What Are You Worth?

gadgetmind

Doshwaster wrote: »

You can be sure that if you were ever in financial trouble and with a big bill to pay a court would certainly count your property as one of your "assets".

True enough, and I do mentally count it as an asset, but it's very different to our cash and investments as the latter are for retirement income.

racing_blue

Pension 54%
net property 34%
Financial 11%
Physical 1%

That's the simple analysis. However I look beyond this to a more complex answer, which has to do with the services, resources and products that our wealth can command. This is tricky. In December 2011, for example, our net wealth in terms of the IMF commodities index was almost exactly the same as in December 2001- despite a decade of hard graft and a large increase in nominal wealth. So if our purpose in accumulating wealth was to achieve a greater share of the world's resources (what a terrible thought) we would have done pretty badly.

On the other hand, in this decade our wealth in terms of average UK houses increased x2.5; in terms of the UK median full time wage x3; in terms of the FTSE 100 index by x4 (my conclusion: if we wanted to get richer in global terms, we chose to live in the wrong country)

There is another (simpler? better?) answer, which has to do with wealth or income as a proportion of GDP. I haven't done these calculations but this would probably give the best indication of what sort of economic clout we had achieved. This draws heavily on https://www.measuringworth.com . Check out the essay about the relative worth of the Empire States Building, an accountant's salary, and a loaf of bread.

sabretoothtigger

I dont see anyone who has written rent as a percentage cost or any cost. It probably is 'cleaner' not to include housing which if rates goto 10% would not be an earner.
If you remember people were 'earning' more from their house worth going up then their jobs but that turned out false longer term.

Housing asset value could be included if somehow it was referenced against the wages liable to be forfeit paying off the debt, that would put many people overall into a negative percentage savings no doubt so hardly an asset.
If its owned outright then ignoring the rent payable after its sale, is close enough to realistic I guess as rent is usually many years less of a liability but mortgage for most is no small thing

Technology shares - 16%

I bought some tech today, probably not my best timed purchase but I dont see it as expensive vs potential profits.
16% is alot, so many got fingers burnt I think its still underweighted by most

somethingcorporate

chucknorris wrote: »

There is nothing 'tricky' about it at all, of course it is an asset! It doesn't produce an income but:

1. It can produce an income if you decide to downsize (or even move in with a partner if circumstances allow) and rent it out or sell it and invest the money.

2. If you don't own outright you either have to pay rent or a mortgage, saving on outgoings can be just as important as income.

1. But if you don't want to have to use it to produce an income then it's fine to disregard it as an asset since it does not produce any income.

My property is not forming part of my retirement planning since I plan to live in it - the only thing it does mean is that I do not have to include rent liability in my planned outgoings.

From an accounting point of view of course property is an asset but when it comes to retirement planning I think it's fine to exclude.

downsizer3

I'll play.

ISA - £5k - 1.42%
Property - £297K - 84% 7% mortgage left.
Savings - £5K - 1.42%
Pension £45K - 13.16%

Pension will get all my attention from now on - I'm 46.

gadgetmind

sabretoothtigger wrote: »

I bought some tech today, probably not my best timed purchase but I dont see it as expensive vs potential profits.
16% is alot, so many got fingers burnt I think its still underweighted by most

A tech fund, IT or individual shares?

Regards my 16%, yes that's rather high, but I am reducing as fast as I can. Some changes to CGT that are in the pipeline might make this easier.

greenface

properties £215k (house & holiday home)
Assets £47k (van,car,static & a few bits)
Isa £34k (S&S + Cash)
Shares £320k
Savings in bank £8k
Mortgage & debts £0
Income £35k (Mrs 13k Me 17k & 5k from holiday let)
outgoings £about £1.3k
Wife x 1, Kids x 3, dog x 1
Mid 40s

Harry_Boyle

Age: 42
Salary: £69k
House worth: £475k at a guess (£243k outstanding mortgage)
Savings: £21k
Pension: £170k

Linton

Mr & Mrs Linton - retired, age early 60's (average!)

Total > £1M

Pensions - 48% (including pensions in payment)
Property - 18%
Growth Investments - 13%
Income investments - 6%
Cash - 8%
Boat - 6%

sabretoothtigger

gadgetmind wrote: »

A tech fund, IT or individual shares?

Henderson tech. I hope they can apply better management then I can, they hold samsung and apple in equal weighting now which I think is correct.
I used to have samsung previously with asia pacific tracker.

Twenty years ago I wanted to buy microsoft shares, its now again become worth having but its now about handsome royalties then growth.
I dont like Balmer much but he only has to avoid doing too much harm.


On housing I think a fixed mortgage would mean every cost is then calculable and so it could be called an asset though possibly very illiquid. The problem with simply deducting the present mortgage cost or size is its presuming the future, go ahead but its a bit of a black box strategy possibly becoming a black hole