Presidential candidate Donald Trump claims he’s worth more than $10 billion. But is he really worth that much? How does he even come up with that number? Forbes did some investigating and came up with a net worth $4.5 billion.
According to Forbes, Trump has been overestimating the values of his properties and inflating his value because “it was good for financing” – as Trump admits. A story by Fortune revealed that Trump was counting revenues from golf courses, hotel rooms and sundry sources as “income”, but failing to subtract routine costs – salaries, utilities, maintenance, etc. Digging through Trump’s released balance sheet reveals he isn’t including loans on buildings and is ignoring debt in two of his most prestigious properties.
It’s important to distinguish net worth from income. Income is how much you’re earning; while net worth is the value of your assets, minus liabilities.
What Are YOU Worth?
Your best approach to calculating your net worth is to make conservative estimates. Start out by getting organized with all of your financial records. Create a worksheet in a program like Microsoft Excel or Microsoft Word (by creating a table).
What are your assets?
Assets are anything of value that can be converted into cash.
- Cash and cash equivalents (certificates of deposits, checking and savings accounts, money market accounts, physical cash, treasury bills).
- Investments (annuities, bonds, life insurance cash value, mutual funds, pensions, retirement plans – IRA, 401(k), 403(b), etc., stocks, other investments).
- Real and personal property (boats, collectibles – antiques, art, coins, etc., household furnishings, jewelry, primary residence, rental properties, vacation or second home, vehicles).
Add cash and cash equivalents, investments and real and personal property. This number represents your total assets.
What are your liabilities?
Liabilities are what you owe.
- Secured liabilities (automobile loan(s), home equity loan, margin loans, mortgage, rental real estate mortgage, second mortgage, vacation/second home mortgage).
- Unsecured liabilities (credit card debt, medical bills, personal loans, student loans, taxes due, other debt and outstanding bills).
Add secured liabilities and unsecured liabilities. This number represents your total liabilities.
To determine your net worth, simply subtract your total liabilities from your total assets.
Net Worth as Illusion
Surprised by your current net worth? You might also be surprised by these celebrities who only appear to have high net-worths, but actually are closer to broke.
And if you’re interested in how Trump’s net worth competes in regards to the other 2016 presidential candidates, check out this Forbes list.