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Reply to "Do you include your home equity in net worth ? "
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[quote=Anonymous][quote=Anonymous]I understand academically it’s part of our net worth. But when we discuss our “number” (to retire) we don’t include it because we need a place to live and it’s also not throwing off income. [/quote] This. OP - I don't include the home equity of my primary residence in my number (aka net worth) for the exact reason stated above. Academically, the definition of Net Worth does include all your assets less all your liabilities, but life is not an academic exercise and you need to do what makes sense to you. Including the value of your my primary home's equity gives you a false sense of security that you have more than what you really can realistically tap into. Not including is a more conservative and practical way to track 'net worth'. At the end of the day, do what makes sense to you. Follow the text book or follow common sense.[/quote]
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