Net Worth
- Thread starter JIT
- Start date
lizzie,
This is the net worth thread, not the income thread. Income has nothing at all to do with your net worth. To calculate your net worth, just subtract your liabilities (loans) from your assets (properties, cash, super, shares etc). So, if you have a house worth $500K and owe the bank $350K then your net asset value of that asset is only $150K.
To put a business spin on it, income would be shown as revenue on your "Profit and Loss" statement, and net worth would be the bottom line on your "Balance Sheet".
Sorry if this is pretty obvious. Just thought I'd post for the benefit of others who may not be familiar with the concept.
Cheers,
Michael.
This is the net worth thread, not the income thread. Income has nothing at all to do with your net worth. To calculate your net worth, just subtract your liabilities (loans) from your assets (properties, cash, super, shares etc). So, if you have a house worth $500K and owe the bank $350K then your net asset value of that asset is only $150K.
To put a business spin on it, income would be shown as revenue on your "Profit and Loss" statement, and net worth would be the bottom line on your "Balance Sheet".
Sorry if this is pretty obvious. Just thought I'd post for the benefit of others who may not be familiar with the concept.
Cheers,
Michael.
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kissfan said:
I probably would include the PPOR because it is worth something, (although it is a liability in cash flow terms), and that equity can be harnessed.
Just my $0.02.
Is this more than average?
Hi, I'm 24 have I have a net worth of $60K. It includes 1 investment property (studio) + a large portfolio of shares.
Just curious is this good for someone my age? I have no idea because most of my friends invest.
This year is my 3rd year working and I'm on a $68K salary package which I guess is on the higher end for someone by age so I think it should probablybe taken into account.
Def. interested in any comments / feedback.
Hi, I'm 24 have I have a net worth of $60K. It includes 1 investment property (studio) + a large portfolio of shares.
Just curious is this good for someone my age? I have no idea because most of my friends invest.
This year is my 3rd year working and I'm on a $68K salary package which I guess is on the higher end for someone by age so I think it should probablybe taken into account.
Def. interested in any comments / feedback.
Yea but I was lucky my parents supported me throughout uni. Plus my parents are naturally frugal investing for the long term so I learnt a lot through them. What I have is largely due to good habits learnt from them and cirumstance rather than successful/smart investing.
I bet you are kicking my ass now thoughY Man.
I bet you are kicking my ass now thoughY Man.
Hey Sonic, Its not about how much money you make or whether the net wealth at your age is good. At 24, go out and enjoy yourself! At 24, I was on about the same salary as you but had zero investments. You're obviously on the right path already and truly understand whats required to create wealth (through this forum obviously!). Plus you have TIME and lots of it at your age. So go for that holiday and shout your mates that last round. Enjoy yourself as believe me, the older they get, the least likely they'll want to all go out and party.
sonic if you want a referance point I'm 26, working 4 yrs, 50k income and net worth is about the same as yours. was 3 ips now 2, no shares. Now have wife and 1.5 kids (ones still in the oven ) If we younguns invest well now I rekon we will be sittin pretty by our late 30s early 40's, which leaves a lot of self actualisation time! My parents pretty frugal too, I'm a social worker so I knew I would always need a money thing on the side. Not interested in struggling for 30 years. One thing I have noticed is its a whole lot harder to keep saving deposits and getting loans when you have 1 income for the fam. So if you are thinking of going down that road (and it is a good road) any time soon, leverage up and look after your cashflows carefully to avoid stress then. I am impatient - so I'm trying to borrow and do deals when our income isn't really offering any support to the re investment side of things. Otherwise just keep doing whatever got you this far and with time on your side you will do well.
knightm
) If we younguns invest well now I rekon we will be sittin pretty by our late 30s early 40's, which leaves a lot of self actualisation time! My parents pretty frugal too, I'm a social worker so I knew I would always need a money thing on the side. Not interested in struggling for 30 years. One thing I have noticed is its a whole lot harder to keep saving deposits and getting loans when you have 1 income for the fam. So if you are thinking of going down that road (and it is a good road) any time soon, leverage up and look after your cashflows carefully to avoid stress then. I am impatient - so I'm trying to borrow and do deals when our income isn't really offering any support to the re investment side of things. Otherwise just keep doing whatever got you this far and with time on your side you will do well.knightm
Yes, perhaps a million dollars has lost its shine now...With this poll, I think if people are including their PPOR in their NET WORTH figure then it would be a bit easier to get to the million dollar mark, particularly in Sydney and Melbourne post-boom, given what house values have become.
GSJ
GSJ
I agree that for us investors, knowing the value of money, being a "millionaire" is not that impressive. BUT, for the average man on the street being a "millionaire" is still something of an immense achievement.Monopoly said:The word "millionaire" does not hold the same eminence of yesteryear. IMO, these days a million dollars isn't anywhere near as impressive, unless of course, you are talking in multiples of 5.
so very true - which is why i'm not overly impressed when people ooo and ahh at those who have a mil net worth. i also wish api mag would put in net worth instead of total value of properties - sometimes the features might have over a mil value in properties, but that means their net worth could only be $200k. still inspriational reading but fogs the truth.GSJ said:
if we take out our ppor our net worth is around $500k - still nowhere near enough to even consider retiring as, if invested at current interest rate returns, that equates to income of only around $10k/year. our entire portfolio is cashflow neutral (some poss some neg) so that also rules out living off the rent for a few years yet.
when i've got a net worth of around $5mil, then i'll think about slowing down.
