Balance Sheet Calculation

[Blake Elder]

My wife and I update our balance sheet every month and have different growth goals that we track. It occurred to me today though that we very much use the accounting method for this and take the book value of each of our real estate holdings rather than the current market value. I understand that it would be cumbersome to do a market value on each property each month, but I was curious what others do for this. I know the net worth statement doesn't matter unless you are tracking growth, or wanting to qualify for different things etc. Do you guys update yours with the market value of your real estate each month, quarter, year etc.? It is a big difference over time, but I had never really thought about it before today. What do you guys do?

[Andrew Syrios]

We put together a schedule of real estate owned for our personal financial sheets which compliments our balance sheet. On it, I just give my estimate of fair market values. When we get an appraisal, I update the price (unless I have good reason to think the appraisal was bogus). Then every few months, I go through an adjust the prices on the properties if I think they have changed.

[Wade Sikkink]

Keeping track of your personal balance sheet and net worth is a great idea.  Most people don't do that.  An "objective" source of value for your real estate could be Zillow.  It's not the best info, but if you were ever questioned about the value it is 3rd party data.  Just a thought.