 20% of their retail value. Exceptions would be certain jewelry items or artwork, for which there are established markets.
You also have to consider the impact selling personal possessions will have on your lifestyle. It may be that you can’t sell any more than half your personal possessions and only those that are least essential to your daily life.
On balance, $50,000 in furnishings and trinkets may have a cash sale value of no more than $5,000 to $10,000. And that will be even lower since you probably can’t sell them all.
Let’s do a quick example to demonstrate the difference between total net worth and liquid net worth.
The total value of your assets is $600,000, and your liabilities are $300,000. That gives you a total net worth of $300,000.
But to determine liquid net worth, let’s look at each asset individually:
Based on all the factors above, your liquid net worth looks like this:
As you can see from the example above, there’s a big difference between total net worth and liquid net worth.
In the example, we started out with a total net worth of $300,000. But after deducting for marketing factors, taxes and transaction costs, we ended up at $171,000.
That’s a difference of $129,000, which is a long way from pocket change and rounding errors.
Your total net worth isn’t completely irrelevant, it’s just not as accurate as you may want to believe. In either case, it helps to know both your total and liquid net worth.
The moral of the story is that liquid net worth is closer to your true net worth. And that makes a strong case for saving and investing even more money than you think you should. After melting down everything you have, and paying off all liabilities, you’re probably worth less than you think. And a lot less at that.
