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while you can include anything you want in a net worth calculation including your furniture i don't count anything i can't sell or won't sell if i wanted to change assets.
until the day comes i am ready to sell my home and it stops being a liability and costing me money i never counted it. i had no mortgage so i just kept it out of the equation.
i did the same with our collectable art. the fact is it cost us money ,alot of money and since we have no intention of swapping any of it for another asset at any point right now t it stays off the balance sheet too as it is a consumption item..
when the day comes i am ready to stop using it and sell it then it gets added to my balance sheet.
just my personal way of figuring what goes on the sheet and what doesn't.
Just remember that owning something that you figure is worth a certain amount can be deceptive. It's worth what you can get someone to pay you for it. Many people have had a rude awakening when they have gone to sell a piece of property.
Just remember that owning something that you figure is worth a certain amount can be deceptive. It's worth what you can get someone to pay you for it. Many people have had a rude awakening when they have gone to sell a piece of property.
Location: Chapel Hill, NC, formerly NoVA and Phila
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Quote:
Originally Posted by debtmonger
Just remember that owning something that you figure is worth a certain amount can be deceptive. It's worth what you can get someone to pay you for it. Many people have had a rude awakening when they have gone to sell a piece of property.
I agree. I recently sold my house. I had always valued it at 10% below what I thought it would sell for. I actually came out a bit above that price, but if someone is using what they think it will sell for and not factoring in the 5%-6% Realtors' fees plus closing costs, then it's not a realistic value.
As a seller on eBay for over 10 years I have a good grasp of the cut that the various marketplaces take and what will actually sell or not. I do not add in value of small things such as old pots and pans, etc. I just take into consideration our bigger items - jewelry, watches, artwork, some nice pieces of furniture, two collections my husband and I have, our pop-up camper, and our cars. When I value my possessions, I am realistic about what something could sell for on Craigslist, eBay, or another marketplace and I am always conservative with the value. In any case, our possessions including our cars and camper are such a small part of our net worth (less than 5%) that it's not even a big deal whether I include them or not. I just like to get a complete full picture of all of our assets and liabilities. In most cases, at least while we are still young, when we are making financial decisions, our possessions' value would not come into play.
Location: Chapel Hill, NC, formerly NoVA and Phila
9,779 posts, read 15,790,796 times
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Of course, you could always find yourself in this situation when your possessions are all of your worth, and even then, it's not worth much, at least in Philadelphia.
today a millionaire means both husband and wife working with two leased honda's in the driveway.
it depends if you mean the amount or the connotation.
the connotation used to mean not working , an estate , a rolls and driver.
today it would take about 8 million to represent the connotation . i couldn't even think about retiring on only 1 million and no pension here in nyc. 35-40k pretax would never do for our goals.
I don't know what the proper definition actually is but I look at it this way.
If you cashed out of your investments like the stock market, bonds, 401K and bank accounts today an added all your pennies together how much would you have. If there's 7 digits to the left of the decimal then you're a millionaire and that's real accessible, spendable money. To my way of thinking your homes, cars etc should not be part of this number.
I don't consider someone with a 600K house, 100K car with 300K in investments to be a millionaire. There;s really only 300K of real cash there at any one time.
Some say it's the value of everything you own and others say it's available investible assets.
I say it's investable assets only.
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