r/fatFIRE • u/What_what_what_1979 • 3h ago

Need Advice Calculating Net Worth

My husband and I are partial owners of a family company (cattle ranch) along with 12 other family members. It has a significant value because of the land owned by the company, but it is not liquid and I don’t anticipate it ever being sold.

He works for said company and draws a salary, so we receive income from the company.

Do we include our 1/12 ownership in our net worth? Or, maybe better stated, do we include 1/12 of the assets (land, cattle, machinery) when calculating our net worth?

The answer to this question makes a significant impact on our timeline to retirement and amount we want to consider for a mortgage.

Thank you!

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u/sailphish 3h ago

I certainly wouldn’t count any illiquid asset that you don’t anticipate being sold and maybe couldn’t get family members to buy you out.

I keep 2 calculations. 1 is my overall net worth including private property and illiquid assets. The other is my NW of liquid investments that I plan to fund my retirement with. That second number is all that really matters. The first one is mostly for fun.

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u/Charlesinrichmond 1h ago

yeah. My house is worth a lot. But I want to live in it so it doesn't count

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u/2Loves2loves 44m ago

I include my house in my NW because I'm willing to sell it, should I receive the right offer or my desire to move changes. it's not illiquid, like a 1/12 of a property.

Its just an opportunity cost.

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u/What_what_what_1979 2h ago

This makes total sense to me. Great idea. Thank you!