SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Residential Real Estate Crash Index
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Elroy Jetson who wrote (6887)11/17/2002 2:11:26 PM
From: GraceZRead Replies (1) of 306849
 
For most Americans, the house represents the biggest asset and the biggest liability all wrapped up in one. If I'm trying to figure out whether or not someone has enough assets put away to retire in the future, I'd exclude the house. The idea is the familiar, "you always have to live somewhere" so you don't count the house as an investment. Doing so ignores the fact that many people do retire, sell their house, live somewhere cheaper and live off the proceeds of the house sale. For the purposes of retirement planning it's best if you exclude it, but for the net worth I always include it and so do most banks. When you do a net worth you are basically doing the same thing that a business does when they try to represent their financial condition in a balance sheet. If you really want to be thorough you can go a step further and run a worst case scenario, figure out what is the liquidation value of the assets after transaction costs. Perhaps you'd do this in an attempt to show how much life insurance is needed to protect dependents or an attempt to accurately split up assets in a divorce.

It is funny to have this discussion on a real estate thread primarily those professionals most likely to have a large negative net worth are in real estate in some aspect (Donald Trump is the obvious example here) just because of the leverage and use of OPM. You see a lot of fake millionaires in real estate living off the cash flow until in catches up with them or the market temporarily bails them out.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News