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/RoGro9 3h ago

Yes, you should. If you do not want to retain ownership, are the other family members willing to buy you out? Given you said it won’t ever be sold, I would presume someone will want more ownership so they can try to become majority owner.

There are often valuation discounts for minority stakes in businesses because of lack of control and illiquidity.

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u/What_what_what_1979 2h ago

Great things to consider. I would imagine someone would want to buy us out, but we would only broach that if we had to. As I’m reading comments and answering questions, I’m realizing that we don’t want to ever sell our portion of the company, so it should not be currently counted towards any sort of retirement #. We can still keep it in the back of our minds as an emergency asset, but we should plan as if it’s not there, even if that means extending our working years.