How Are Celebrities' Net Worth Calculated?

 

Net worth is a figure provides an insight into an individual's economic status and general financial progress on an annual basis. Simply put, it is the difference between the person's assets and liabilities. That's also exactly what it means when we say this celebrity's net worth is this much.

There are many websites and business magazines, both online and offline, that public the rich and famous' estimated net worth. Again, these figures represent how much they have left when all of their liabilities are deducted from all of their assets. These can include real estate properties, vehicles, credit card debts, and so on and so forth.

In theory, your net worth is how much you have in cash if you were to sell all that you own and settled all of your debts. Sometimes, this number is a negative, meaning the person has more liabilities than assets. Of course, this rarely happens to celebrities who are more often money machines than not. But when it does happen - to celebrities or not - it is never a good situation. In most cases, a negative net worth is something a young person or someone fresh out of college or just beginning a career would have.

While it may seem like you need tons of data or information from this source to compute for someone's net worth, it really boils down to what he owns and his debts. So how are celebrities' net worth computed as we see them published in various media?

Of course, the first step is listing the celebrity's biggest assets, which again can be anything from a house to a vehicle to a yacht and everyone a person owns. If he also owns a business, this list will include how much that business is worth (there's a more unique formula used for this). The use of accurate estimated market values is very important here. Next step is gathering the most recent statements for the person's more liquid assets, such as cash, bank accounts, brokerage accounts and so on. Finally, any personal items own by the individual that could be of value, such as musical instruments, jewelry, etc. should be listed. It is not important to itemize everything, but usually, items which have a market value of over $500 should be included. By adding up the above, the celebrity's total assets' worth is determined. 

What follows is listing all liabilities, like credit card balances, any balances from any purchases, and the like. We again start from the biggest liabilities down to the smallest. By adding these up, the derived number will represent the celebrity's total liabilities.  You should also visit an article from http://money.cnn.com/2013/08/13/news/companies/paula-deen-wealth/ if you want to learn more ideas.

 As we mentioned earlier, to calculate the individual's net worth, total liabilities will have to be deducted from total assets. It doesn't really matter if the value obtained is negative. Net worth is simply a starting point that can be used for comparisons in the future.