I owe more wealth than I own

Generali

martinsurrey wrote: »

no its not :-P it is a full blown liability, but its payment terms are such that its got indeterminate payment dates, as such the fair value of the debt is reduced (under IFRS).

https://en.wikipedia.org/wiki/IAS_37

A liability is contingent if its existence is only confirmed by a future event (such as the result of a court case), in this case, the debt 100% exists, its only its repayment profile that is uncertain.

but I agree with the sentiment, its really a tax on employment.

Interesting, thanks.

I've spent a number of years trying to improve my accounting knowledge and have come to the conclusion that rather like car repair it's something I'd rather pay an expert to do for me rather than do myself.

chucknorris

Generali wrote: »

I am lucky enough to have a positive net worth. Not a huge one but my liquid assets exceed all of my debt. I don't count my pension in this as it is so illiquid.

It isn't always that obvious what to include/exclude is it? I always used to exclude my pension, but now that I am over 55 (and can access it), I do include it. But in a way, it still remains illiquid because of its tax free status, I don't want to access it until my non tax free wrapped assets/cash are spent, this also applies to my ISA's.

System

martinsurrey wrote: »

no its not :-P it is a full blown liability, but its payment terms are such that its got indeterminate payment dates,

Is it a debt to the estate on death, as a mortgage or bank loan would be?

MFW_ASAP

Whenever I buy a new house, my first objective is always to own more of it than the bank. I doubt if it gives me anything in law if I get into difficulties (i.e. I own more of the asset, so they can't force me to sell) but it does give me a tangible and motivational target to aim for when overpaying the whole mortgage looks like an impossible mountain to climb.

I got below the 50% LTV with my current house but then borrowed a further £28k to get the windows done, so I now own less than the bank again.

I'm overpaying 10% each year on the window loan, so will hopefully be back at 50% LTV soon!

Generali

Twenty eight grand on windows. Do you live in St Pauls Cathedral??

Thrugelmir

El_Torro wrote: »

There was a point in there somewhere about us having a credit culture though.

A politicians way of keeping everybody happy with the illusion that they are wealthy.

wotsthat

Thrugelmir wrote: »

A politicians way of keeping everybody happy with the illusion that they are wealthy.

We really are wealthy - there's no illusion.

Plenty of people living on a few dollars a day - I think they'd swap with us and just try and cope with the horrors of our credit culture.

MFW_ASAP

Generali wrote: »

Twenty eight grand on windows. Do you live in St Pauls Cathedral??

Haha, it might have been cheaper if I did.

We have stone mullioned windows, very much like these:
http://www.justinbrownjoinery.com/USERIMAGES/100_1125.JPG

So each window is really three or four windows (as far as a glazier is concered anyway). We have something like 18 windows in the farmhouse or 54 frames/panes. We also fitted powder coated stainless steel frames, and they weren't cheap, I can tell you!

System

Clifford_Pope wrote: »

Is it a debt to the estate on death, as a mortgage or bank loan would be?

I've just looked it up - all student loan debts are written off on death.

So it's not a proper debt, just a graduate tax applied if you earn more than the threshold.

Generali

MFW_ASAP wrote: »

Haha, it might have been cheaper if I did.

We have stone mullioned windows, very much like these:
http://www.justinbrownjoinery.com/USERIMAGES/100_1125.JPG

So each window is really three or four windows (as far as a glazier is concered anyway). We have something like 18 windows in the farmhouse or 54 frames/panes. We also fitted powder coated stainless steel frames, and they weren't cheap, I can tell you!

The windows are beautiful.