Financial assets are a tool for keeping score; and in my view, they are not an end in and of themselves; simply put, they are the results of your efforts. The financial assets represent one facet related to the wealth in your family enterprise. The other measures of wealth include the intellectual and human capital which will be discussed further in other blogs.

The relative changes in the financial assets over time are the best way to keep this score. However, some other points related to the financial assets should be considered:

– timeframe for liquidity: are the assets readily liquid such as cash/securities or will take time to sell, such as real estate
– unrealized gains and the related tax: will there be sales costs (commissions) and/or tax resulting from the sale of the assets
– desirability of other family members (eg. summer cottage, heirlooms): some assets have a value to certain family members over and above its market value – emotional value, which should be considered, particularly when assets are being divided amongst faily members
– legal structures – when selling an asset, is there a legal impediment in the structure to selling the asset or a tax effective way to sell the asset within the legal structure.

So when valuing your net worth, sometimes the dollars and cents are not the only measures for these assets.

I hope that these will provide some points for consideration related to your financial assets.

Learn, consider, apply!!