my stuff
I just got a quote for renter’s insurance. I’m so proud of myself for doing such a boring and responsible grown-up thing. This does a few things for me. First, I’m insuring myself for things that might go wrong. I have a flat in a Philly rowhouse - fire is my worst enemy, ‘cause if the flames and smoke don’t get your stuff, the water will. I don’t have a lot of stuff - last year, in an effort to be more conscientious about my consumption, I purged a lot of my "stuff" and moved into a smaller apartment. However, if anything were to happen, I’d need to get a new place, new clothes, and home essentials among other things, and I can’t do that without incurring new debt - not with a mere $1,000 emergency fund. My insurance protects me for liability and provides for replacing my stuff if I need to. I’ve known for years that I’ve needed renter’s insurance, but I’m finally going to get some. This brings me to the other thing it will do for me - I’ll also save money on my monthly car insurance payments, because I’m getting the renter’s through the same company - this savings is what finally prompted me to get a policy.
Something occurred to me while I was getting the quote. I have no idea how much my stuff is worth. If I had to replace all my clothes, books, furniture, electronics, jewelry, etc., I’d need many thousands of dollars! It made me think that my assets are higher than they look on paper. For a split second, I considered adding my stuff - at least the amount I have it insured for - to my net worth. But I’d rather not. I kind of think of net worth this way - if worse came to worst, and I had to liquidate my assets to pay my debts, would I come out negative or positive and by how much? If it came down to it, I wouldn’t sell the stuff in my apartment. I’d keep it - or in the case of a disaster, I’d use the insurance money to start over, not pay debts. Outside of my books and music (and even this is debatable), there’s purposely very little that I own that I don’t need. Either way, it would have no real impact on my liabilities. So there’s no point in factoring my stuff into my net worth, which, by the way, is viewable at NetworthIQ - the words "net worth" over the positive net worth progress bar will take you there.
