millionaire defined by total assets or liquid/semi-liquid assets?

[Deleted member 4644]

How do you define a millionaire... if someone has 500k in a house, and 500k in stocks are they a millionaire ?

Why or why not..

 

[Azraele]

I'm going to break it down a bit and describe how I would define rich (money-wise). Rich means that you have enough money that you don't worry about paying bills and you can get things you want also.

 

[KingNothing]

Originally posted by: Azraele
I'm going to break it down a bit and describe how I would define rich (money-wise). Rich means that you have enough money that you don't worry about paying bills and you can get things you want also.

That's nice, but it doesn't have anything to do with the thread.

 

[brxndxn]

I think you can call yourself a millionaire once your net worth is $1million. However, I think once your family's net worth is $1million (and you are head of the household), you can still call yourself a millionaire.

 

[everman]

Net worth.

 

[Azraele]

Originally posted by: KingNothing

Originally posted by: Azraele
I'm going to break it down a bit and describe how I would define rich (money-wise). Rich means that you have enough money that you don't worry about paying bills and you can get things you want also.

That's nice, but it doesn't have anything to do with the thread.

Ok fine, but your post didn't contribute either.

Someone once told me that it boils down to how much you're worth on paper.

 

[GasX]

Assets - Liabilities = $1 Million+

 

[Vic]

Originally posted by: everman
Net worth.

Correct.

Net Worth = Assets minus Liabilities

So $500k house (asset) but $400k mortgage on it (liability) plus $500k stocks (asset) but $100k on margin (liability) would mean a net worth of $500k.

 

[imported_Tomato]

Originally posted by: everman
Net worth.

 

[GasX]

additional note re: 1st post.

Someone with a liquid net worth of $1 million is either stupid rich or just stupid and rich.

 

[Vic]

Originally posted by: Mwilding
additional note re: 1st post.

Someone with a liquid net worth of $1 million is either stupid rich or just stupid and rich.

Liquid assets aren't just savings and checking accounts.
Stocks, bonds, and 70% value of 401k's (or similar) and IRA's are also considered liquid assets.

 

[GasX]

since when is an IRA easily converted to cash?

 

[Vic]

Originally posted by: Mwilding
since when is an IRA easily converted to cash?

Since always. You just have to pay the penalties, fees, and taxes. Same as a 401k. That's why only 70% of its value is counted as a liquid asset.

 

[GasX]

courtesy of Quicken.com:

Liquid net worth

Your net worth is the total of all of your assets (stocks, bonds, bank accounts, home equity, real estate, personal property, business receivables, notes receivable, etc.) minus the total of your liabilities (outstanding loans owed, credit card balances, taxes payable, bills payable, etc.) Unfortunately, many of these assets will not be readily accessible if cash is needed in a hurry. Liquid net worth only includes assets that can readily be turned into cash without a major loss in value; therefore, do not include real estate or business equity, personal property and automobiles, expected inheritances, or funds already earmarked for other purposes.

In other words, you are wrong...

 

[Vic]

I'll bring that up with the big-wigs at Fannie Mae before they publish next year's conforming mortgage underwriting manual


edit: and obviously you don't count automobiles or any other such personal property as a liquid asset...

 

[GasX]

Originally posted by: Vic
I'll bring that up with the big-wigs at Fannie Mae before they publish next year's conforming mortgage underwriting manual

:beer:

 

[0roo0roo]

liquid. most property can only be sold at a fraction of their cost.

 

[GasX]

Originally posted by: 0roo0roo
most property can only be sold at a fraction of their cost.

I owned my house for two years and had a 50% return. We are currently in a nationwide real estate boom. WTF are you talking about ?

 

[bsobel]

Originally posted by: Mwilding

Originally posted by: 0roo0roo
most property can only be sold at a fraction of their cost.

I owned my house for two years and had a 50% return. We are currently in a nationwide real estate boom. WTF are you talking about ?

He's talking about cars, motorcycles, boats, jetski's, etc....

Bill

 

[FoBoT]

Originally posted by: everman
Net worth.

^^^

 

[kt]

Originally posted by: Vic

Originally posted by: Mwilding
additional note re: 1st post.

Someone with a liquid net worth of $1 million is either stupid rich or just stupid and rich.

Liquid assets aren't just savings and checking accounts.
Stocks, bonds, and 70% value of 401k's (or similar) and IRA's are also considered liquid assets.

Would depends on what kind of stocks, wouldn't it? Let's see you try to turn Enron stocks into cash..

 

[bsobel]

, wouldn't it? Let's see you try to turn Enron stocks into cash..

Just because the value of those stocks dropped to zero does not make stocks non-liquid. It just makes those stocks worthless.

Bill

 

[ReiAyanami]

alright, so if a lottery winner is holding a ticket worth $180 million, are they a millionaire at that moment?

or only at the award ceremony where they hand over the giant check?
or only when the giant check is cashed at the giant bank?

 

[MillionaireNextDoor]

1 million dollars in cash of your own money and not anyone else's, even if you paid off everything.