house's value included in net worth?

[PauletteGoddard]

Yes. But how to calculate the value? What I do is take the difference of what I paid and what my County (to whom I pay real estate tax) appraised the land and buildings at when I purchased it, and apply that difference to what the County now appraises my property to be worth. I don't use Zillow.com or HouseValues.com.

I'm not sure I can gird myself for the eventual and slow (it is hoped) asset depreciation of the house as the credit bubble deflates.

[vsjhoc]

I actually had to prepare a personal net worth statement recently. What a pain. Anyway, for the value of the house (you better believe I count it as an asset!! ) ,I used the appraisal from my last refinance a year ago. I figured the bank's appraiser would take a fairly conservative approach.

[disneysteve]

Originally Posted by poundwise

The gentleman may have a point about how one ought to view one's own finances, however, in terms of what actually constitutes net worth (as well as according to generally accepted account principles) a house is an asset.

I guess that's the point I was trying to make. You home IS an asset, or at least your home equity is. Just because there are costs associated with owning a home doesn't mean it isn't an asset.

Now whether or not you should count your home in your financial planning is another question. When I do retirement planning, I do not count the value of our home as a financial asset because it isn't a liquid asset. We can't pay our bills with our house. I only count our invested assets.

[Broken Arrow]

Originally Posted by bjl584

Robert Kiyosaki is a hard man to argue against, as I believe that he is a self made billionaire. He must be doing something right.

Um....

Suffice to say, I do not think highly of Mr. Kiyosaki's "investment strategies". And I think that he's misleading people with his so-called "advice".

There are plenty of people out there that are just plain wrong, but still command a lot of money. Hitler is a classic example. All it takes is for enough people to believe in their thinking, enough to fork over their money. Cultism.

But please don't misunderstand me. I have nothing against you or in anyone's choice in whichever financial guru they wish to follow. However, that doesn't mean that I still agree with certain thinkings out there. Nor will I always stand idly by, saying nothing as these so-called thinkings propogate into "popular truths".

As the saying goes, "The only thing necessary for the triumph of evil is for good men to do nothing."

[vsjhoc]

Originally Posted by bjl584

Robert Kiyosaki is a hard man to argue against, as I believe that he is a self made billionaire. He must be doing something right.

Forget about his investment strategies --- he has sold a LOT of books (there are maybe six titles in the series). Hey, I'm writing a book. One day maybe I'll be rich and famous. And I'll say I couldn't have done it without savingadvice.com!!

[bjl584]

I've only read one of his books, so I really don't know all that much about him. I know that he's managed to make a lot of money, but I don't know anything about him as a person. He may be a ruthless tyrant that has stepped on countless people to get ahead. That wouldn't be cool. Not anything that I would look up to.

[Ima saver]

I agree, a house is definately an asset. I read his book, Rich Dad, and I did not agree with all he said!

[pyotr]

Here's the official decision:
YES, count your home equity and YES count your mortgage debt in your net worth.

Understand that the equity will rise and fall with your home valuation, but so does your stocks/funds. I've read the arguments on why you shouldn't include your home equity/debt in your net worth calculations but including it makes a lot more sense to me. OTOH, I tend not to include my personal belongings (computers,TVs,clothing, electronics, appliances, etc.) in net worth calculations because I haven't figured out a reliable way to value them. Same with a wedding ring you paid 7k for 15 years ago - what's it worth now? Who knows?

[pearlieq]

Originally Posted by pyotr

Here's the official decision:
YES, count your home equity and YES count your mortgage debt in your net worth.

Not that I don't agree, but official according to whom?

Just curious...

[pyotr]

according to the US government . Also according to prominent media like NBC and NPR's show marketplace among others. Most importantly, according to ME your overlord.

[sweeps]

Originally Posted by pyotr

Most importantly, according to ME your overlord.

Does a big ego count towards net worth?

[Bookie]

Originally Posted by Sweepsplayer

Does a big ego count towards net worth?

Ouch!

[pearlieq]

Originally Posted by pyotr

Most importantly, according to ME your overlord.

Well, as long as we've got that straight...

Thanks for the info!

[pyotr]

Sweepsplayer wrote

Does a big ego count towards net worth?

It could. And having a modest ego could go along with having no net worth and/or poor self esteem. Finding online personalities irritating could go along with spending too much time online rather than with your family also.

[piggybank4]

Yes, your equity counts toward your net worth, just as your mortgage counts as a liability.

But I wouldn't exactly re-appraise your home every year or something, and don't count the "bubble-inflated" value of your home -- or you might be in for a nasty surprise when the bubble bursts.