Your Wealth

Your Wealth

Wealth measures the value of assets owned by a person and is determined by taking the market value of all assets (both physical and intangible) less all debts. You often hear the saying your health is your wealth because without your health you cannot live therefore it is an extremely valuable asset.

Today I am going to focus on monetary wealth broken down into everyday living for a middle-class family of 2 adults and 3 kids. Both parents are working and all kids are in school. Both adults are in their 40’s and have had a mortgage for the past 10 years.

They live in a 3-bed semi worth €250,000 and their mortgage is down to €170,000 with 20 years remaining on it. Combined income is €90,000 per year. They both have cars but only owe money on one …3 years of payments left at €250 a month 7% interest.

They both have credit cards. One is cleared monthly and one has a balance of €2500 on it at 18% per annum. They have a credit union loan of €6,000 from home improvements they made 2 years ago at 6% per annum. They have savings of €3,000 in the bank for emergencies.

Both adults have pensions that have built over the past 15 years of employment. Both are defined contribution pension schemes and are worth €80,000 each at present. They cannot access these until age 60 according to their scheme rules. They go on one 2 week holiday a year and a couple of weekends away and usually go out twice a month.

They both feel like they are broke and are living month to month. That is their perception. If sold today their cars are worth about 20,000.

So let’s look at their assets outside of monthly living income.


House €250,000

Cars €20,000

Pension savings €160,000 (through work schemes)

Emergency Fund €3,000

Total Assets: €433,000

Liabilities (outside of monthly living expenses)

Mortgage €170,000

Credit Union Loan €6,000

Car loan €9,000

Credit Cards €2,500

Total Liabilities: €187,500

Total Net Worth: €245,500

So the couple who feel like they are broke as they never seem to have enough are actually worth €240k plus at this time. That is their monetary wealth at present time.

I know its a basic example and does not look at their monthly income or expenditure outside of the above but I just wanted to demonstrate how you can quantify your own wealth at a very basic level.

As assets build and liabilities come down as you get older your wealth increases. A good financial advisor will go into this in a lot more detail in the fact-finding process. And a good financial advisor will help you grow your wealth through your lifetime whatever stage that may be in.

Get financially fit now. Feel free to PM me with any questions. Thanks for reading.