ziggy29
Moderator Emeritus
As opposed to the money in savings, which appreciated 0.000023%? (Thanks Ben!)I forgot to add in the $300 I keep in my firesafe for emergencies!
But wait - that didn't appreciate in 2012....
As opposed to the money in savings, which appreciated 0.000023%? (Thanks Ben!)I forgot to add in the $300 I keep in my firesafe for emergencies!
But wait - that didn't appreciate in 2012....
Perhaps a subject for endless debate, but I don't believe that net worth calculations normally include possible future expenses.Sould net worth and YTD returns include deferred tax liabilities? This is a great question, right up there with "pay off the mortgage" and has the potential to keep us busy for years.
LOL! Our RV tire replacement buy was high enough, that a Goodyear rep took our call personally, and made sure the tire shop got the tires after their distributor told us they weren't yet available. She told my husband after she got back to us (after arranging the deal) that it was a nice sale for the tire shop. And we got tires with all same date codes less than a month old - sweet!
Hmmmm - but I haven't been depreciating my RV tires!
Wouldn't that be like running FIRECalc with expenses set to 0?Perhaps a subject for endless debate, but I don't believe that net worth calculations normally include possible future expenses.
Net worth is a balance sheet calculation while budget is an "income and expense" or P&L. If net worth is assets minus liabilities, deferred tax on income and unrealized capital gain is very much a liability.Perhaps a subject for endless debate, but I don't believe that net worth calculations normally include possible future expenses.
Since my annual withdrawal value or budget already includes the taxes I have to pay each year because I sold some assets, it doesn't make a difference to me. In other words, my annual budget already includes taxes I am likely to pay, so I can safely compare it to my liquid assets at their pre-tax value.
I know I will be whipped, but do you subtract taxes from tIRA's and 401k's balances ? You don't really own that money, and how do decided what tax rate to use.
As opposed to the money in savings, which appreciated 0.000023%? (Thanks Ben!)
But you don't know what the taxes on that unrealized cap gain or tax deferred income is going to be, and it might be zero depending on any year's given tax bracket indexed to inflation, and especially if your heirs get their hands on it.Net worth is a balance sheet calculation while budget is an "income and expense" or P&L. If net worth is assets minus liabilities, deferred tax on income and unrealized capital gain is very much a liability.
Yes, true.But you don't know what the taxes on that unrealized cap gain or tax deferred income is going to be, and it might be zero depending on any year's given tax bracket indexed to inflation, and especially if your heirs get their hands on it.
You don't know the future taxes may be but you do know current rates and calculate your current tax liability. Same for the heirs.But you don't know what the taxes on that unrealized cap gain or tax deferred income is going to be, and it might be zero depending on any year's given tax bracket indexed to inflation, and especially if your heirs get their hands on it.
And you know exactly how much of each account/asset you are going to withdraw each year and which year and can calculate back to today's dollars?You don't know the future taxes may be but you do know current rates and calculate your current tax liability. Same for the heirs.
I just go by what the county assessor office says unless there is strong evidence that it is wrong. You also could also you a source like zillow.com or
trulia.com. These aren't perfect but they aren't bad. I just ran zillow on the 5 properties I ran they all were reasonable estimates.
I don't include transaction cost although you could certainly make the case that for real estate it makes a material differences.
All you scorekeepers need to be sure you include the loose change under your sofa seat cushions...
All you scorekeepers need to be sure you include the loose change under your sofa seat cushions...
But I do kind sir. Money is money. DW will never walk by a penny on the street without picking it. That's how we roll here (how we roll the coins of course).
Net worth is a balance sheet calculation while budget is an "income and expense" or P&L. If net worth is assets minus liabilities, deferred tax on income and unrealized capital gain is very much a liability.
Which reminds me, I need to collect all my pennies and take them to the bank before they become obsolete......
Phasing out the penny
I know I will be whipped, but do you subtract taxes from tIRA's and 401k's balances ? You don't really own that money, and how do decided what tax rate to use.
My 7 year FIRE'd anniversary was yesterday, Ms G had to remind me.
I don't include my paid off ranch, and I didn't subtract taxes on deferred accounts, 9.2%.