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I clearly stated liabilities of $100,000,200. You did not get the correct answer of -$200. Instead you changed the value of the liability to make it look like you had the correct answer.
The original question was how someone with a paid off house could have a positive net worth of $200; therefore a net worth of negative $200 doesn't really answer the original question.
And the question, like everything else in this thread, is not complex. You can have medical or just plain credit card bills greater than the value of your assets including your house. This stuff is not complicated.
Last edited by TheOverdog; 07-06-2016 at 04:08 PM..
The original question was how someone with a paid off house could have a positive net worth of $200; therefore a net worth of negative $200 doesn't really answer the original question.
And the question, like everything else in this thread, is not complex. You can have medical or just plain credit card bills greater than the value of your assets including your house. This stuff is not complicated.
Overdog, Here was the question Ncole1 was responding to. She even quoted it. Just pointing out that you have to pay attention in math essay questions!
"Ncole What would the math look like if Elison paid off his $200,000,000 house now worth only $100,000,000 but had liabilities of $100,000,200?"
She could not do the math to get the correct answer.
But I agree that the thread is not complex unless you lack basic economic or math knowledge. And yet she and lowerexpectations tried to ridicule and censor me. Geez.
Actually the answer is that because some people choose to pay off mortgages and some choose not to and some cannot pay off their mortgages. The longevity of the asset has little to do with the question.
I'm thinking you only read your posts and begrudgingly skim the factual posts of others.
I clearly stated liabilities of $100,000,200. You did not get the correct answer of -$200. Instead you changed the value of the liability to make it look like you had the correct answer.
???
You can either do moth or not.
A simple "No, what would the net worth be if the liability was $100,000,200?" would have sufficed.
Of course he wants the money back out, this is obvious. However, once he (or she) gets this money, the question is then why he/she doesn't then purchase the next home free and clear. This would need to be explained by, for example, moving to a more expensive house. The buyer might mortgage almost the entire purchase, but the seller would possibly have at least one home free and clear. After another 30 years, they should both (possibly) own outright. They (or their kids) might sell, true. But then we have the same question, did they move up in house? Or is it population growth (splitting among multiple kids is essentially the same explanation)?
Eventually we should have a lot of outright owners, absent something depleting it (population growth, mass abandonment of some cities in favor of others, treating house as ATM, etc.)
The point is that many partial explanations can be offered, but it doesn't seem like any of them can account for why outright ownership is not the dominant form, though to be fair they might do so if combined.
There are a lot of subtleties and to simply point out that (obviously) people sell houses is to ignore why (imo) this topic is so fascinating...
The original question was how someone with a paid off house could have a positive net worth of $200; therefore a net worth of negative $200 doesn't really answer the original question.
And the question, like everything else in this thread, is not complex. You can have medical or just plain credit card bills greater than the value of your assets including your house. This stuff is not complicated.
Just want to say that if you do have credit card bills that large you are a frigging azzhat. All of you are arguing about something I don't think happens very often. Most people that are smart enough to work toward being without a house payment won't then have credit card bills that are six figures. Show me one person like that.
A simple "No, what would the net worth be if the liability was $100,000,200?" would have sufficed.
You couldn't get the equivalent from this "Ncole What would the math look like if Elison paid off his $200,000,000 house now worth only $100,000,000 but had liabilities of $100,000,200?" And then you get all mad when someone suggests you get someone more educated to help you out here?
Just want to say that if you do have credit card bills that large you are a frigging azzhat. All of you are arguing about something I don't think happens very often. Most people that are smart enough to work toward being without a house payment won't then have credit card bills that are six figures. Show me one person like that.
I do not believe anyone gave an example of a person having over $20,000 in credit card balances and that is pretty common. Although Lisa Marie Presley recently filed for divorce when her husband racked up $109,000 in credit card debt. http://www.nydailynews.com/entertain...icle-1.2693989
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?
Our house turned 40 years old in 2015. It is a one owner. Right now we are looking at more repairs but in that 40 years we have had about 3 new roof jobs, one was a tornado repair and the other was a hurricane called Hugo.
Two bathrooms were fully gutted and redone.
Trim around the brick was changed to plastic so hubby doesn't have to paint.
We have added storm windows and totally repainted and added wall paper on one wall in the living/dining/kitchen each. Rest of kitchen has different paper of same color scheme. Kitchen cabinets have been repainted white instead of the yucky brown. Our house is complicated.
We have paneling on three walls in the living room that many people would have replaced but that is the only part that is still original and still in good condition.
We have new carpeting throughout except for one room that is seldom used. We have added new lights with fans in living room and the dining room light really needs replacing.
We added a y to our driveway when we had teens driving and husband had a company car and there were four or five cars playing musical cars. Yes we looked like gasoline ally for a few years.
3/4 acres has a chain link fence to contain our dogs years ago. Now it is a protected area for various animals. Deer jump it, rabbits, squirrels and birds live inside the dog proof protected area. We have Raccoons and possums visiting at night to steal our one cat's food.
We have had several sets of new refrigerators, stoves, dishwashers, microwaves, washers and dryers. I don't know if I could ever figure out how many of those. Typing this I am wondering how we have been able to afford it all.
Oh, I forgot about lawn mowers and yard work tools. I think we are on our third or fourth furnace then heat pump that was both heat and air conditioning. I gave away the two window air conditioners we had before the central air.
We moved in on November 1, 1975 and paid off the mortgage totally in 1994 after my husband's early retirement with the bonus he got to retire. You never fully get a house paid off. Things keep needing help. With taxes and the other repairs, I think we have probably paid for this 40 year old house at least three times. The taxes on it now are approaching what the house payment was when we bought it.
I'm not sure this house is going to last 120 years. We will be happy if it lasts as long as we do.
But you most likely didn't pay $35,000 in cash , you probably paid $7,000 cash down or so in 1976 dollars.
$147,772 into $500,000 in 40 years isn't that great a return..but
$30k or so into $500,000 is a much nicer return
A lot of people that say stuff like real estate isn't as good an investment as the stock market or , real estate just keeps up with inflation don't get the important power of leverage.
Also that doesn't take into account all the money you could of made on rent over the years when your mortgage payment was very low versus market rents.
In CA many people got wealthy just by buying a home.
They didn't have to pick the magical unicorn home , like someone picking Microsoft or Apple at the right time
They just had to pick the right region like the Bay Area or all of Southern California pretty much.
Or anywhere in Manhattan
Just some examples.
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