Property 'wealth'

ognum

I have heard someone described as seriously wealthy when in fact they have property that is heavily mortgaged.

What is wealth now? Shouldn't your worth be your assets minus your debts.

I have also seen people include their pension pot in their wealth, this can't be so either can it as it is not accessible.

I am now seriously confused as to what a multimillionaire is, is it someone with that sum in assets despite their debts?

dawyldthing

I bet its people in big houses and big cars. Always makes me smile as the cars probably on finance, house is mortgaged to the hilts, all to keep up with the Jones! A bit silly really though, as then if they don't live within their means then it means there a bit stuck.

And nope i'm not bitter, just a realist

G_M

Depends who is doing the evaluating/catagorisation surely?

A 'wealthy' person may be someone who has a particular lifestyle (which others may aspire to): big posh house, flashy car, multiple expensive holidays; etc etc - this may not take into account their mortgages, household.business debts etc. They are 'living the good life' irrespective.

HMRC may have a totally different view - depending whether the income is 'personal' or 'business' and what allowances can be offset aginst the income.

The Sunday Times rich list may be totally different again.

Without know who is asking the question, and why, it is a meaningless question.

(and for most purposes a pension is surely relevant - it is future guaranteed income - someone who has one is demonstrable better off/more financially secure than someone without).

FATBALLZ

ognum wrote: »

I have heard someone described as seriously wealthy when in fact they have property that is heavily mortgaged.

What is wealth now? Shouldn't your worth be your assets minus your debts.

I have also seen people include their pension pot in their wealth, this can't be so either can it as it is not accessible.

I am now seriously confused as to what a multimillionaire is, is it someone with that sum in assets despite their debts?

I agree wealth is based on assets minus debts. A pension fund is an asset, you just defer consumption of it.

Strapped

I'd say your net assets, based on the "acid test" ie if you liquidated everything today.

googler

I've seen one method which sets your assets against liabilities.

assets put money in your pocket, liabilities take money away.

your own house on a mortgage is therfore a liability. A house which you rent out is an asset

As long as your assets are putting more money in than the liabilities are taking away....

jamie11

googler wrote: »

As long as your assets are putting more money in than the liabilities are taking away....

You sound like Mr Micawber.

girl_withno_name

googler wrote: »

your own house on a mortgage is therfore a liability. A house which you rent out is an asset

How would you categorise a house that is neither on a mortgage or providing rental income?

For me - this would be a (non-current) asset...

Itismehonest

It's all a bit hypothetical when it comes to house values, surely?
Nobody really knows a property's worth until it sells & then it becomes someone else's asset.

googler

jamie11 wrote: »

You sound like Mr Micawber.

Or Mr Kiyosaki ...

googler

girl_withno_name wrote: »

How would you categorise a house that is neither on a mortgage or providing rental income?

For me - this would be a (non-current) asset...

Don't know that I have a category for it - I'm quoting someone else's methodology here, not my own.....

I suppose 'potential asset' would sum it up for me....