Dick Tuck
Board Troll
- Aug 29, 2009
- 8,511
- 505
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Well, I'm a well trained bookkeeper and accountant.... I know something about taxes. Don't confuse that with tax accountant.... However I know more than the average individual...
And you don't put real property in the asset column? And what's owed on that property in the liability column? You sound like a shitty accountant. Reminds me of that insurance commercial with the supposed French model.
Thats not how it works
Without writing a thesis and putting it laymens terms - your collective wealth has nothing to do with your monetary wealth and your equity.
Your car may be worth $35,000k - your equity in the vehicle is all that matters - the rest belongs to the bank or whomever bought the loan...
You're worth what you're worth - not what those items you "own" are worth - that is not your value as an individual or collective..
Equity only matters in terms of net wealth. Even though the second I might drive off the lot, I might owe more on the car than I can possibly recover on it, it's still an asset. If it's a depreciable asset, like a car, it's still an asset, despite my liability being greater than the asset.
You confuse net value with asset. Let me go very slow. If I buy a car for $35,000 and a week later, it's only worth $30,000, my net worth might be -$5,000, only because I owe more on the asset than I can resell it for. That's what known as depreciation. I still have a $30,000 asset, even though I might still have a $35,000 liability. This only effects net value.
Have you ever even read a balance sheet? I can't imagine what you'd do if you had to invest all your retirement on your own. They're really starting to crack down on people wiping windshields at intersections in many places.