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05-23-2018, 01:34 PM #151
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05-23-2018, 01:42 PM #152
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05-23-2018, 01:48 PM #153
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05-23-2018, 01:50 PM #154
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05-23-2018, 01:54 PM #155
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05-23-2018, 01:59 PM #156
Owing money on something literally defines it as a liability. Simply googling these terms will prove you wrong. The potential equity you have is not realized unless you sell the house. Until then, the house and your mortgage are a liability.
You can "lol, wut?" yourself into oblivion for all I care. You're still wrongTraining log: http://forum.bodybuilding.com/showthread.php?t=165829701
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05-23-2018, 02:01 PM #157
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05-23-2018, 02:02 PM #158
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05-23-2018, 02:12 PM #159
- Join Date: Jan 2009
- Location: California, United States
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Not pissening at all. Take a stats course, it's useful.
Assuming there are 240,000,000 adults in the US, a sample size of 12,000 is pretty close to a 1% margin of error with 99% confidence.
It's actually a much larger sample size for the US than is actually needed. This is why you usually see samples in the US of about 2,000 people (95% confidence level with a 2% margin of error).
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05-23-2018, 02:17 PM #160
I'm sorry, but you simply do not understand what you're talking about. The house is an asset. The mortgage is a liability. The definition of equity is the net unrealized value over the mortgage.
I invite you to take your own advice and research the terms yourself: https://www.investopedia.com/terms/n/networth.asp
"An individual's net worth is simply the value that is left after s/he subtracts her debt from her assets. Examples of debt includes mortgages, credit card balances, student loans, car loans, etc. An individual's assets include checking and savings account balances, value of securities such as stocks or bonds, value of his or her home, market value of automobile, etc. In other words, whatever is left after selling all assets and paying off personal debt is the net worth. Note that the value of personal net worth includes the current market value of assets and the current debt costs.
Consider a couple with the following assets - primary residence valued at $250,000, an investment portfolio with a market value of $100,000, and automobiles and other assets valued at $25,000. Liabilities are primarily an outstanding mortgage balance of $100,000 and a car loan of $10,000.
The couple's net worth would, therefore, be calculated as [$250,000 + $100,000 + $25,000] - [$100,000 + $10,000] = $265,000"
https://www.investopedia.com/terms/e/equity.asp
"4. In the context of real estate, the difference between the current fair market value of the property and the amount the owner still owes on the mortgage. It is the amount that the owner would receive after selling a property and paying off the mortgage. Also referred to as “real property value.”"Misc Firearms Crew
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05-23-2018, 02:29 PM #161
Awesome. I'm going to go tell all those people that were upside down on their mortgages in 2008 that they got screwed in bankruptcy court
Absolutely none of what I said is incorrect. You're doing nothing more than splitting hairs over semantics.
A mortgaged home is a liability. That's it and that's all. Type up another novel if you want.Training log: http://forum.bodybuilding.com/showthread.php?t=165829701
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05-23-2018, 02:41 PM #162
40% sounds about right, even in the medical field. About half the staff I currently work with could not survive a month without pay due to all their payments. Idk how anyone can live like that. Not to brag or anything but I managed to save $15k while going to community college full time and live on my own. It doesnt take a genius to tell yourself NO.
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05-23-2018, 02:47 PM #163
You are arguing with someone who doesn't understand basic accounting.
Your statement is correct. If you are the borrower, the lender owns the deed to the house. You can't "own" an asset you owe money on such as a mortgaged house because the mortgage itself isn't necessarily debt, its a security for the loan provided by the financing institution. Once and only if you have paid off the mortgage, then you secure the title to the property. Until then all you "own" is the equity between the outstanding value on the mortgage and the selling price for the property. As you mentioned before this equity can and in many instances is negative.
The fact that you have to reiterate and explain this to people proves my point.
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05-23-2018, 02:48 PM #164
I'm sorry, but you're still wrong. Yes, there is a liability component to a mortgaged home, but the house is still an asset. For most people, that asset should be worth more than the mortgage taken out against it, meaning it's a net positive value. It may not be the most liquid asset, but its value still offsets the liability. It makes no sense to completely ignore the true value of you holdings - the equity - and only focus on the remaining liability. And yes, if housing prices plummet, it's possible your asset can be worth less than your liability left to pay for it, creating a negative net worth. This is pretty much what happens with every car note ever since vehicles are rapidly depreciating assets.
Misc Firearms Crew
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RIP YGST
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05-23-2018, 02:59 PM #165
lmao. I'm typing this from my desk where I work...as an accountant. Let me help you understand basic accounting:
Assets = Liabilities + Equity.
That's the basic accounting equation.
Or, Assets - Liabilities = Equity.
In this case: House - Mortgage = Equity.
When you mortgage a home you are still the legal owner of the property. The bank has a lien against your house which gives them the right to seize the property if you fail to meet your mortgage obligations.Misc Firearms Crew
Official Supp. Misc Beer Crew
RIP YGST
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05-23-2018, 03:02 PM #166
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05-23-2018, 03:06 PM #167
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05-23-2018, 03:08 PM #168
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05-23-2018, 03:10 PM #169
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05-23-2018, 03:12 PM #170
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05-23-2018, 04:00 PM #171
Some people really are not ambitious. They might like to have more money, but may not be willing to do what it takes to make that happen.
I was acquainted indirectly with a woman like this. She worked a low level retail job while going to school. Got her bachelor's degree in business management or some such. Wouldn't/didn't apply for higher level jobs. Her spouse was not happy.
I was more ambitious when I was younger; thought I could work my way up. And I sort of did, but not the way I had envisioned.
Right now I just want to do enough/make enough to make ends meet. Might change later.
Usually fall in to the "want to get comfortable/secure" group.
It is fun to dream about having a LOT of money...like start a foundation kind of money, but, while I appreciate nice things, I'm just not that into stuff or impressing other people.INTP Crew
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05-23-2018, 05:04 PM #172
You don't know how to define assets and liabilities and you clearly don't understand how a mortgage works. A mortgaged home is not an asset. If you default on your mortgage and you complete the foreclosure process you will lose your "asset" regardless of how much you paid into the mortgage in addition to paying huge fees and fines. The only way to access any equity outright (not using a HELOC) is to pay off the original mortgage whether you out right sell or refinance. This means you have to sell your "asset" in order to secure the equity difference. When you are foreclosed on the lender is not interested in selling your property at the best price, they will simply sell the home at price that meets their requirements and don't care about your equity.
In your equation example above you define the house as an "asset" and the mortgage as a "liability". From the lenders point of view is the mortgage considered a liability? Absolutely not. It is listed as an asset on the balance sheet. What about the house? It is used as collateral. It is not an "owned" asset by the person with the mortgage. The bank doesn't consider any equity increases or decreases. Their risk is accounted for in the interest rate and loan period Your explanation above is completely dependent on the fact that you abide by ALL the obligations and conditions outlined in the mortgage contract issued by the lender. In other words, you have to take on a MAJOR liability (mortgage) in between eventually OWNING an asset (property).Last edited by lucairv; 05-23-2018 at 05:10 PM.
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05-23-2018, 05:07 PM #173
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05-23-2018, 05:08 PM #174
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05-23-2018, 06:39 PM #175
Not surprising one bit. The same people drive cars they cannot afford, eat out too often and don't even attempt to meal prep a portion of their meals, buy new phones constantly, buy useless junk to keep up with the jones, and the list goes on.
Obviously there are some people that are struggling and trying to get out their mess but a lot of people do this to themselves because they don't understand the concept of living below your means.
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05-23-2018, 06:44 PM #176
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05-23-2018, 07:03 PM #177
Most Americans have this mindset of "If there's money in my account and all my bills are paid, then I have to spend it all before my next check."
I saw it everyday in the military.[Dallas Cowboys][Dallas Mavericks][Texas Rangers][TCU*NCAA][DFW Crew]
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05-23-2018, 07:24 PM #178
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05-24-2018, 05:55 AM #179
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Yup. Can confirm. You can buy stupid chit, but never go full retard.
I want to get another motorcycle. Have more than enough to pay cash for it, but thinking instead to dump a large chunk of the savings to get a rental property. $300-$400 increase in cash flow a month is a much better proposition than going and snagging that bike right now. If i wait til after, i still may have enough for the bike outright, and even if i don't, that increase in cash flow more than makes up for it.MFC
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05-24-2018, 06:07 AM #180
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