Reply to Do you include your home equity in net worth ?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Maybe somebody answered this, but thinking not.  For all those who are not including home equity in net worth, are you including your mortgage balance (if any) as a reduction to your net worth?  And please explain how that is a logical choice, since as another poster has mentioned, it seems inconsistent (to say the least).[/quote]

Although you made me think on that. A basic net worth calculation involves both home value and mortgage balance. But if you don't plan to move, there's arguably an "operational net worth" in retirement that would take your financial assets (i.e., resources you have to pay the mortgage with) and your mortgage balance. Until retirement, that's not a meaningful metric because you're paying mortgage out of income.[/quote]

But I suppose you have income in retirement as well (SS) so that's still kind of flawed. Point being that the net worth calculation is only as useful as how you're using it. If you're applying for a bank loan, everything goes into the basic calculation.[/quote]

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