Reply to Just surpassed $1m net worth

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[quote=Anonymous][quote=Anonymous]Purely out of curiosity, those of you who don't count home equity, do you still count your mortgage against your net worth? Or do you just leave housing out altogether? [/quote]

There's no question that home equity is, by definition part of your net worth.  Also by definition, your home equity is the value of your home minus any debt outstanding against it, so yes, your mortgage is "counted."  As for your question - if you don't include home equity, do you still "count" (subtract?) your mortgage? - that wouldn't make any sense at all.  I presume if people wanted to take that approach, then yes, they should be "leaving housing out altogether," but then, that wouldn't be their net worth.

Some people like to get caught up in the semantics of this, but don't confuse your net worth with your "liquid net worth," or whether or not your investment banker is going to call you a "high net worth individual" or whether or not you have "investable assets" of a particular value or any of that.  Those are different.  Net worth is a finance and accounting concept, and there's really only one way to calculate it - everything you own, minus everything you owe.[/quote]

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