Wednesday, May 19, 2010

Net Worth Obession Question Part 1

Michele said...

i read the preview article and was wondering - how do you calculate your net worth if you are underwater in your mortgage? do you put your house as an asset at what you paid or what it is worth on i am not worried about losing it (yet) since i am employed and have an emergency fund.

I guess it depends on whether you think the value is accurate or not. You can track your net worth however you like and you know the back up for your numbers. As I explained to Ron Lieber, much of our net worth is illusory. We won't know the value of our real estate or stock investments until we sell them.

So this is what we do. The net worth numbers for our primary home and real estate investments are the values assigned by the local property appraiser.

Anonymous said...

I find your $100/month extra mortgage payment hard to understand. With a large mortgage and significant dollars going to other categories, I would have expected the extra mortgage payment to be either zero (especially with your low interest rate) or hundreds each month. Can you share how you settled on an average of $100/month extra payment?

Yeah, I hear you. We would really like to pay off the mortgage on our primary home. But right now our goal is to prioritize our non real estate investments because we are over invested in real estate. So, we decided to add prepaying our mortgage to our 2010 goals, while the amount of $100 is somewhat symbolic it keeps this goal on our radar screen.

1 comment:

Anonymous said...

I like paying a round number for mortgage every month. Completely irrational, but I like writing 2000 on the check more than I like writing 1710.96 or (since our property taxes just went up) 1744.34. We may start doing 2500 if the stock market keeps being so volatile as we're locked at 5.5%.