Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Puzzling that people think only assets that throw off income can be included in one's net worth.

What about gold bars, high value artwork, etc.?

When people ask about our NW, we only include our non-earmarked liquid assets. This is the truly meaningful amount and omits anything that provides utility or is set aside for a future expense: functional NW as opposed to technical NW.

In this functional NW number, we exclude our home, cars, personal property, 529 plans, retirement accounts, and HSAs. In our experience, the more affluent people all do the same thing. It is the upper middle class and below that tends to inflate their NW estimates using any means available to keep up with the Joneses.

We’re in our early 40s and have a functional NW – by our practical definition – of about $10M. If we include ALL ASSETS and ALL LIABILITIES, our technical NW is closer to $300M.

Never in my life has anyone asked about my net worth.

You are too poor. Forbes asks me about my NW frequently.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Puzzling that people think only assets that throw off income can be included in one's net worth.

What about gold bars, high value artwork, etc.?

When people ask about our NW, we only include our non-earmarked liquid assets. This is the truly meaningful amount and omits anything that provides utility or is set aside for a future expense: functional NW as opposed to technical NW.

In this functional NW number, we exclude our home, cars, personal property, 529 plans, retirement accounts, and HSAs. In our experience, the more affluent people all do the same thing. It is the upper middle class and below that tends to inflate their NW estimates using any means available to keep up with the Joneses.

We’re in our early 40s and have a functional NW – by our practical definition – of about $10M. If we include ALL ASSETS and ALL LIABILITIES, our technical NW is closer to $300M.

$10 vs $300 is a big difference!! For comparison my #s would be around $14 vs $18 M. Is your house worth $200 M?

I agree---their numbers do not add up/make much sense.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Puzzling that people think only assets that throw off income can be included in one's net worth.

What about gold bars, high value artwork, etc.?

When people ask about our NW, we only include our non-earmarked liquid assets. This is the truly meaningful amount and omits anything that provides utility or is set aside for a future expense: functional NW as opposed to technical NW.

In this functional NW number, we exclude our home, cars, personal property, 529 plans, retirement accounts, and HSAs. In our experience, the more affluent people all do the same thing. It is the upper middle class and below that tends to inflate their NW estimates using any means available to keep up with the Joneses.

We’re in our early 40s and have a functional NW – by our practical definition – of about $10M. If we include ALL ASSETS and ALL LIABILITIES, our technical NW is closer to $300M.

$10 vs $300 is a big difference!! For comparison my #s would be around $14 vs $18 M. Is your house worth $200 M?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We bought with a 400K down payment a few years back. Our house has appreciated a little bit. If I wanted to sell tomorrow I'd get that 400K + more back in a month or two (yes, even taking closing costs and commissions into account). So yeah, it's as much a part of my NW as my investments are, neither of which are 100% guaranteed returns until they're liquidated.

Yeah but don’t you need that money to find another place to live?

DP here. Yes, they need a place to live but they’re wealthier with a home worth $400k than if they were just renting a place and had no assets. In an emergency they could sell the house and use the money for rent.

Anonymous wrote:

Anonymous wrote:I see a lot of folks saying not to do this. IMO, the main issues would be whether a) you live in a very expensive home vs cheap home (or HCOL vs LCOL) and b) willingness to relocate or downsize in retirement. It's much easier to utilize the equity in an expensive multi million dollar house than a cheap 500k house for living purposes. If you live in a city like DC, NYC, SF you can easily find a bigger property in a cheaper area for a fraction of the cost. What's the harm in including a 3M townhouse in your NW if you intend to sell it eventually and downsize to a 500k property in another state (or country)?

I know some people can't imagine not living in a major city, but many of us are only here for economic opportunities and couldn't care less for the culture or amenities.

This topic has been rehashed a thousand times here.

I personally don't since I live in a house valued at about $1m, with a $250K remaining mortgage. If I do choose to sell, I may net $650K which will go right into another house. Kinda pointless tracking value and mortgage balance year over year for things to net out.

If I were living in a house valued at $4M with zero mortgage AND I definitely plan on moving to a low cost area into a nice house worth $1M, then I would include the excess RE ($3M) in my net worth. Same goes for any rental properties.

The pedantic among us will always want to include primary residence as part of net worth and show the remaining mortgage as a liability, because "that's what the textbooks say". If that makes you happy, go for it. I have $10M+ financial assets so adding or not adding the $650K RE ain't gonna make my d*ck any bigger. But you do you.

Anonymous wrote:

Anonymous wrote:Puzzling that people think only assets that throw off income can be included in one's net worth.

What about gold bars, high value artwork, etc.?

When people ask about our NW, we only include our non-earmarked liquid assets. This is the truly meaningful amount and omits anything that provides utility or is set aside for a future expense: functional NW as opposed to technical NW.

In this functional NW number, we exclude our home, cars, personal property, 529 plans, retirement accounts, and HSAs. In our experience, the more affluent people all do the same thing. It is the upper middle class and below that tends to inflate their NW estimates using any means available to keep up with the Joneses.

We’re in our early 40s and have a functional NW – by our practical definition – of about $10M. If we include ALL ASSETS and ALL LIABILITIES, our technical NW is closer to $300M.

Anonymous wrote:

Anonymous wrote:We bought with a 400K down payment a few years back. Our house has appreciated a little bit. If I wanted to sell tomorrow I'd get that 400K + more back in a month or two (yes, even taking closing costs and commissions into account). So yeah, it's as much a part of my NW as my investments are, neither of which are 100% guaranteed returns until they're liquidated.

Yeah but don’t you need that money to find another place to live?

Anonymous wrote:

Anonymous wrote:We bought with a 400K down payment a few years back. Our house has appreciated a little bit. If I wanted to sell tomorrow I'd get that 400K + more back in a month or two (yes, even taking closing costs and commissions into account). So yeah, it's as much a part of my NW as my investments are, neither of which are 100% guaranteed returns until they're liquidated.

As it should be! yes you need a place to live, but that doesn't need to be a $2M home.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Puzzling that people think only assets that throw off income can be included in one's net worth.

What about gold bars, high value artwork, etc.?

When people ask about our NW, we only include our non-earmarked liquid assets. This is the truly meaningful amount and omits anything that provides utility or is set aside for a future expense: functional NW as opposed to technical NW.

In this functional NW number, we exclude our home, cars, personal property, 529 plans, retirement accounts, and HSAs. In our experience, the more affluent people all do the same thing. It is the upper middle class and below that tends to inflate their NW estimates using any means available to keep up with the Joneses.

We’re in our early 40s and have a functional NW – by our practical definition – of about $10M. If we include ALL ASSETS and ALL LIABILITIES, our technical NW is closer to $300M.

Never in my life has anyone asked about my net worth.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Puzzling that people think only assets that throw off income can be included in one's net worth.

What about gold bars, high value artwork, etc.?

When people ask about our NW, we only include our non-earmarked liquid assets. This is the truly meaningful amount and omits anything that provides utility or is set aside for a future expense: functional NW as opposed to technical NW.

In this functional NW number, we exclude our home, cars, personal property, 529 plans, retirement accounts, and HSAs. In our experience, the more affluent people all do the same thing. It is the upper middle class and below that tends to inflate their NW estimates using any means available to keep up with the Joneses.

We’re in our early 40s and have a functional NW – by our practical definition – of about $10M. If we include ALL ASSETS and ALL LIABILITIES, our technical NW is closer to $300M.

Never in my life has anyone asked about my net worth.

Anonymous wrote:

Anonymous wrote:Puzzling that people think only assets that throw off income can be included in one's net worth.

What about gold bars, high value artwork, etc.?

When people ask about our NW, we only include our non-earmarked liquid assets. This is the truly meaningful amount and omits anything that provides utility or is set aside for a future expense: functional NW as opposed to technical NW.

In this functional NW number, we exclude our home, cars, personal property, 529 plans, retirement accounts, and HSAs. In our experience, the more affluent people all do the same thing. It is the upper middle class and below that tends to inflate their NW estimates using any means available to keep up with the Joneses.

We’re in our early 40s and have a functional NW – by our practical definition – of about $10M. If we include ALL ASSETS and ALL LIABILITIES, our technical NW is closer to $300M.