In this thread: people who do not understand the definition of “net worth”.
It’s assets minus debt.
Net worth is not higher without the debt. That’s gross worth.
Your net worth is not higher because of intangible assets that come from deliberate life choices. That’s your personal sense of worth.
You don’t need high net worth to be a socially worthy person, but social worth doesn’t directly contribute to your net worth.
I would like to see more people responding to this thread. I gives me a good metric to define the worth of the persons posts. If you bray about how smart you are, but can’t figure out how to make money, maybe you are not that smart.
If you are under 30 you have not had time to build wealth. Older dopers , did you not max out your 401k, pay off your mortgage in 15 years, save as much as possible, buy cars that are 3 years old and sell them at 10 years, pay your credit card balance every month, etc?
You may not want to know what I think of your smarts given your post above.
Just my opinion about your opinion.
No feel free to educate me.
By the way I am a college dropout. I am so dumb I didn’t understand why the farmhouse I bought had such long staircases. Took me a few years to figure out it was the ten foot tall rooms.
This is pretty much the manner in which my wife and I are now living very comfortably after retirement. (You didn’t add, not buy a second home/beach house/summer cabin, not buy a boat/RV/sports car, not take endless cruises/lengthy European vacations/travel to casinos, and suchlike.) But we stopped buying used cars. Partly because I don’t trust others to keep up their cars properly and partly because I want the latest safety equipment/electronics I can get.
Still, it took us a very long time to get to this point. We bought our first house in 1981 and that meant a mortgage over 20%. I’ve been out of work just in time for three separate recessions. My wife got hired as a temporary secretary in a boys-only industry and no matter how many times she got promoted after that, she never came close to her due in position or salary.
Lessons? Never take money for granted. Compound interest really does work over time. Splurge on the small stuff; scrimp on the big stuff.
You forgot stay away from drugs and gambling.
Sports cars are ok, I bought a1967 Camaro for $500 and sold it for $4000. Problem was $500 in 1985 is equal to $4000 in 2017. Good thing I didn’t have to pay for storage.
I did say not to “travel to casinos.” If you aren’t doing drugs and gambling there, I sure hope you like Piff the Magic Dragon.
I was in business for myself, the business was incorporated and I had an SEP IRA, where contributions came from my business. I didn’t set up all my retirement accounts properly as early as I should’ve (not until I was about 40) - but I made maximum contributions every year for twenty years. A few years ago my business started faltering and I started skipping the contributions, then I wound the business down and took early retirement.
I will add that I was stashing money in my savings account during my thirties and bought a 75K annuity outright at the time I fixed my retirement accounts. I had some sort of retirement account since I was 25 but it was only when I was older that I started managing it properly and contributing regularly
I own an apartment in New York. I inherited half of my mothers house in NC -which we owned outright and I share it with my brother. This keeps my housing cost low and gives me more disposable income.
I rent out my New York apartment. I don’t make much money, the rent is only a couple of hundred a month more than my mortgage and common charges.
I have a mortgage on it and I have no interest in ever paying it off.
I see this piece of property as an appreciating asset. During the time I owned it, it’s value has increased by more than the money I have paid for my mortgage and common charges. My plan is to hang onto it for another 5 years or so, and then sell it and pay off the loan. I know the real estate markets fluctuate but it’s not unreasonable for me to expect to net 500K if I sell in 5 years - and more if I wait longer.
I pay every credit card bill off every month in full and have no debt other than my mortgage.
My number one rule is never finance a depreciating asset. Except for one small car loan when I was just starting out, ( I put 50% down even then) I have never financed anything other than my apartment, I’ve bought my last several cars without financing.
I hang onto my cars for roughly 10 years. I bought 2 new and two pre-owned. Most recent was early this year, a 2018 Jeep on Carvana with 11,000 miles - about 35% less than I would’ve paid for a new one, plus it was easy and they bought it to my house.
So, that’s my summary.
Your comment about not wanting to pay off your mortgage is puzzling. Why not have zero debt?
I never want to pay interest. If I did not have the cash to purchase something, I didn’t buy it.
Car loans of 36 month maximum were an exception. If you can’t pay off your car in 3 years you need to buy less car.
If you own a rental property, there are tax advantages to having a mortgage on it that can exceed the cost of the mortgage. Especially now, with such cheap loans.
Ahh, I never had rental property. Cheap loans can be had, we got a 2 7/8% on our second home. Banks recognize that if you get into financial trouble you will just sell your second home, not default.
My last four car loans were for 6 years at around 2% interest. (I typically keep a given vehicle for 10-12 years.) That rate of interest is not much more than that of inflation.
I could pay a vehicle off faster with a higher payment, but prefer to keep my assets more liquid in case of emergency or rainy day.
I gave a general rule I followed. You thought it through and made a good decision.
When one of my employees came to me for direction I would ask them what they think they should do. I always let them do what they said if they showed they thought things through, even if it wasn’t what I would have done. I promoted a “self directed work team”. We all knew the goals.
My net worth is greater than that of Donald Trump. I’d love to get into the details right now and will do so soon, believe me. Soon, in the coming weeks. No one has seen anything like it.
So are you into equities, bonds, real estate, gold, or beanie babies?
When I was an entry level actuarial employee, I was one of several people with identical job who all, I assumed, earned about the same salary. I observed that some of us always had enough money, and some didn’t. A friend got regular calls from a bill collector, for instance. Others were always worried about cash.
We all lived similar lifestyles, lived in similar housing, and earned the same… I puzzled over what could be driving the difference. And eventually I made the connection:
Those who engaged in “recreational drinking” didn’t have enough money, and those who didn’t, did. By “recreational drinking” I mean people who went to bars regularly. Bars are expensive.
So my advice is to stay away from drugs – especially over-priced ones.
You know, intelligence aside, money isn’t a great way to measure someone. There’s lots of amazing people who are poor, or at least will never be rich. Anyhow, wouldn’t it be more interesting to judge posts by what they say instead of how rich their authors are?
Nevermind, I think you just meant in the context of this thread 
There are tax advantages to a mortgage, especially a young one. But the biggest reason is that paying off the mortgage takes money. My mortgage carries a fairly low interest rate. I can put extra money to better use by investing it in products with a higher rate of return.
I have never been anywhere close to underwater on my mortgage. Even though I refinanced recently, my equity is at about 60%.
During the time I’ve owned it, my apartment has increased in value annually by an amount about 25% greater than my annual mortgage payments. And that’s based on a back of the envelope calculation that presumes even appreciation over time. In reality, the market was stagnant for awhile, then values skyrocketed. During the past few years, the increase in value has been considerably more than my mortgage.
The other reason I’m not interested in paying it off is that it is an currently investment property, not my primary residence. I own my current primary residence outright so I have that security.
As I may have mentioned in my last post, I’m going to sell that investment property in 5-10 years with the hopes of clearing about 500K, which I will use to replenish my retirement account. If I sold it today I’d probably clear around 300K.
So you pay no taxes either? Smart!