Are you not counting your house as an asset when calculating net worth?
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June@lemm.ee 8 months agoI’m at least 30 years from $0 lol.
It’s funny how my net worth was higher when I was renting than it is now that I’m a homeowner that bought 18 months ago.
Asifall@lemmy.world 8 months ago
June@lemm.ee 8 months ago
I’m underwater right now since interest rates jumped right after I bought. So no.
PM_ME_FEET_PICS@sh.itjust.works 8 months ago
You went with a variable rate? Are you insane? At least rates will drop in the next 3 years.
June@lemm.ee 8 months ago
Nooooo. I’m locked in.
It’s that interest rates went up and prices fell as a result. My area just leveled off and hasn’t grown since I bought.
Asifall@lemmy.world 8 months ago
Why would you expect that to take 30 years to get back to $0 though?
DragonTypeWyvern@literature.cafe 8 months ago
Net worth literally means assets minus liabilities.
If you have a mortgage that isn’t at least 50% paid off you probably have a negative net worth, while a renter without other debts will have a positive worth.
The accumulation of equity compared to the complete loss of value to renting is a different discussion.
This discrepancy, btw, is why people accuse Trump of being a fake billionaire, because his liabilities exceed his assets, thus his begging for cash from the gullibles.
Jmdatcs@lemmy.world 8 months ago
TF you taking about? You use the whole price of the asset for net worth. If your mortgage is $1 less than what you would get from selling it that’s +$1 to your net worth.
If you’re house sells for 500k after expenses and you owe 300k you don’t just get the 200k and still owe 300k.
My house is worth ~1.8mm and I owe ~140k, that’s +1.66mm to my net worth. Even if I owed 1mm, I’d have +800k.
Unless the house is worth less than you owe, having a mortgage on your house isn’t a negative to your net worth.
DragonTypeWyvern@literature.cafe 8 months ago
They have a new mortgage. They haven’t built up equity yet, plus who knows what their damage is on other loans.
This isn’t complicated. Their asset (the home) atm is still roughly equal to their liability (the mortgage).
I’m sure they’ll be out of a negative net worth before they think but we also don’t know what their damage is on interest rates, student loans, car loans, medical debt, etc.
Rodeo@lemmy.ca 8 months ago
Yeah but now you have a concrete asset on which you’re gaining equity.
Before you were getting nothing for all that money you spent on rent. Now you’re getting equity for it.
June@lemm.ee 8 months ago
I know this will likely change as time goes on, but so far I’ve lost value and I’m under water by about 10% according to what I can suss out of the market value. And, my mortgage is 2.5x what I could be paying in rent most anywhere else in the region, which is its own stressor yannow. Everything is just a bit wonky right now.
Agent641@lemmy.world 8 months ago
I have no debts, 10k in savings, and I live in a van 🙃
June@lemm.ee 8 months ago
You have a higher net worth than most millionaires!
Smokeydope@lemmy.world 8 months ago
If you aren’t joking then unironically congrats on your relative financial success!