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[quote=Anonymous][quote=Anonymous][quote=Anonymous]We met with a financial advisor at Schwab a few years ago to come up with a retirement funding plan.  In the process, they calculated our "net worth."  It's very straightforward:  assets minus liabilities.  We have two homes, together worth about $2.5 million, but have a $600k mortgage on one of them.  So the advisor included the $1.9 million we have in equity as part of our net worth.

Then, when coming up with our numbers, the advisor assigned that part of our net worth to "not funding goals."

That's how this works, folks.  "Net worth" is a defined financial term -- assets minus liabilities -- and as such it includes the value of your real estate minus mortgages.  Whether you use it or not for retirement planning is a separate and irrelevant issue.[/quote]

I just don’t care what my net worth is if it includes assets like my home, which I do not plan to liquidate to fund my lifestyle. So I don’t really bother tracking it. The metric I think is useful is the value of my investments, both taxable and in retirement accounts. Technically we’re worth more than I think we are, possibly significantly more, but so what?[/quote]

It's not just about whether you care.

Funding your lifestyle in retirement isn't the only reason why your net worth is calculated,

Insurance companies will require your net worth, which must include the equity in your home. Financial advisors will also need to consider your home equity to accurately calculate your net worth for financial planning.

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