Reply to What is net worth and why does it matter?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Here is an example of how to calculate net worth and why it is everything.  Our balance sheet is:

[b]Assets[/b]:

Home value: $1.7 million.

Retirement savings:  $3.1 million

Brokerage and checking accounts:  $1.51 million

Total assets:  $6.21 million

[b]Liabilities:[/b]

Home mortgage:  $745k

[b]Net worth:[/b]  $5.565 million

[b]Annual income:[/b]  [i]Zero[/i]

Retired in early 50s[/quote]

And for the counterexample:

Assets:
Home value: $1M
Retirement Savings: $400k
Brokerage and checking accounts: $100k
Total Assets: $1.5M

Liabilities:
Mortgage: $700k
HELOC: $200k
Credit Card debt: $50k

Net Worth: $750k
Age: 55
Annual Income: $500k
Status: up shit creek.[/quote]

But with a $500k annual income one could quickly build up their net worth if the so desired. This is hardly up shit creek.[/quote]

It's not ideal. This poster is 55 (not young!) And sitting on 900k in mortgage debt with no end in sight, plus a major spending problem with 50k in credit card debt. This individual will be on the grinding  hamster wheel long after many of their peers are winding down enjoying life. Hopefully this poster is self employed because age discrimination is just around the corner.[/quote]

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