Household Wealth Increases By £165,000

DaddyBear

Exocet wrote: »

Here's how I calculate my household 'wealth'. Simple spreadsheet - mortgage, credit cards, loans on on side - cash, savings, shares on the other. The perceived value of the house does not come into it. Object of the exercise - to keep head above water.

That is entirely my point, which some on here don't seem to get. On a day-to-day basis the value of your house is completely irrelevant.

"Honey, the boiler is broken. We don't have any cash in the bank and it's going to cost £1,000. Do you think we should sell our shares or take out a loan?"

"I've got a better idea. Let's sell the house"

"But where will we live"

"It doesn't matter, we'll be rich and can pay for 1,000 boilers"

chucky

DaddyBear wrote: »

That is entirely my point, which some on here don't seem to get. On a day-to-day basis the value of your house is completely irrelevant.

"Honey, the boiler is broken. We don't have any cash in the bank and it's going to cost £1,000. Do you think we should sell our shares or take out a loan?"

"I've got a better idea. Let's sell the house"

"But where will we live"

"It doesn't matter, we'll be rich and can pay for 1,000 boilers"

sort of agree with the logic but if you had a property that had increased £200k in value it would mean that you had an extra £200k to borrow. having this 'security' allows you to borrow more for these emergencies.

debt can be wealth