Reply to Do you include your home equity in net worth ?

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[quote=Anonymous]I track my finances fairly closely, and here is how I approach it.

First, for purposes of my calculations (I have a spreadsheet to record my asset values at set intervals), I value my house at roughly 90% of what I anticipate I could sell it at on the open market, informed mostly by an average of Zillow/Redfin/Trulia. I do this to take into account the equity value if I were to sell, as I'd need to cover commission, seller-side transaction taxes, other sale expenses that may arise, and a bit of buffer for sale price.

Second, using that value, I calculate my "net worth"--which is really just the total value of all our assets. Over the years, the categories have grown, and real estate value net of mortgage is one category.

Third, I also calculate where I stand with respect to my retirement-goal "walk-away" number. This number is a sub-set of net worth. It does not include any of our real estate assets, 529s, cars, personal property, etc. Rather, the walk-away number is based on investment + retirement accounts.

While I don't post numbers here often, if I were to post my "net worth," I would include all real estate equity (calculated as above), including principal residence. If I were to post my goal towards my "walk away" number, it would exclude real estate, among other things. So, for me at least, the answer to your question is a bit nuanced.

I'd presume that when most folks post their "NW," they are including home equity. [/quote]

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