What is your Gross Worth?

[Somerville]

OK, could you please explain why? You are implying that one should never use debt to purchase property. We were pointing out that debt enables gross worth to increase and this is a way of increasing nett worth as assets increase in value and debt reduces etc.

Do you use debt to purchase property?

 

[redwing]

What are you worth ?? did'nt your mama tell you thats a rude question to ask!
and don't talk about money as it's not to be mentioned??

what the hell !about 1.5 ish??

Its funny how different nationalities have different attitudes to this

 

[eternit]

I believe you are both dangerously wrong.

why is that?

 

[jingo]

why is that?

I am awaiting Sunfish's reply to this too, but I would say that it is possible to increase one's networth without using debt to acquire gross assets. (property, shares, etc).

The methods I can think of are:

1) Start a business using one's existing capital without loans.
2) Savings from your paye job.
3) Term Deposits
4) Share trading and associated products (Bonds, managed funds,commodities, valuables - art, musical instruments etc)
5) Investing in shares reinvesting the dividends.
6) Propery trading without the use of loans. (Renovate, flip sell, develop etc)
7) Buying property in cash and saving for further property.
8) Upgrading one's PPOR and moving to more affluent suburbs in small steps without loans.

There will be heaps of others.

Over to you Sunfish......

 

[Piston Broke]

Maybe we should we just continue the thread now that all matters are settled.

You must be new at this investing "thing"?
What I'm pointing out is that there asking someone's gross worth in their own opinion, gives just that an opinion.

 

[investor888]

Actually, add another $4million to my "gross" wealth guys.

Seems like you guys want to value 95% LVR properties into your "gross" wealth calculation, with only possible future potential net wealth from this.

I forgot to factor in myself as a net wealth generator. Hey, like property, I can generate income (including passive income), expenses, future growth (business ideas, etc). Yeah, so in my option this takes my "gross" wealth to over $8+ million.

So I'm taking out a 95% LVR on myself (I'm generous and only saying 200K equity currently). In 10yrs time, my LVR on myself should maybe be down to 50% (from income, etc). This should bring the equity (and Nett wealth ) on myself alone up to about $2million.

I stuck that into your calculator JIT, and it turns out that the compounding interest on myself then is 26%. Wow.

I'm adding to the Somersoft religion here, haha. Don't just think about the properties, but be the property. Value yourself in the same way your value your investments.

Tell you what, I feel even richer again instantly. This Gross wealth thing is brilliant guys. Sash, your chart does not go high enough. )

 

[The Fence]

888...you promised your last post earlier...now bugger off and honour your promise....just a bloody nuisance with your smart alec remarks...very very immature little childish attitude...really....

 

[Piston Broke]

So I'm taking out a 95% LVR on myself (I'm generous and only saying 200K equity currently). In 10yrs time, my LVR on myself should maybe be down to 50% (from income, etc). This should bring the equity (and Nett wealth ) on myself alone up to about $2million.

Tell you what, I feel even richer again instantly. This Gross wealth thing is brilliant guys. Sash, your chart does not go high enough. )

Awesome idea!!!!!!
But I'm a bit fuddy duddy and get anxious with 95% LVR, but given that this seems the SS standard I'll take the equity of one IP and add another >$7,000,000 Gross Worth.
OK I'll value my biz equity really badly and add $3,000,000
PPOR equity at 95% would add >$5,000,000

I too now feel much wealthier than 15 minutes ago!
I made $15,000,000SS in 15 minutes!
I'm off to smoke a cigar lit with a $100 bill and celebrate with some cheap vintage grange!

 

[wylie]

Awesome idea!!!!!!
But I'm a bit fuddy duddy and get anxious with 95% LVR, but given that this seems the SS standard I'll take the equity of one IP and add another >$7,000,000 Gross Worth.

I would be very surprised if 95% LVR was the SS standard.

 

[Piston Broke]

I would be very surprised if 95% LVR was the SS standard.

Oh bugger! Now I have to use $50 bills...

Even though many who buy using x-equity borrow at 95% + costs according to their posts here.
Of course I did'nt include costs or stamp duty, so I'm really under-estimating as per usual.

 

[investor888]

888...you promised your last post earlier...now bugger off and honour your promise....just a bloody nuisance with your smart alec remarks...very very immature little childish attitude...really....

Yeah, final post.

Thorpey. In the business world they call this Goodwill on the balance sheets. Here I use good will in the original meaning
Goodwill as a term was originally used to reflect the fact that an ongoing business had some "intrinsic value" beyond its assets.
So why not at the personal level to increase your "gross" wealth.

But really. You value property at 95% LVR, for future Nett wealth. Maybe if more people thought of themselves as an "investment" it would be better, with less people just waiting for government handouts.
What is the ROI on myself. How can I increase the value in myself (do a course to increase income, etc).

Why it is so silly Thorpey. Food for thought.

QED. Signing off. Really, this time.

 

[wylie]

Even though many who buy using x-equity borrow at 95% + costs according to their posts here.

And I would say just as many, or more than those, are the ones with much, much lower LVR. Don't you read those posts?

 

[steveadl]

Awesome idea!!!!!!
But I'm a bit fuddy duddy and get anxious with 95% LVR, but given that this seems the SS standard I'll take the equity of one IP and add another >$7,000,000 Gross Worth.
OK I'll value my biz equity really badly and add $3,000,000
PPOR equity at 95% would add >$5,000,000

I too now feel much wealthier than 15 minutes ago!
I made $15,000,000SS in 15 minutes!
I'm off to smoke a cigar lit with a $100 bill and celebrate with some cheap vintage grange!

Bit surprised with that pathetic, childish response PB. From investor888 (& his previous user names) I've come to expect it, but thought you were better than that.

why do you assume SSers are overestimating their asset values? Poll was pretty straight forward about total gross property worth, which is fairly easy to ascertain within a decent range with about 30 mins of research on current market rates.

 

[wylie]

I always under-estimate values when I am doing balance sheets and the like.

Saves us from any nasty surprises.

And I also thought it was a childish response.

 

[Piston Broke]

steveadl I think 888 made a valid point.
If you have an IP you bought for $1,000,000 with $100,000 deposit you would likely consider your gross value is $1,000,000.
If i have $100,000 cash and apply the same ratio, then my gross wealth is also $1,000,000 as I too could by that a 1Mil IP any time I want.

In practice you paid fees, stamp duty and will incure fees when you sell, and of course holding costs.
So I could argue that my cash "gross wealth" position is better than yours at that given time.

As for values, go back 5-6 years and look at SSers (and dubious "experts") growth estimates, they obviously had no idea for avg houses were supposed to have almost doubled since. And dollar cost averaging share trading would've brought never ending returns just as selling covered calls & puts.
So I think many people here cant really ascertain value.
And yeah, "gross worth" is also fudgy malleable term.

 

[wylie]

Our IPs have doubled in the past 5 or 6 years. Sometimes we do get it right .

I think the argument that if you have $100K you can "say" you have $1M is silly.

The other thing I always do is estimate our values on the low side, to avoid any problems, and always value them at what we would put in the bank after selling fees and costs are paid. This is when I am testing different scenarios, so we never get any nasty surprises.

 

[JIT]

steveadl I think 888 made a valid point.
If you have an IP you bought for $1,000,000 with $100,000 deposit you would likely consider your gross value is $1,000,000.
If i have $100,000 cash and apply the same ratio, then my gross wealth is also $1,000,000 as I too could by that a 1Mil IP any time I want.

In practice you paid fees, stamp duty and will incure fees when you sell, and of course holding costs.
So I could argue that my cash "gross wealth" position is better than yours at that given time.

As for values, go back 5-6 years and look at SSers (and dubious "experts") growth estimates, they obviously had no idea for avg houses were supposed to have almost doubled since. And dollar cost averaging share trading would've brought never ending returns just as selling covered calls & puts.
So I think many people here cant really ascertain value.
And yeah, "gross worth" is also fudgy malleable term.

With all due respect PB, I think that's just a load of esoteric crap!

If all you have is $100k cash sitting in a bank account, then your gross worth is $100k, simple as that.

In your example, you could have bought a $1MM IP... but you didn't/haven't!

Not everyone can either, ie. you stil need to somehow service 900k debt.

If you wait 3 months, that same IP may be worth $1.1MM and you may not be able to afford it anymore.

The poll asked for gross worth (in property), and it is what it is, an estimate of your gross property assets today.

Not that complicated!!!

The relevance of it is of course debatable, but this is no morgan poll.

I think you're getting carried away with 888's nonsense.

 

[sash]

So I put a few things to rest....and the bantering around networth and gross worth..I did the gross worth survey for one reason...

1. Gross worth is one key indicator of future networth...simplistically the larger your portfolio the more growth you get. But there things that could get in the way - i.e. if you happened to own properties in areas that are declining (i.e. some mining towns) or just simply unlucky

2. Networth is important....but measures the present.

3. I did this survey for fun....so I do not know what the hoo...haa is all about.

4. For the record...I had an LVR under 25% at the start of this year.....now it is about 33% LVR. Nothing remain constant ...things change....markets change...and stategies of yesterday year can change. The smart ones move with the times..

5. I have been investing for 10 years...if people think the market is going to come backwards in the next 18 months...it is unlikely. Maybee in Perth but Melbourne and Sydney are in the midst of classic upturn...note the work upturn..not boom...because this is a few years away.

Hope this helps....

 

[Alex P Keaton]

Why it is so silly Thorpey. Food for thought.

QED. Signing off. Really, this time.

stick around!! i like to hear different viewpoints. Makes you think and it brings about some good debates. This is a discussion forum afterall

 

[Alex P Keaton]

From investor888 (& his previous user names)

lol really, haha, what are the other names