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Um, they can pay it off in 360 monthly payments with a net worth of $200. Your posts don't make sense.
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Originally Posted by ncole1
And then their net worth would not be $200. Whose posts don't make sense?
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Originally Posted by honobob
Oh! Oh! I know! Yours. Are you really in an Economics thread trying to school someone when you don't have a clue about net worth? Really?
Honobob it seems as though you are the one that struggles with the net worth theory. Its assets minus liabilities and of you are paying off your house your net worth should increase well above 200.00 unless you are drawing down credit lines in equal amounts to the princ payments on your mortgage.
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Originally Posted by honobob
Think about it. Ask your mon or dad for help. It is a pretty easy answer.
Additionally when you are completly wrong and out of line being a jerk doesn't improve your point or position
does it matter if homes can last 120 years? few people keep family homes for generations. Even in my family, there is talk about selling them once grandparents are gone. We don't want to manage them and all have our own homes now. Even keeping them as vacation homes seems more bothersome for how much we use them when we can just rent one/hotel when we want.
What does someone do with 100 acres of woodland that grandparents got back when they were young? we have no interest in living in a secluded mountain and we don't hunt anymore so it doesn't serve as a hunting cabin now. The other ones are abroad (when they were in service and living there but didn't sell them before coming back) and we won't become expats so no reason to keep them either outside of childhood memories for parents.
does it matter if homes can last 120 years? few people keep family homes for generations. Even in my family, there is talk about selling them once grandparents are gone. We don't want to manage them and all have our own homes now. Even keeping them as vacation homes seems more bothersome for how much we use them when we can just rent one/hotel when we want.
What does someone do with 100 acres of woodland that grandparents got back when they were young? we have no interest in living in a secluded mountain and we don't hunt anymore so it doesn't serve as a hunting cabin now. The other ones are abroad (when they were in service and living there but didn't sell them before coming back) and we won't become expats so no reason to keep them either outside of childhood memories for parents.
Would the proceeds of the sale be enough to pay off your current house? just curious...
Actually what you said isn't true, which has been pointed out in very clear detail
You aren't paying off your mortgage with a nw of 200.00
Not what I said. I said honobob seems to think that you can have a net worth of $200 with a paid off mortgage, thus, I concluded he must think net worth is something other than assets - liabilities...
Once a house is "paid for" by the original owners, it doesn't stop being an asset. It continues to have value, and sometimes the value appreciates over time. If the original owners move or die, they or their heirs will sell the asset to a new buyer at a price commensurate with the market at the time, and the process starts over again when the asset changes hands.
If a typical house can last so much longer than a typical generation time (~30 years), and the typical mortgage term of 30 years, then why isn't it more common for the average Joe to own a home outright? If most Americans actually have to pay rent/mortgage, then it would seem that, for whatever reason, in a sense the average housing unit is actually paid for 2-3 times over in its lifetime. What gives?
Population growth? If this is the answer to the riddle, then more and more people should be owning outright as population growth slows, right?
Not everyone wants to rent for the rest of their lives. If Bay Area houses weren't stupid expensive I'd have my own 1200 square foot tract home.
One issue is past generations were happy in more modest homes. I am in my early 50s, when I was growing up their was an area just north of the then country club that was were the rich lived. There were two distinct portions to it, the mansion district where the manufacturing plant owners lived and then the other good area where the doctors, lawyers and CEO types lived. This latter area was mostly very well made brick ranches (built in the 50s and 60s) and Cape Codes. Most were two bedroom 1 bath homes and a few three bedroom 1 bath, very little in the way of 2 bath homes back then. This was the place my parents drove us through on Sundays to see how the rich lived. It was a place to aspire to.
So, a few decades later I bought a one of the ranches in the area, my mother was more than a little impressed (you use to say: you're rich). By then the doctors and lawyers were gone and most of the houses were owned by teachers, policemen, and firemen. Now they are gone and ethnic minorities are moving in. The area is still very nice, but what has happened is people simply moved a bit west to newer constructions, 4 bedroom 3 bath homes with 2-3 car garages. Along with that increase in home size came an increase in expenditures. But that is where you now find the policemen, firemen and teachers. The Doctors and Lawyers, they moved out to a new community with much higher average incomes and housing prices. As I know the finances of many of these folks, I'll just say they may have a large house but not a lot else in terms of assets or equity in their home.
The point is you can pretty much chalk it up to conspicuous consumption. What was good enough for a doctor or lawyer 40 years ago is not even good enough for teacher or police officer today. The standard has changed.
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