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Not quite....but close...so i'll post if you don't mind.
38, married. 3 kids.
NW is $1.72M. Engineer. Wife stay at home mom.
Returns have been bad for me over the past 12 months (up only $80k due to one of my stocks (TSLA) performing badly...but i expect it to go up soon).
UP $700k since 4 years ago though....Hit $1M at 34 through living below my means, saving, and investing.
We travel at least twice a year...each about 2 or so weeks. Salary $150k.
Understanding Net Worth
Net worth (assets minus liabilities) gauges financial health. An asset is anything that is owned and has monetary value while liabilities are obligations that deplete resources. Assets can be liquid when they are, or can be easily turned into, cash (like a checking account). They are non-liquid when it could take time to turn into cash (like a home). Liabilities are obligations that have to paid off (like a car loan).
To the 'global / overall' intent... that might be OK. PRACTICALLY (As in you may need to change asset classes... I just use 'liquid' assets for NW calculation. I have seen housing stagnate for decades. Not being able to sell something means it is NOT accessible funds, and may never be)
Understanding Net Worth
Net worth (assets minus liabilities) gauges financial health. An asset is anything that is owned and has monetary value while liabilities are obligations that deplete resources. Assets can be liquid when they are, or can be easily turned into, cash (like a checking account). They are non-liquid when it could take time to turn into cash (like a home). Liabilities are obligations that have to paid off (like a car loan).
To the 'global / overall' intent... that might be OK. PRACTICALLY (As in you may need to change asset classes... I just use 'liquid' assets for NW calculation. I have seen housing stagnate for decades. Not being able to sell something means it is NOT accessible funds, and may never be)
Then do you not count the liabilities tied to real estate?
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by Mr. Zero
Then do you not count the liabilities tied to real estate?
I just leave RE off my "Invest-able-NW", as I would the value of pensions / time payments...
The 'Liability' side of my assets better by covered within the asset, or I am in real trouble (underwater).
If I were to own a $20m shopping center that has fallen in value to $2m, yup... I would be shaving the outstanding balance off my NW (since commercial notes are 'callable' and I would need to cough up the dough, as many had to do in 2009).
My personal home is NOT included in my NW (in a FIRE or investment discussion), as I intend to stay there, then donate it to charity (life estate). (I will never see the financial benefit of it's equity +/-).
The reason I bring it up is that many realtors (and even Financial Advisors ) promote personal home ownership as the LARGEST most important asset(?) in your portfolio. I disagree, as my home is a liability while I am occupying it (Taxes, insurance, maint...). If one is gonna sell their home (and live off proceeds) then it is appropriate to designate the allocated equity above the cost of a future place to live; (as 'invest-able NW' / $$ you intend to access for earnings).
For the young buckaroos... grabbing that $500k tax free capital gain exclusion on primary residence every 24 months is a good way to grow wealth. BTDT a few times myself. Several co-workers do it like clockwork / same as trading cars... every 2 yrs = another home that is low cost, but HIGH return. A neighbor and good friend has done (9x) (Build / live / sell). That's $4m in FREE gains. (except moving furniture every 24 months).
not a bad gig (and very ez in the right RE market)
Some C-D posters do it with 'Pre-builds'... By a condo under construction and sell as soon as you can legally declare it as your residence for 24 months. Some investors buy commercial properties (that can be legally occupied as residence) which is awaiting zone changes or utility connections and put up a teepee / RV / mailbox and go on vacation for 24 months (and have it sold to developers by the time they return "home")... Cha-ching... deposit $500k into NW and move on to next one.
Understanding Net Worth
Net worth (assets minus liabilities) gauges financial health. An asset is anything that is owned and has monetary value while liabilities are obligations that deplete resources. Assets can be liquid when they are, or can be easily turned into, cash (like a checking account). They are non-liquid when it could take time to turn into cash (like a home). Liabilities are obligations that have to paid off (like a car loan).
To the 'global / overall' intent... that might be OK. PRACTICALLY (As in you may need to change asset classes... I just use 'liquid' assets for NW calculation. I have seen housing stagnate for decades. Not being able to sell something means it is NOT accessible funds, and may never be)
net worth is net worth. assets minus liabilities. it may be changing all the time and it may be hard to estimate the value of some assets but you do your best if you want to come up with a net worth figure.
Yeah just because something isn’t immediately movable doesn’t make it less a part of your net worth. Almost all of my net worth is commercial real estate investments with various situations and timelines where they may be sold soon or may not be sold at all. If they’re not being sold, the intention is cash flow from them. I can’t just cash out whenever I want as they’re not open market investments. In that respect my net worth is much higher on paper than it is in practice I suppose, but either way it’s fine by me.
Understanding Net Worth
Net worth (assets minus liabilities) gauges financial health. An asset is anything that is owned and has monetary value while liabilities are obligations that deplete resources. Assets can be liquid when they are, or can be easily turned into, cash (like a checking account). They are non-liquid when it could take time to turn into cash (like a home). Liabilities are obligations that have to paid off (like a car loan).
To the 'global / overall' intent... that might be OK. PRACTICALLY (As in you may need to change asset classes... I just use 'liquid' assets for NW calculation. I have seen housing stagnate for decades. Not being able to sell something means it is NOT accessible funds, and may never be)
But almost any home can be sold for a price. Net worth would be what that housing is worth at the time you calculate net worth. If a year from now it goes down, then so does your net worth. But liquid assets like stock are the same. It's the value when you calculate. It's value can drop or go up next year. Just because you have 500k in the market doesn't mean it will always be that.
For calculating my retirement draw rate only liquid invested assets that can be rebalanced , sold or spent are counted ....if it is a net worth statement for state estate tax purposes all assets get counted .....if it is to feel good ,count everything , I mean throw in the car , your furniture, whatever can be sold .
I agree with going business over first...just don't see the value in doing first when you're still going to get a bed (and better meals than economy) in business.
At this point I'm still ok with going to most of Europe in one of the upgraded Economy seats though. Now, somewhere around an 11 hour+ flight is a different story and the line at which for me business starts to seem more reasonable.
Another thing you can do on SOME airlines is to book a business class ticket TO Europe (as an example) and an upgraded coach ticket on the return. Take the night flights over and be comfortable and then an afternoon flight back. You are already well rested so you won't notice it being uncomfortable as much. So it's half the price of a business class + half the price of a coach ticket.
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