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Unless you are willing to sell you house or your car in a heartbeat (doubtful), you shouldn't count the equity for those items in your net worth.
Yeah I wouldn't count a car unless it hits rock bottom at 2k and won't go lower as networth. People don't buy cars to increase their networth. A house should count though. Your putting 100k (random example) into it and you hope to get that much at least out of it when you sell. We all know that the new 2013 30k car won't be worth 30k when paid off.
Yeah I wouldn't count a car unless it hits rock bottom at 2k and won't go lower as networth. People don't buy cars to increase their networth. A house should count though. Your putting 100k (random example) into it and you hope to get that much at least out of it when you sell. We all know that the new 2013 30k car won't be worth 30k when paid off.
Your 401k or your house can go down. Networth changes daily as all of your assets can go up and down unless it is under your be or in a CD,etc.
Including your home equity in your net worth is your choice.
There is no right or wrong answer and both can be debated for days.
People who say it shouldn't be included often say a house brings a lot of liabilities and if you were to sell your house, you'll still have to live somewhere, which will cost money.
People who say it should be included often say I have equity in my house that I could sell for $xxxxxxx in this market plus I count my mortgage as a liability, so why shouldn't I count my home equity as an asset.
ditto....your "oh how much money do you have" mentality is stomach turning!guess what I could go kiss my five year old if I wanted to!! And know what? I do so..
Have fun saving.
Why be poor?
If you have a few bucks, nice house you can still kiss your kid! I would work harder to provide for my kids, nice home/neighborhood/education, etc.
30. That was after years of financial mismanagement (where I bought a place WAY too early, didn't save nearly as much for retirement as I should have, etc). The good news was that my job allowed me to save well once I got my head out of my butt.
+1 to living below your means, having few indulgences, and making smart financial decisions.
By 31 I had enough to pay 20% down on my house. At 32 I'm now maxing out the Roth for my wife and I, I'm investing the maximum allowed by the IRS into the 401k and am keeping a healthy 3 months of emergency funds in the bank (which is probably longer than 3 months given my expenses would change if I were to, heaven forbid, lose my job or be unable to work).
And say what you will about my 9-5. But I find the work fascinating (I'm in a highly technical position in a cutting edge field). I also have time to pursue my other interests in life through hobbies.
Your 401k or your house can go down. Networth changes daily as all of your assets can go up and down unless it is under your be or in a CD,etc.
True, but the main difference vis-a-vis a car is that cars are inherently depreciating assets.* 401ks and houses may go down, but the average graph of value over time for those looks completely different than that of a car or other depreciating asset. Or, to put another way, 'potential for loss' vs. 'guarantee of loss', with the former also having a 'potential for gain' that the latter doesn't possess.
* of course there are exceptions for collector's items and high-end stuff, but that's not what we're talking about here
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