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You may not have thought of your personal belongings as personal assets, but like all assets they have a value and a replacement
cost – and both of these depend on how savvy you are in choosing your personal belongings and how well you maintain
them.
You may have heard the saying “you get what you pay for” and this is definitely the case with
general personal assets. You may pay a little more for good quality furniture and household items, but these will typically
last longer, be easier to maintain and keep a higher resale value if you do decide to sell them.
To understand
the value of your personal belongings – and you should do this exercise as part of obtaining contents insurance - try the following: - Itemize by room, every significant item you own – furniture, art work, electrical items,
jewelry, antiques and so on.
- For each item, estimate a replacement cost (ie what would it cost you to buy another
one if you had to) and the value (ie would could you sell it for if you had to). You might be surprised how much this all
adds up to!
- In your list, also describe the item, it’s age, the condition it’s in and when you think you
are likely to replace it, and take a photo of unique items for your records. This is also useful for making insurance claims
if you ever need to.
- For each item, consider how you should be maintaining it to keep it in top working order or to
maintain it’s value. From this you can develop a maintenance program for your personal belongings.
I know this
seems a lot of effort to go to for your personal belongings, but it is important to realise that they too have a cumulative
value that can be quite significant in terms of your wealth profile and it is important to manage them as such.
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