Reply to FYI: Don't include home equity in net worth

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I think OP phrased it poorly.  It’s not about asset making income or not, it’s about having to allocate the asset for personal consumption.  You cannot be homeless.  But this idea of OP still doesn’t hold because there is not definition of what shelter must be and how much it must cost.  You absolutely should count your equity in a house you live in because you CAN sell it and exchange it for something less expensive or rent something instead.  In this case this equity becomes a part of your NW in the definition OP wants to follow, as it is now investable.  Investment income from this may go towards covering your living costs in a rental with the rest saved/reinvested.  But according to the definition it is a part of your asset portfolio capable of earning income. [/quote]

i also think OP and others who agree don’t really have much net worth to begin with and can’t see that this board skews wealthy. Many people have 2nd homes and have investment properties. People like myself purchased an investment in our early 40s with the intent for it to be a retirement home so our primary home in indeed money we will be able to cash in tax free and not need to use for another home. My retirement home is currently being paid down by renters. And if I decide I don’t want to live in that home? Who cares, I will 1031 exchange it into something else, but I’m  definitely not using the funds from my primary home. Thats hitting my pocket.  I’m certainly not alone in this. [/quote]

Not sure if you read all the posts but several posters clarified that it's equity in a 'normal' primary residence that should be excluded and not investment property. I'm one of those that lives in a normal house (i.e. not a $5M house while I can easily live in a $1M one) and I don't include the equity in my assets for the purpose of retirement planning. The one rental I own, I certainly do. 
Also, I think it's the relatively poor that clamor to include their primary home equity in their net worth so they appear rich. Someone whose home equity is less than 10% of their total worth won't need to.[/quote]

The problem with you and OP is that you are misunderstanding and misusing the term “Net Worth”.
We understand what you are trying to define: Assets that you plan to draw income from to fund your retirement.

Nobody will disagree with you if you say, [i]I’m not including home equity in the assets I plan to use to fund my retirement.[/i] Someone else may even decide to not include money in their brokerage account if they won’t use it. Their choice.

Everyone is free to choose which assets they want to exclude from their retirement planning. 
But everyone doesn’t get to redefine Net Worth to their liking.

Money you plan to use to fund retirement IS NOT the same as your net worth. [/quote]

Chill dude! Get your head out of your pedantic a**. Everyone is aware of textbook definitions. This is not a classroom discussion and goes beyond that. I use net worth to exclude primary residence and will continue to do so in future discussions on here because it makes  sense to ME. Don't like it, don't use it. GTFO![/quote]

Words have meanings. If you decide they mean something other than the understood definition you are the one that is wrong. Not sure why you’re so worked up about that. [/quote]

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