We won't count what you don't own
If your statement shows a balance, it's an asset: you own that money and could, in principle, take it. A pension that pays a set amount every month for life shows no such balance. Some apps multiply the monthly figure by twenty years and hand you a bigger net worth. The bigger number is the wrong one.
An asset is a balance you own
The clean test for an asset is whether there is a balance with your name on it that you could claim. Your checking account passes. So does a savings account, a brokerage balance, or a retirement account that shows a dollar figure you could roll over or withdraw. Each is money you own, sitting somewhere.
An income stream is a different animal. A pension that promises a set amount every month for life is a promise of future payments, not a pot of money you hold. You can't take it out, you can't roll it over, and there is no balance to point at, because there isn't one.
Why multiplying it out is misleading
It is tempting to turn a monthly promise into a lump sum: take the payment, multiply by the years you expect it, and add the result to your net worth. The number gets bigger, and bigger feels better.
But that figure is a forecast wearing the costume of a fact. It assumes how long the payments last, ignores that a promise is only as good as who's making it, and drops onto your balance sheet next to your actual bank balance as though the two were the same kind of thing. A net worth padded with a number you can't spend or withdraw isn't a truer picture of where you stand. It's a rosier one.
How it's handled properly
The rule is plain: if there's a statement balance, it's an asset and it counts. If there's only a monthly payment, it's income when it arrives, and it doesn't sit on the balance sheet as a made-up lump. When the payment lands each month, it's recorded then, as the income it is.
Marked Money follows the statement. A pension or annuity that discloses a plan value, a real figure you could point to, is recorded at that value, entered by you, because the app never invents what a pension is worth. One that only pays monthly for life is left off the balance sheet and recorded as income as it comes in.
Marked Money splits a loan payment for you and keeps the three parts straight afterwards, so paying down a debt stops looking like spending it.
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