Net worth?

obieone · September 2013

I'm researching getting a professional license for my trade(HVAC), and the license requirements state a "net worth of $x,****"
I have about 12K in cash, BUT, I owe that much on my car, plus my mortgage.
So what's my net worth?

txcoastal1 · September 2013

Do you have equity in your car and house

You would need to subtract the the resale value of your home and car

I personally would claim your net worth as $12k...would be an honest opinion and I don't like giving TMI

cnh · September 2013

The boys have you covered above. The best thing to do is pay down your debt as much and as soon as you can and keep it in check. The only "debt" my wife and I carry are basic monthly expenses. We own everything else outright. So there is no debt to subtract, it's all assets all the time. lol

That does not mean we're wealthy. Far from it!

Good luck!

cnh

rpf65 · September 2013

I don't think you need to worry about "net worth" to get the mechanical license. You would need it for the business license, for insurance purposes. If you are planning on starting that mom and pop thing, get advice from a lawyer.

maximillian · September 2013

Do speakers count as assets? :-)

tonyb · September 2013

obieone wrote: »

I'm researching getting a professional license for my trade(HVAC), and the license requirements state a "net worth of $x,****"
I have about 12K in cash, BUT, I owe that much on my car, plus my mortgage.
So what's my net worth?

A license as in a business license ? If so, then you definitely want to set up a corporation and become one of the evil ones. Aside from the benefits associated with that, it can also offer you protection from your personal assets such as your house, personal bank accounts, etc. Talk to a CPA or lawyer and they can better direct you as to the type of corporation best suited for your needs.

It doesn't cost a lot either, and coupled with insurance that you would need the goal is protecting your personal assets from lawsuits and garnishments, the IRS, while also granting yourself some tax benefits too. This can be a double edged sword for some who have no idea what going into business for yourself entails. Quarterly tax filings , record keeping, etc. can be time consuming.

If you mean to just get a license to work in the industry, don't know why they need to know your net worth at all. Net worth is all your assets worth and all your debt too, including your mortgage. Subtract the 2 and you get a - or + to either side.

Not enough info to make a determination of your final net worth but don't put that out on the internet anyway. If your car is worth 10k, and you owe 12k, that gives you a negative of 2k. If your house is worth 200k, and you owe 100k, your even on that. See what I mean ? You add up all that you owe, subtract the value of said assets to get your answer. Assets too can be furniture, anything of value like a coin collection, antiques, paintings, etc. Most will find they sit on the negative side due to their mortgages they hold, but when starting a business, a small business, you decide what assets to put into the corporation. You keep business and personal separate.....so you don't lose everything. You can put your 12k in cash into the business, and if no other loans are taken out then your businesses' net worth is 12k....minus any operating expenses of course. Hope that makes some sense, but really you need to talk to a CPA or lawyer. A good CPA is probably your best bet because they know tax laws pretty good.