Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most billionaires have an illiquid net worth. Sure they might have a couple hundred mil in cash and USTs, but homes, boats, art, jewelry, and even their stock can be illiquid (you don't want to sell too much at once of a single company lest you tank the market value).

So yeah, it's assets minus liabilities. And that includes your residences, since you put up some equity capital for a down payment.

For most of us, our net worth is illiquid if its mostly tied up in real estate and retirement accounts.

And most non-billionaires have Real Estate investments (e.g. rentals) that are perfectly fine being included in one's net worth. The topic is about home equity, as in the equity you have in your primary residence. I don't count it. If you do, great! If you don't, great! If you include a percentage of it, great! You do you..

Since you can't access retirement savings without penalties before age 59.5 (except Roth IRA contributions), that's too illiquid and I propose 401(k)s should be excluded from net worth calculations.

Let's all come up with our own asinine definitions of words, and then no one can have a conversation about net worth because it means something different to each person - yay!

Anonymous wrote:

Anonymous wrote:Most billionaires have an illiquid net worth. Sure they might have a couple hundred mil in cash and USTs, but homes, boats, art, jewelry, and even their stock can be illiquid (you don't want to sell too much at once of a single company lest you tank the market value).

So yeah, it's assets minus liabilities. And that includes your residences, since you put up some equity capital for a down payment.

For most of us, our net worth is illiquid if its mostly tied up in real estate and retirement accounts.

And most non-billionaires have Real Estate investments (e.g. rentals) that are perfectly fine being included in one's net worth. The topic is about home equity, as in the equity you have in your primary residence. I don't count it. If you do, great! If you don't, great! If you include a percentage of it, great! You do you..

Anonymous wrote:

Anonymous wrote:Most billionaires have an illiquid net worth. Sure they might have a couple hundred mil in cash and USTs, but homes, boats, art, jewelry, and even their stock can be illiquid (you don't want to sell too much at once of a single company lest you tank the market value).

So yeah, it's assets minus liabilities. And that includes your residences, since you put up some equity capital for a down payment.

For most of us, our net worth is illiquid if its mostly tied up in real estate and retirement accounts.

And most non-billionaires have Real Estate investments (e.g. rentals) that are perfectly fine being included in one's net worth. The topic is about home equity, as in the equity you have in your primary residence. I don't count it. If you do, great! If you don't, great! If you include a percentage of it, great! You do you..

Anonymous wrote:

Anonymous wrote:Most billionaires have an illiquid net worth. Sure they might have a couple hundred mil in cash and USTs, but homes, boats, art, jewelry, and even their stock can be illiquid (you don't want to sell too much at once of a single company lest you tank the market value).

So yeah, it's assets minus liabilities. And that includes your residences, since you put up some equity capital for a down payment.

For most of us, our net worth is illiquid if its mostly tied up in real estate and retirement accounts.

And most non-billionaires have Real Estate investments (e.g. rentals) that are perfectly fine being included in one's net worth. The topic is about home equity, as in the equity you have in your primary residence. I don't count it. If you do, great! If you don't, great! If you include a percentage of it, great! You do you..

Anonymous wrote:Most billionaires have an illiquid net worth. Sure they might have a couple hundred mil in cash and USTs, but homes, boats, art, jewelry, and even their stock can be illiquid (you don't want to sell too much at once of a single company lest you tank the market value).

So yeah, it's assets minus liabilities. And that includes your residences, since you put up some equity capital for a down payment.

For most of us, our net worth is illiquid if its mostly tied up in real estate and retirement accounts.

Anonymous wrote:If someone asks ‘what is your net worth?’ I I will answer with the Sun of all my assets minus the sum of all my debts. That will include house equity and 529 savings.

If someone asks ‘how much have you saved for retirement?’ I will answer with just my retirement savings.

^^ sub ‘college’ for ‘retirement’ and I’ll give you our 529 account balance.

Anonymous wrote: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).

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Calculate your net worth however you want, people. When I opened an account at Schwab, and they asked for my net worth, they had a helpful explanation of what to include. People who are really interested in your net worth will make it easy for you! My wealth is structured such that my small home's value is a rounding error in my stock portfolio. Others might have most of their assets in their home. Calculations will therefore differ.

So you can stop arguing and enjoy what's left of your Sunday.

+1. But the pedantic crowd won't let you. They insist everyone include home equity in their net worth!

For the majority of Americans with more than a negligible net worth, home equity is the single largest asset. Further, for almost everyone else not in the top 1%, home equity would still comprise a significant portion of their net worth even if it’s not the largest asset.

Therefore, saying that home equity shouldn’t count “because you can’t spend it” is absurd, and it is in no way pedantic for us to point out this absurdity.

Anonymous wrote:

Anonymous wrote: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).

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.

Anonymous wrote: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).

Anonymous wrote: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).