Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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dougger5
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Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by dougger5 » Sun Jul 16, 2017 9:05 pm

DW and I are applying for new term life insurance policies. As part of our respective applications, we're asked to provide our net worth.

Now I know this is a matter of simply subtracting liabilities from assets. My uncertainty concerns how to calculate our individual net worth, taking into account personal versus joint amounts. I'm thinking that my personal net worth would be:

(my personal assets + joint assets) - (my personal liabilities + joint liabilities)

Personal assets are our respective retirement accounts, personal liabilities would be my CC, her student loan, and so on.

Is this correct?
Last edited by dougger5 on Sun Jul 16, 2017 9:29 pm, edited 1 time in total.
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sport
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Re: Net Worth Calculation - Am I Doing It Right?

Post by sport » Sun Jul 16, 2017 9:12 pm

What about her assets and her liabilities?

CyclingDuo
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Re: Net Worth Calculation - Am I Doing It Right?

Post by CyclingDuo » Sun Jul 16, 2017 9:14 pm

dougger5 wrote:DW and I are applying for new term life insurance policies. As part of our respective applications, we're asked to provide our net worth.

Now I know this is a matter of simply subtracting liabilities from assets. My uncertainty concerns how to calculate our individual net worth, taking into account personal versus joint amounts. I'm thinking that my personal net worth would be:

(my personal assets + joint assets) - (my personal liabilities + joint liabilities)

Personal assets are our respective retirement accounts, personal liabilities would be my CC, her student loan, and so on.

Is this correct?
Why not sign up at Personal Capital so it calculates net worth for you - debts, assets, real estate, etc... .

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dougger5
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Re: Net Worth Calculation - Am I Doing It Right?

Post by dougger5 » Sun Jul 16, 2017 9:26 pm

sport wrote:What about her assets and her liabilities?
I just offered the case of my net worth as an example of how I think our respective net worth's would be calculated, if I get the point of your question. So for her personal net worth, just substitute "my" in the above equation with "her."
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dougger5
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Re: Net Worth Calculation - Am I Doing It Right?

Post by dougger5 » Sun Jul 16, 2017 9:27 pm

CyclingDuo wrote:
dougger5 wrote:DW and I are applying for new term life insurance policies. As part of our respective applications, we're asked to provide our net worth.

Now I know this is a matter of simply subtracting liabilities from assets. My uncertainty concerns how to calculate our individual net worth, taking into account personal versus joint amounts. I'm thinking that my personal net worth would be:

(my personal assets + joint assets) - (my personal liabilities + joint liabilities)

Personal assets are our respective retirement accounts, personal liabilities would be my CC, her student loan, and so on.

Is this correct?
Why not sign up at Personal Capital so it calculates net worth for you - debts, assets, real estate, etc... .
I guess I like using spreadsheets. Just want to make sure my assumptions are correct.
"I've been ionized, but I'm okay now." -Buckaroo Banzai

JGoneRiding
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by JGoneRiding » Sun Jul 16, 2017 9:40 pm

But it would only be half of joint assets and half of joint liability if acct for each of you

CyclingDuo
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Re: Net Worth Calculation - Am I Doing It Right?

Post by CyclingDuo » Sun Jul 16, 2017 9:45 pm

dougger5 wrote:
CyclingDuo wrote:
dougger5 wrote:DW and I are applying for new term life insurance policies. As part of our respective applications, we're asked to provide our net worth.

Now I know this is a matter of simply subtracting liabilities from assets. My uncertainty concerns how to calculate our individual net worth, taking into account personal versus joint amounts. I'm thinking that my personal net worth would be:

(my personal assets + joint assets) - (my personal liabilities + joint liabilities)

Personal assets are our respective retirement accounts, personal liabilities would be my CC, her student loan, and so on.

Is this correct?
Why not sign up at Personal Capital so it calculates net worth for you - debts, assets, real estate, etc... .
I guess I like using spreadsheets. Just want to make sure my assumptions are correct.
Spreadsheet is fine. PersonalCapital keeps it up to date as things fluctuate each and every day.

All Cash + Investments + other assets (home, art, cars, boats, real estate, land, livestock, equipment, etc...)

minus

All credit (credit card debt), loans, mortgage

= Net Worth

annielouise
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by annielouise » Mon Jul 17, 2017 8:36 am

JGoneRiding wrote:But it would only be half of joint assets and half of joint liability if acct for each of you
I agree with this. Assuming you don't live in a community property state.

stan1
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by stan1 » Mon Jul 17, 2017 8:41 am

I'd clarify with your insurance broker (or call the insurer's toll free line if you are buying direct). They'll be able to tell you what they consider to be "right".

wangarific
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by wangarific » Mon Jul 17, 2017 10:03 am

stan1 wrote:I'd clarify with your insurance broker (or call the insurer's toll free line if you are buying direct). They'll be able to tell you what they consider to be "right".
And ask how important t is to be accurate. You don't want to go spending hours on a question when they'll spend mere seconds on the answer!

soupcxan
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by soupcxan » Mon Jul 17, 2017 10:27 am

Why is net worth info needed to buy term life insurance? I would not provide that. None of their business.

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BL
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by BL » Mon Jul 17, 2017 10:40 am

soupcxan wrote:Why is net worth info needed to buy term life insurance? I would not provide that. None of their business.
+1
Sounds like one of the individual big companies that have salesmen who want to sell you whole life or annuities either now or later. Are you applying for several million in insurance?

Have you compared prices with immediateAnnuities.com term4sale.com or your local Independent agent who can shop around for you from many companies?
Last edited by BL on Mon Jul 17, 2017 7:12 pm, edited 1 time in total.

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TomatoTomahto
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by TomatoTomahto » Mon Jul 17, 2017 11:38 am

soupcxan wrote:Why is net worth info needed to buy term life insurance? I would not provide that. None of their business.
They are probably looking out for insurable interest and reasonableness. Wouldn't want someone taking out a $10M policy on their penniless neighbor whose stairs are in horrible condition.

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JDCarpenter
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by JDCarpenter » Mon Jul 17, 2017 11:41 am

TomatoTomahto wrote:
soupcxan wrote:Why is net worth info needed to buy term life insurance? I would not provide that. None of their business.
They are probably looking out for insurable interest and reasonableness. Wouldn't want someone taking out a $10M policy on their penniless neighbor whose stairs are [soon going to be] in horrible condition.
Or even worse!
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dougger5
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by dougger5 » Mon Jul 17, 2017 2:56 pm

BL wrote:
soupcxan wrote:Why is net worth info needed to buy term life insurance? I would not provide that. None of their business.
+1
Sounds like one of the individual big companies that have salesmen who want to sell you whole life or annuities either now or later. Are you applying for several million in insurance?

Have you compared prices with immediateAnnuities.com or your local Independent agent who can shop around for you from many companies?
We're at the end of our respective 10yr level term policies, and each getting one more 15yr level term policy. We arrived at the particular companies after employing the very technique I discovered here, namely going to https://www.term4sale.com/ and contacting one of the agents it spit out.

I agree that it's a bit puzzling that they should be concerned with net worth, for a term policy. Might be, as some have suggested, a means of figuring out whom to shot spam/junk mail at for soliciting other products. And I'm not going to lose sleep over precision - it's just something I haven't found a clear answer about.

So getting back to the original issue, I would think that for net worth purposes, either party has equal access to the entire amount of joint assets, and are equally on-the-hook for the joint liabilities, hence why I counted the entire amounts in our individual net worth calcs - but I'm not entirely certain of that, hence why I'm asking.
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The Wizard
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by The Wizard » Mon Jul 17, 2017 5:50 pm

This is a pending Shark Attack, yes.
Understanding it at this point will allow the OP to fend it off easily...
Attempted new signature...

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dougger5
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Re: Net Worth Calculation - Am I Doing It Right? (Individual vs Joint Figures)

Post by dougger5 » Tue Jul 18, 2017 5:18 pm

The Wizard wrote:This is a pending Shark Attack, yes.
Understanding it at this point will allow the OP to fend it off easily...
Ha! Indeed, the sharks with whom I have my current policy have sent me a "Aww, c'mon...give us a call!" letter upon notification of my impending switch to someone else. "Gee, why don't you consider one of our Whole Life or Universal Life products?"

What is it, a poke in the eye followed by a punch in the snout, or the other way around, for a shark attack?

:mrgreen:
"I've been ionized, but I'm okay now." -Buckaroo Banzai

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