re: Crossed the 100K net worth barrier over the weekend

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Vols&Shaft83

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. Just how simple is your thought process? I think you're setting a record.

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OTIS2

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Can you form an argument with some substance, or are you just here to heckle like a little bitch?

We are misunderstanding each other, but I don't have the time or the inclination to get into this beyond what I have already suggested.

There's nothing wrong with ignorance. I'm ignorant about a lot of things myself. But when everyone else is disagreeing with you, it is usually a good time to step back, examine your position, closely examine the opposing position, and make an objective, ego-free call on the best position. Then you graciously acknowledge that your position was flawed but you now see the correct position.

Kiosaki's target market is not necessarily people with strong business fundamentals, and he communicates accordingly to his key audience. He has some good points, but don't mistake his lingo for proper business terminology.

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Kiosaki's target market is not necessarily people with strong business fundamentals, and he communicates accordingly to his key audience. He has some good points, but don't mistake his lingo for proper business terminology.

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I didn't. I suppose me using the term "asset" is incorrect in proper business terminology, so if that's where the confusion is coming from, than I apologize.

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No. It is a negative ROI asset.

Again, an asset is anything you control. The term "asset" does not imply positive cash flow. There is nothing particularly unusual about an asset where expenses > income.

A liability is a claim someone else has on your assets. It also may or may not have any negative cash flow.

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Ok, I can see where we got our wires crossed here. I was over simplifying the terms "asset" and "liability". I consider anything that has a negative ROI to be a liability, I understand that's not the proper business terminology.

Yeah. I think everyone gets the gist of what you are saying.

The fact that you were so vehemently defending your specific definitions was causing the disagreements. More than most boards, this board seems to want to keep things straight.

Keep posting. You bring some contrarian points that keep the discussions lively.

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People do ask for serious financial advice here sometimes so I try to be as correct as I know how.

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When it's serious, I try to as well.

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That said, on the OT I will ask for pics of the wife and whether you PIIHB.

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Hell, I'll do that here too

I found this rather interesting. A home is obviously an asset but the discussion is entertaining.

If a 35 year old couple has 200k in equity in their home, 100k in 401k, 25k in savings, and 50k in college savings for kids. They have no outstanding debt except for another 200k balance on the mortgage. What is the net worth?

I think you will find it hard to find anyone who wouldn't consider their net worth 375k.

Am I wrong?

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If a 35 year old couple has 200k in equity in their home, 100k in 401k, 25k in savings, and 50k in college savings for kids. They have no outstanding debt except for another 200k balance on the mortgage. What is the net worth?

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I'd say the net worth is $175K (maybe only $125K if the only way to get to the college money is to pay for the kids' college without incurring severe penalties-that money is already dedicated to the kids and not the parents). If they sell the house for $200K, the mortgage is paid off and they just didn't pay rent when they lived there.

My opinion on house ownership is that it can be an asset if you buy cheaply enough and it has good chances to appreciate. Also the cheaper one buys a house without alot of bells and whistles, the more easily one can recoup their cash or get a gain if he bought on the cheap. A house could be a liability if the buyer overpaid, has more expensive insurance and taxes, and constantly updates cabinets, countertops, etc. without getting a good return on the prior "improvements." I feel like alot of people update amenities every 3-4 years and don't get a good "return" on their prior amenity upgrades. Also the more expensive house you buy (or personalized upgrades you add to it after buying), fewer people in the general population will be able to buy it at the current owner's break even or at a profit. The target sales audience becomes smaller and more likely wants their own personalized amenities in the house.

I think the biggest factor for a couple is to decide ahead of time whether their approach is to get a good value play on the relative cheap or do they want a bigger house to entertain or for the kids to romp in. Are we buying a house as an investment, a fun expnese that we like, or somewhere inbetween? I can see some situations where a house could be a liability (see forclosures during the credit bubble) vs. an asset (buying foreclosures on the cheap to rent at a positive cash flow).

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Care to elaborate?

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One has to live somewhere.

Once you get older and the house is payed off, that is when one saves big bucks.

For me, I builted my house 12 years ago doing 90% of the work. 2700/3900 under roof. Built it for under 67k. Payed off in 7 years. Very little up keep. If I were to put it up forsale, I could easy get over 300K.