Your cars seem like common sense to add, too. Whatever you realizable amount you could sell them for right now if you needed to is what they’re worth.
I feel like if you’re not keeping track of these kinds of things then you aren’t thinking flexibly about your finances. It’s one thing to say you shouldn’t consider these values when planning for retirement, another to pretend they don’t exist.
If you live on village and have a farm, your spouse and children increase your net wealth as well because of larger human capital in a form of free working force. You may rent 'em, too.
Some of that sounds illegal. But it sounds like you’re now talking about your ability to generate income, not your current net worth.
My current net worth is the result of my past ability to create income. My future net wealth is a function of my current ability to create income by using all of my assets and resources.
lets say you’re worth a cool mil and your expenses are 200k - so 5X wealth multiple.
if your investment return are 5% and inflation on expenses is 4% how long can you live on the mil?
but if GNWM (GreenmanNetWorthMultiple) is at 20X then youre ballin
If I live off of powdered mac and cheese and share a studio apartment with 4 other people I become wealthy as fuck.
As for home equity: why does it matter that the asset is illiquid?
Lots of companies have illiquid assets that are included in their net worth (i.e., equity) all the time.
point taken. I guess I was assuming that your expenses (as a amount) were lower than your investment return (as a amount).
7 pages later 0 data collected on net worth.
just change the topic from “net worth” to “how much cash and equities/bonds do you own?”
Already provided the correct answer in my first post (on the first page).
#EndThread
Probably because it makes the asset (house) extremely hard to value. Your home is worth what someone will pay for it. If you have unlimited time to sell it, you could assign a higher value. If you had to sell it within five business days, it may only be worth half that.
he means people have not thrown down their digits
Plus, if you sell your house, where are you going to live?
People say, “Well, my house is worth a million dollars!!! If I sell my house, I get a million dollars!!! I bought it in 1962 for $28,000, and now it’s worth a million dollars!!! My house has appreciated to a million dollars!!!”
What they fail to realize is that if they sell their house, where are they going to live? All the houses in the neighborhood cost a million dollars. So it’s not like they can sell their house and put a million dollars in their pocket. (Unless they downsize/downgrade, which I’ve never known someone to successfully do voluntarily.)
That is true. However, you can also look at it this way - if they did not have the house, they would have to pay $1 million to live in the place that they do currently.
That is true. However, you can also look at it this way - if they did not have the house, they would have to pay $1 million to live in the place that they do currently.
^And if you want to avoid taxation on the gains don’t you have to buy another house (or real estate) within something like 90 days?
also you don’t get taxed on your realized gains of up to $500k if you’re married
But you don’t have to buy another house for $1m, you can rent a house that would cost $1m. Think of it as a sale/leaseback… you get to pocket a lot of cash up front - I would think this could make a lot of sense for older folks who become cash strapped. On the other hand, you can just use traditional financing measures like HELOCs and mortgages… those would also have better tax characteristics presumably.
^Let me get this straight–you’re suggesting that a retired person sell their house (that is presumably paid for) and turn around and rent the house next door?