Nett Worth

[culture_counter]

Does Nett Worth include CPF Life as well as Medisave ??

 

[reddevil0728]

Does Nett Worth include CPF Life as well as Medisave ??

Depends on your definition

 

[narutos]

Want to include or exclude actually.... doesn't matter. It is just for ownself see see and feel song only.

Personally I include everything in cpf. Not sure about cpf Life, haven't reach that stage yet.

 

[Prof. Utonium]

I included OA and SA under assets while MA under insurances tab which indicate all the plans and benefits in my worksheet.

Ultimately, it is up to you how you want to calculate it. Some may not include CPF or primary residence. The purpose of me tracking and categorizing it is in case I die the next day, my family members would know where, what, how.

 

[wutawa]

Yes, try dbs nav planner. Liquid net worth then u exclude those.

 

[highsulphur]

I include CPF for my own calculation

 

[undiscern]

include money that you can liquidate and use it yourself. count cpf if you can give up your citizenship, acquire residency elsewhere and encashed the cpf fully.

 

[twinklingstars]

I include SA and OA, but exclude housing.

 

[homer123]

I divide my networth into liquid and illiquid.. If I can't cash out immediately, I consider that as illiquid..for example the house I stay in , cpf or surrender insurance value.

 

[WindBoi]

Net worth by itself is meaningless.

It just says your total assets minus total liabilities. What can be useful is for you to calculate net worth on a different layers.

1. Total networth like above
2. Income networth/investable networth - Networth taking out the residential property and mortgage - allows you to know what are the equity that you can redeploy and optimize to meet your financial goals.
3. Liquid net worth - your net worth that is liquid enough net of your debt. this is to assess in a contingency event, how long you can last. This is usually measured against your monthly expenses, or how many months you could last.

 

[culture_counter]

Cpf SA, OA, are liquid after a certain age. So are insurance policies which has pro-rated surrender cash value. Shouldn't these be categorized as liquid Nett Worth? Housing is illiquid and cannot be factored in. Cpf life annuity and Medisave have limited liquidity as well.

 

[Okenba]

Everything depends on your intention. What are you calculating net worth for?
If it's to compare then you just need to make sure everyone uses the same measure.
If its to plan for retirement then you want to think about liquidity when you are about to retire. (So if post 55, part of CPF can be considered liquid.)

If you bought an insurance policy that you intend to keep until death, then it is illiquid.
If you bought one and have now decided that you don't need it and can surrender it, it is liquid.

 

[BBCWatcher]

If you bought an insurance policy that you intend to keep until death, then it is illiquid.
If you bought one and have now decided that you don't need it and can surrender it, it is liquid.

I disagree with that. Either the policy is liquid (has a surrender value) or it isn't. Whether you intend to exercise the liquidity you have, and in what order, are separate questions.

 

[Okenba]

I disagree with that. Either the policy is liquid (has a surrender value) or it isn't. Whether you intend to exercise the liquidity you have, and in what order, are separate questions.

To me, if it has a surrender value but you don't intend to surrender it, its as good as illiquid.
It depends what you're calculating net worth for right?
If you're calculating for emergency fund, sure, you can consider it liquid in an emergency.

If you're calculating for retirement, and you don't intend to surrender, then why consider it liquid?
The calculation should fit the purpose.

 

[hwmook]

I divide my networth into liquid and illiquid.. If I can't cash out immediately, I consider that as illiquid..for example the house I stay in , cpf or surrender insurance value.

Same, I got total networth which include CPF, housing etc. Then I got a liquid networth which can be encash if need to.

Total networth is for me to see how much my wife can get when I pass away. Liquid networth is for me to see how much money I can really spend.

 

[WindBoi]

I think end of the day there is a discussion on to whether things like CPF and insurance policy is liquid or not.

The debate is whether should we consider the purpose (insurance) and time period (CPF)

I think eventually, net worth has meaning only if each of us define it well.

 

[BBCWatcher]

To me, if it has a surrender value but you don't intend to surrender it, its as good as illiquid.
It depends what you're calculating net worth for right?

Not really. If it's liquid it's liquid. Use another term if it's a liquid asset you don't want to liquidate.

What I'm referring to is what the term liquid(ity) means when you're communicating with others, such as in this forum. It doesn't mean liquid-except-for-assets-I-could-cash-out-quickly-but-prefer-not-to.

If you're calculating for emergency fund, sure, you can consider it liquid in an emergency.
If you're calculating for retirement, and you don't intend to surrender, then why consider it liquid?
The calculation should fit the purpose.

I don't know why you're conflating liquidity and retirement savings here. For example CPF Special Account funds at least above the Full Retirement Sum are illiquid before age 55 and entirely liquid thereafter. You would certainly count them both before and after 55 as retirement savings/assets, and it doesn't matter for these purposes that they're illiquid before 55.

These various terms have financial dictionary meanings that are well agreed. Stick to those meanings when you're communicating with others insofar as possible. If you mean something different than the dictionary meaning of liquidity (for example) then say so, that's all. In the insurance policy example you could straightforwardly write "liquid assets excluding insurance policies" if that's what you mean.

 

[Okenba]

Okay. I think others know what I mean so not too keen to be arguing about this issue.
You're right. Go pat yourself on the back. shrug.

 

[yuzu28]

Maybe it depends how u set your targets?
For me, I exclude CPF and housing for my net worth. I also try to compute how much I need for retirement based on minimum spend. Cos it will mean I'm pretty covered for retirement, and CPF and housing will give me the bonus when it's time.

 

[BBCWatcher]

Okenba, how are we supposed to be mind readers? Just try to use words like liquidity per their common consensus meanings, that's all. It doesn't mean you or I will always do that perfectly in every instance, but it's going to be really tough to carry on any polite, constructive discussion without trying.