The Original AG 76 said:

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62strat said:

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Bob_Ag said:

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Net worth numbers surprise me as well. Not so much that we have some high earners, but that so many are net worth positive considering most respondents are relatively younger.

Have that many people payed off their house and/or socked away hundreds of thousands into their investment accounts before 35? If so, very impressive and way, way above the national average I would guess.

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Not sure why you think you need to pay off a house to consider it positive net worth. At this point, even if you bought right at top of 2008 bubble, I highly doubt you are negative equity for your home.

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I think we had a thread on this a few years ago. If memory serves (and that's REAL IFY ) most of us don't count equity nor personal property in a net worth number. I may consider investment properties or your second home since they can be readily sold but no way do I count my home , cars and junk .

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Whether you count home equity in your net worth or not, there's no reason for someone to believe you have to pay off a home to get positive net worth out of it. Not sure how your comment is related to my response of what I quoted.


Cars and junk, I agree, they do nothing to net worth since they only depreciate to $0 anyway. But primary residence should be a part of your net worth. My home today is worth $500k, and when I sell it in 20-25 years at retirement, I'll have a crap load of money. And in what world is a home not easily sold? I've had several neighbors who moved in when I did 5 years ago sell and move out of state.. taking $100k+ profit with them. It is not hard to sell a house.

Same on the slip side.. if you had to sell in 2009, chances are you very much had a negative hit to your net worth.

Bob_Ag said:

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The Original AG 76 said:

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62strat said:

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Bob_Ag said:

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Net worth numbers surprise me as well. Not so much that we have some high earners, but that so many are net worth positive considering most respondents are relatively younger.

Have that many people payed off their house and/or socked away hundreds of thousands into their investment accounts before 35? If so, very impressive and way, way above the national average I would guess.

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Not sure why you think you need to pay off a house to consider it positive net worth. At this point, even if you bought right at top of 2008 bubble, I highly doubt you are negative equity for your home.

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I think we had a thread on this a few years ago. If memory serves (and that's REAL IFY ) most of us don't count equity nor personal property in a net worth number. I may consider investment properties or your second home since they can be readily sold but no way do I count my home , cars and junk .

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Right, this is kind of my thinking. Sure your primary residence is an asset, but it's pretty difficult to utilize since you will need a primary residence for most of your life. I look at the mortgage as a liability, but I don't really consider the equity in my house to be a usable asset unless I'm just sinking that right back into another house. Only in a scenario where maybe I downsized or inherited another residence could I realize the gain from my home, but far and away most people are sinking their appreciation into an even nicer and more expensive home.

I can see the other side of the argument here though as well.

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This is a flawed argument though.. When is net worth most important? When you retire right? It determines WHEN you CAN retire, after all. So while ignoring equity while you're 35 may make perfect sense as you've explained, when you are retired, it becomes extremely important to include in your net worth.

So I don't understand the view point to not include it. It would be like saying I don't include a pension in my retirement planning, because right now I'm 40 and can't access/use it.

At the end of the day, we could sell our house here today, move back to where we were in NW Houston, and just about buy our house there in cash (We have $200k in equity). Because of this, you can't convince me my home equity doesn't affect my net worth.

You do not have to downsize to make this happen. If we did this, we'd likely have a lateral move.. same square footage. People move here to CO from CA everyday taking several hundred thousand dollars with them from home appreciation in CA and end up in a bigger home with little to no mortgage. It seems everyone with this view point assumes any equity you make in a home you lose by buying the next house. Sure, this happens if you move down the street, but thousands of people every day move to other cities, states and countries. It's a huge assumption to say you'll just sink it in the inflated price of your next home.

62strat said:

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Bob_Ag said:

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The Original AG 76 said:

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62strat said:

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Bob_Ag said:

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Net worth numbers surprise me as well. Not so much that we have some high earners, but that so many are net worth positive considering most respondents are relatively younger.

Have that many people payed off their house and/or socked away hundreds of thousands into their investment accounts before 35? If so, very impressive and way, way above the national average I would guess.

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Not sure why you think you need to pay off a house to consider it positive net worth. At this point, even if you bought right at top of 2008 bubble, I highly doubt you are negative equity for your home.

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I think we had a thread on this a few years ago. If memory serves (and that's REAL IFY ) most of us don't count equity nor personal property in a net worth number. I may consider investment properties or your second home since they can be readily sold but no way do I count my home , cars and junk .

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Right, this is kind of my thinking. Sure your primary residence is an asset, but it's pretty difficult to utilize since you will need a primary residence for most of your life. I look at the mortgage as a liability, but I don't really consider the equity in my house to be a usable asset unless I'm just sinking that right back into another house. Only in a scenario where maybe I downsized or inherited another residence could I realize the gain from my home, but far and away most people are sinking their appreciation into an even nicer and more expensive home.

I can see the other side of the argument here though as well.

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This is a flawed argument though.. When is net worth most important? When you retire right? It determines WHEN you CAN retire, after all. So while ignoring equity while you're 35 may make perfect sense as you've explained, when you are retired, it becomes extremely important to include in your net worth.

So I don't understand the view point to not include it. It would be like saying I don't include a pension in my retirement planning, because right now I'm 40 and can't access/use it.

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Sure, but when you are retired and the mortgage is paid off, are you going to sell your home and cash out? No. Equity is important in the sense that you are decreasing the liability towards your net worth, but it is not a common circumstance where the equity in your home is actually usable as an asset for anything other than buying another primary residence. So in that sense, I have hard time tacking on my primary residence as huge driver towards positive net worth.

It's nothing like a pension. You can access your pension at some point. The equity in my home is only accessible if I sell and choose to live in a van down by the river (there are some scenarios, but it is not common).

62strat said:

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Bob_Ag said:

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The Original AG 76 said:

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62strat said:

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Bob_Ag said:

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Net worth numbers surprise me as well. Not so much that we have some high earners, but that so many are net worth positive considering most respondents are relatively younger.

Have that many people payed off their house and/or socked away hundreds of thousands into their investment accounts before 35? If so, very impressive and way, way above the national average I would guess.

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Not sure why you think you need to pay off a house to consider it positive net worth. At this point, even if you bought right at top of 2008 bubble, I highly doubt you are negative equity for your home.

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I think we had a thread on this a few years ago. If memory serves (and that's REAL IFY ) most of us don't count equity nor personal property in a net worth number. I may consider investment properties or your second home since they can be readily sold but no way do I count my home , cars and junk .

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Right, this is kind of my thinking. Sure your primary residence is an asset, but it's pretty difficult to utilize since you will need a primary residence for most of your life. I look at the mortgage as a liability, but I don't really consider the equity in my house to be a usable asset unless I'm just sinking that right back into another house. Only in a scenario where maybe I downsized or inherited another residence could I realize the gain from my home, but far and away most people are sinking their appreciation into an even nicer and more expensive home.

I can see the other side of the argument here though as well.

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This is a flawed argument though.. When is net worth most important? When you retire right? It determines WHEN you CAN retire, after all. So while ignoring equity while you're 35 may make perfect sense as you've explained, when you are retired, it becomes extremely important to include in your net worth.

So I don't understand the view point to not include it. It would be like saying I don't include a pension in my retirement planning, because right now I'm 40 and can't access/use it.

At the end of the day, we could sell our house here today, move back to where we were in NW Houston, and just about buy our house there in cash (We have $200k in equity). Because of this, you can't convince me my home equity doesn't affect my net worth.

You do not have to downsize to make this happen. If we did this, we'd likely have a lateral move.. same square footage. People move here to CO from CA everyday taking several hundred thousand dollars with them from home appreciation in CA and end up in a bigger home with little to no mortgage. It seems everyone with this view point assumes any equity you make in a home you lose by buying the next house. Sure, this happens if you move down the street, but thousands of people every day move to other cities, states and countries. It's a huge assumption to say you'll just sink it in the inflated price of your next home.

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Sorry missed your edits. I don't want to derail the thread, but I can see your points. I live in Austin and see people from Cali paying cash while also pocketing thousands from selling their homes out west. I also think that for the far majority of people your house is an non-liquid asset that is only really accessible in certain scenarios (like yours, for example). Most people can't just sell their homes after a 30 year mortgage and suddenly have access to hundreds of thousands of dollars.

62strat said:

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The Original AG 76 said:

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62strat said:

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Bob_Ag said:

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Net worth numbers surprise me as well. Not so much that we have some high earners, but that so many are net worth positive considering most respondents are relatively younger.

Have that many people payed off their house and/or socked away hundreds of thousands into their investment accounts before 35? If so, very impressive and way, way above the national average I would guess.

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Not sure why you think you need to pay off a house to consider it positive net worth. At this point, even if you bought right at top of 2008 bubble, I highly doubt you are negative equity for your home.

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I think we had a thread on this a few years ago. If memory serves (and that's REAL IFY ) most of us don't count equity nor personal property in a net worth number. I may consider investment properties or your second home since they can be readily sold but no way do I count my home , cars and junk .

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Whether you count home equity in your net worth or not, there's no reason for someone to believe you have to pay off a home to get positive net worth out of it. Not sure how your comment is related to my response of what I quoted.


Cars and junk, I agree, they do nothing to net worth since they only depreciate to $0 anyway. But primary residence should be a part of your net worth. My home today is worth $500k, and when I sell it in 20-25 years at retirement, I'll have a crap load of money. And in what world is a home not easily sold? I've had several neighbors who moved in when I did 5 years ago sell and move out of state.. taking $100k+ profit with them. It is not hard to sell a house.

Same on the slip side.. if you had to sell in 2009, chances are you very much had a negative hit to your net worth.

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I count my cars. They are an asset I can liquidate. If I relocate for a job that allows me to ride a bicycle to work my cars get converted to cash. The value does depreciate over time so their factor towards my net worth decreases but they are still considered part of the total.

Similarly If I retire with a half million dollar house I can convert that to cash and live in a tent traveling the countryside from national park to national park. The real estate has value and should be counted towards your total net worth.

I included home equity in my calculation. If in a desperate situation (read REALLY desperate) I could sell my home and use that amount I have in equity to fund renting an apartment somewhere for x number of years to survive. That is definitely an asset.

If i were to not count home equity as an asset in my NW calculation I would not count the liability of my home loan against it either and to me that would be silly. In my view net worth is as simple as value of total assets - value of total liabilities. Key assumption being is that everything can be liquidated. I know my company certainly considers the office buildings we own and work in as assets, even given the implication that if we sold the building we would have to find someplace else to set up shop.

TriumphForks said:

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I included home equity in my calculation. If in a desperate situation (read REALLY desperate) I could sell my home and use that amount I have in equity to fund renting an apartment somewhere for x number of years to survive. That is definitely an asset.

If i were to not count home equity as an asset in my NW calculation I would not count the liability of my home loan against it either and to me that would be silly. In my view net worth is as simple as value of total assets - value of total liabilities. Key assumption being is that everything can be liquidated. I know my company certainly considers the office buildings we own and work in as assets, even given the implication that if we sold the building we would have to find someplace else to set up shop.

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This is my view too. I essentially look at my net worth as how much i'm worth if i die today and my entire estate were liquidated- (not counting life insurance since it's not really an asset)

Ragoo said:

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62strat said:

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The Original AG 76 said:

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62strat said:

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Bob_Ag said:

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Net worth numbers surprise me as well. Not so much that we have some high earners, but that so many are net worth positive considering most respondents are relatively younger.

Have that many people payed off their house and/or socked away hundreds of thousands into their investment accounts before 35? If so, very impressive and way, way above the national average I would guess.

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Not sure why you think you need to pay off a house to consider it positive net worth. At this point, even if you bought right at top of 2008 bubble, I highly doubt you are negative equity for your home.

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I think we had a thread on this a few years ago. If memory serves (and that's REAL IFY ) most of us don't count equity nor personal property in a net worth number. I may consider investment properties or your second home since they can be readily sold but no way do I count my home , cars and junk .

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Whether you count home equity in your net worth or not, there's no reason for someone to believe you have to pay off a home to get positive net worth out of it. Not sure how your comment is related to my response of what I quoted.


Cars and junk, I agree, they do nothing to net worth since they only depreciate to $0 anyway. But primary residence should be a part of your net worth. My home today is worth $500k, and when I sell it in 20-25 years at retirement, I'll have a crap load of money. And in what world is a home not easily sold? I've had several neighbors who moved in when I did 5 years ago sell and move out of state.. taking $100k+ profit with them. It is not hard to sell a house.

Same on the slip side.. if you had to sell in 2009, chances are you very much had a negative hit to your net worth.

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I count my cars. They are an asset I can liquidate. If I relocate for a job that allows me to ride a bicycle to work my cars get converted to cash. The value does depreciate over time so their factor towards my net worth decreases but they are still considered part of the total.

Similarly If I retire with a half million dollar house I can convert that to cash and live in a tent traveling the countryside from national park to national park. The real estate has value and should be counted towards your total net worth.

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Agree. At the end of the year, I depreciate the value of my cars. This will affect my net worth.

My Net Worth Assets = House, Car x 2, Investments, Cash, Pension Valuation, Real Estate
My Net Worth Liabilities = Mortgage, Car Loan, Real Estate Loan, CC payments

Bob_Ag said:

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Sure, but when you are retired and the mortgage is paid off, are you going to sell your home and cash out? No. Equity is important in the sense that you are decreasing the liability towards your net worth, but it is not a common circumstance where the equity in your home is actually usable as an asset for anything other than buying another primary residence. So in that sense, I have hard time tacking on my primary residence as huge driver towards positive net worth.

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Um.. I'd say it is very common to eventually access the equity in your home in retirement. For parents alive today who live into their mid 60s or later, it is silly to think they will remain in the home they are in now. I bet a large majority of them will sell the large house they are in now and downsize by the time they are say 70, if not earlier.

So to answer your question, yes, at some point in my early to mid 60s, I will absolutely sell my home and cash out. Since I will not be buying anything remotely as large, I plan to pocket quite a bit after paying for whatever residence we get at that time.

Bob_Ag said:

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It's nothing like a pension. You can access your pension at some point. The equity in my home is only accessible if I sell and choose to live in a van down by the river (there are some scenarios, but it is not common).

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In the pie chart of what you can do to access home equity, I'd say 'sell it and live in van down by the river' is the smallest slice. There are so many scenarios besides this one, yet it seems like the most common argument from those that share your view point. I just don't get it. Surely you realize there are many other circumstances (as I've already laid out a few) that allow you to access your equity without being homeless.

BlackGoldAg2011 said:

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This is my view too. I essentially look at my net worth as how much i'm worth if i die today and my entire estate were liquidated- (not counting life insurance since it's not really an asset)

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Exactly. Net worth is much more than just knowing how much money you have. If you are negative equity in your home and you die, that will absolutely effect your estate, just as the opposite.

BlackGoldAg2011 said:

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Back on the topic of the survey, I think it would be fascinating to see this survey across all the boards with these results broken down to compare the trends by the board the respondent is most active on

Lookin at you politics and zoo

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That would be funny.

Would love to see a scatter plot of age vs income age vs net worth and income vs net worth. Probably some other interesting scatter plots in there too.

My salary sucks, but net worth aint bad. May just be because I'm old army and have had more time to save.

Ag92NGranbury said:

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yep...this thing is getting derailed...

a few salient points...

- i assumed that everyone would be honest in answering the survey. if you feel the need to cheat on an anonymous survey, then you have other things to worry about rather than net worth. :-)

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if one was to "cheat" this particular anonymous survey, shouldn't they skew with low inputs... so when survey results are compared to actuals, the "ruler" is smaller? and outliers on the high end are just goofballs versus cheaters.

either way your point is accurate.

For the most part I'd chalk up inaccuracies on this one to goofballs.

Stive said:

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For the most part I'd chalk up inaccuracies on this one to goofballs.

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Goofballs and lack of student loans as a debt catagory. That really throws off the picture of pretty much everyone whose graduated with some level of degree in the last 5-10 years. No differentiation between someone who got an MBA or Professional degree to advance their career and someone who lives way beyond their means with a mountain of credit card debt.

Definitely a fun survey. Thank to OP for putting it together. I'll be very interested in the results of the next one.

In the next one, I would like to know the % of household incomes with 2 working or 1 working.

Good info. I expect the vast majority were reasonably honest.

BBDP said:

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In the next one, I would like to know the % of household incomes with 2 working or 1 working.

Good info. I expect the vast majority were reasonably honest.

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why?

Home equity should absolutely be included in net worth, it's potentially a very important part of the picture. You have to live somewhere and if your home mortgage is paid off you have less liabilities. If you sell your home and invest the $ elsewhere or even if you put it under the mattress it counts as net worth so why wouldn't it count in the form of property ownership?

Thanks for doing the survey OP. I appreciate it and the data is interesting.

I'd be interested to see tighter bands on the net worth. $1-5MM is a broad band. I suggest maybe breaking it into 3 bands: 1-2, 2-3 and $3-5 MM bands?

halfastros81 said:

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Home equity should absolutely be included in net worth, it's potentially a very important part of the picture. You have to live somewhere and if your home mortgage is paid off you have less liabilities. If you sell your home and invest the $ elsewhere or even if you put it under the mattress it counts as net worth so why wouldn't it count in the form of property ownership?

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At least above and beyond 20%, as you can just refi, pull the extra equity out and now it's part of your investible assets. It doesn't change your net worth (other than tax deductions impact), but it does increase your "net worth excluding equity in primary residence" which seems to be sometimes used metric.

BlackGoldAg2011 said:

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Back on the topic of the survey, I think it would be fascinating to see this survey across all the boards with these results broken down to compare the trends by the board the respondent is most active on

Lookin at you politics and zoo

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Can you imagine the results from the general board? Considering how often the word "adulting" is thrown around I can imagine they would be much less impressive. Also way more trolling.

Bump per stock thread