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106

Real estate can be rented out (or otherwise "used"), so it "produces" income. He's not solely investing in real estate in the hopes the value increases, he's saying it's a better investment because it produces income whether or not the value increases.


96

Is a house an asset? Assets are simply owned property with value. My computer is an asset, my car is an asset, my house is definitely an asset. People who say houses aren't assets are trying to sell a different definition of asset, for example, this Rich Dad character says: "The simple definition of an asset is something that puts money in your pocket." ...


70

Also the will stipulated that the house cannot be sold as long as one of my wife's aunts (not the same one who supposedly took the file cabinet) is alive. This is a turkey of a provision, particularly if she is not living in the house. It essentially renders the house, which is mortgaged, valueless. You'd have to put money into it to maintain the mortgage ...


22

The future earnings from the house are only relevant in as much as it affects what other people might be willing to pay to buy it. If you tried to account for them as well as the current value of the house, you'd be double-counting them, as someone who bought the house would implicitly also be paying for the right to receive those future earnings (or the ...


21

Curious, are you asking about average, or the good numbers? The median family doesn't have $2500 to address an emergency. We are a nation of debtors, and spenders. A young couple at .8 is doing well. It means they saved 20% for a down payment, and just bought a house. Not too tough to buy with 5% down, have no other savings, and a student loan to put the ...


19

We're looking at transferring her interest in the property to me, for the purpose of cleaning up her assets so she can qualify for Medicaid. You may not be able to do that do that - there are rules regarding the transfer of assets before qualifying for Medicaid. If this is an investment property then her equity would be considered an asset. Transferring ...


14

California bankruptcy law requires disclosure of any gift made by the person declaring bankruptcy in the past 12 months, and any asset transfers in the past 2 years (with a couple of minor exceptions). This would most certainly include the car, if it is regifted back to you. Such a claim would likely be considered fraudulent, though this would be a matter ...


12

Gold is a commodity. If I have some gold, my gold is exactly the same as someone else’s gold. I have absolutely no control over the value, and when I go to sell it, my price is completely dependent on what everyone else in the market is doing. I compete with every other seller on price alone; there is no other way to differentiate my product. For real ...


12

When most people buy their first house, they don't have the full purchase price (plus all the other costs associated with the purchase) available in "cash". Most people have to take out a mortgage for their first house, and it's usually most of the value of the house (sometimes 90% or more). That mortgage is an expense; at the start of a (for example) 30 ...


12

TL;DR: a house is an asset but not really an investment. There is an argument that houses are assets, so no amount of money spent on a house is ever wasted. After all, you can always sell the asset. I describe this as an argument, because I think it is deeply flawed. Consider: The market may crash, and you can't get the original purchase price of ...


11

You are not asking for insurance purposes. So I'll go with this - I have two asset numbers I track. All investments, retirement accounts, etc, the kind that are valued at day's end by the market, etc. From that number I subtract the mortgage. This produces the number that I can say is my net worth with a paid in full house. The second number simply adds ...


11

Re: "Real estate usually goes up in value" ... yes, the land, primarily. There's a difference between a building, and the land it is built on. A building won't last forever. Since it doesn't last forever, at some point it will need to be replaced. Depreciation is the accounting & taxation way of recognizing the decreasing value of the asset — ...


11

This depends on your definitions of assets and liabilities. The word "asset" has a fairly straight forward definition. Generally speaking, an asset in finance is something that you own/control that has economic value. The asset has value because it is generating income for you or because you expect that it will be worth something to someone in the future. ...


10

What is your biggest wealth building tool? Income. If you "nerf" your income with payments to banks, cable, credit card debt, car payments, and lattes then you are naturally handicapping your wealth building. It is sort of like trying to drive home a nail holding a hammer right underneath the head. Normal is broke, don't be normal. Normal obtains ...


9

You haven't mentioned how much debt your example company has. Rarely does a company not carry any kind of debt (credit facilities, outstanding bonds or debentures, accounts payable, etc.) Might it owe, for instance, $1B in outstanding loans or bonds? Looking at debt too is critically important if you want to conduct the kind of analysis you're talking about....


9

It's an asset if you can sell it or if it provides cash flow. For example, if you own a house, the house is an asset, even if you have a mortgage, because you can sell it. If you rent your home from someone else, it's not an asset, because you don't own it and can't sell it. Stocks, cars that you own (not lease), cash, checking and savings accounts, precious ...


9

Average person's life I'm going to say there is no normal debt level. Here's the standard life pattern: When someone finishes their studies in university, and are therefore highly educated, they'll have student debt with low assets, so they'll probably be in debt (negative equity, if you will). At least that's the case in Australia, where student debt is ...


9

Accounts track value: at any given time, a given account will have a given value. The type of account indicates what the value represents. Roughly: An asset is something you control that's worth something, and the value is how much it's worth. A liability is something you owe someone else, and the value is how much you owe them. Equity is your net worth: ...


9

Ask your accountant for a profit and loss statement for the current year. What you're showing us is is a balance sheet. You can't infer taxes from a balance sheet but you can from a profit and loss statement.


8

You're supposed to be filling form 433-A. Vehicles are on line 18. You will fill there the current fair value of the car and the current balance on the loans. The last column is "equity", which in your case will indeed be a negative number. The "value" is what the car is worth. The "equity" is what the car is worth to you. IRS uses the "equity" value to ...


8

Most states have a "cap" on the amount a "heir finder" can charge for retrieving the property. It is generally around 10%. Even if the state does not have a particular statute you can usually negotiate the rate with the company. Thirty-percent is extortion, if they won't do it for less, someone else will.


8

I'm guessing PA means the Commonwealth of Pennsylvania. In the US, it may so be that your classic automobile is considered a collectible. Long term gain on sale of collectibles is taxed at the maximum 28% rate (see here for the IRS tax topic on this). This is regardless of your AGI. The 0% long term capital gain rate doesn't apply to collectibles. The ...


8

The problem with having no debt at all and relying totally on your income from working is that if you lose your job you'll have no income. Now there are 2 types of debt: good debt and bad debt. You should stay away from bad debt. But good debt is good — it should produce an income higher than the interest payments on the debt. Good debt will help you ...


8

It's debatable whether home equity belongs in one's net worth depending on what your goal is. If the goal is to figure out how much you are leaving the kids when you die, of course the house counts. If you are calculating your nest egg and are determined to rent an apartment in the city, and will sell the house, again, it counts. But, in my opinion, it's a ...


8

Warren Buffet isn't using any special sauce. He looks for value and ignores hype, greed, and fear. He buys what he knows and looks for companies that generate cash and/or are available for a discount of their true value. He explains what he looks for in a company and his reasons for buying it. He has said on numerous occasions, "I look for intrinsic value." ...


7

It's true that most states have limits on what finders can charge if the listing is in state possession. If it is in the pre-escheat phase (that period of time before it goes to the state) then even if the money will eventually go to the state, the limits don't apply. Keane does a lot of work with transfer agents that handle the administrative work of stocks....


7

The first step is to talk to your heirs and fund out if they even want the large asset. If they don't want the asset, then it would be far better to leave instructions in your will for the asset to be sold and then the proceeds distributed. If only one heir wants the asset, then adjust their inheritance to offset leaving them the entire property. If ...


7

Assuming that all debts were paid, [...] As an owner of the company, would I be able to keep the devices as my own property? What could happen to me if I kept them for myself? spain When the company is terminated and assets are enough to pay debts, remaining assets are distributed among shareholders according their share quotas. If new debt arises after ...


6

Disclaimer: If I recall correctly. Dr Stanley removed the calculation of net worth in the book Stop Acting Rich. In the book, the Millionaire Next Door, the home was included in the net worth calculation. Stop Acting Rich was published in 2009 and has some language dealing with the people that had a majority of their wealth calculated into inflated ...


6

Is there a word for that $20k owed? Trade Receivables, Accounts Receivables, or just Receivables Is there a different word for that $30k "hypothetical" total? Current Assets (Includes Inventory and other short term assets)


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