RodnJen
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Below is an interesting article regarding net worth and how it is perceived by some. I think it is a useful tool to measure one's progress at various points throughout life. Not something that should be bragged about around the campfire, but rather discussed at the dinner table between you and your spouse. The article points out the need for a plan and the ability to see it through until your needs or priorities change.
The one part that caught my eye was the discussion of debt. I know it is not as much fun as real estate threads here, but the subject comes up often. I see it as a useful tool if you have a long-term plan. But like so many other things, too much of a good thing can work against you.
"One example is a Bay-area couple who, at the time they got married, had six-figure student loan debt and two mortgages. Though their student loans alone exceeded $150,000, they borrowed with the plan they would aggressively pay off the loans once they got jobs. They were able to make $4,000-per-month payments on the loans and still have enough leftover to cover their living costs.
While the couple also had two mortgages, they earned passive income by turning one home into a rental property. The tenants’ rent covered the entire cost of the mortgage, which allowed the homeowners to build equity in a long-term asset that will appreciate in value.
The couple had a considerable amount of debt, but they also knew that debt was necessary in order to grow their net worth in the long term. They weren’t struggling to pay off high-interest credit card debt, which doesn’t ever offer any kind of return on investment."
The one part that caught my eye was the discussion of debt. I know it is not as much fun as real estate threads here, but the subject comes up often. I see it as a useful tool if you have a long-term plan. But like so many other things, too much of a good thing can work against you.
"One example is a Bay-area couple who, at the time they got married, had six-figure student loan debt and two mortgages. Though their student loans alone exceeded $150,000, they borrowed with the plan they would aggressively pay off the loans once they got jobs. They were able to make $4,000-per-month payments on the loans and still have enough leftover to cover their living costs.
While the couple also had two mortgages, they earned passive income by turning one home into a rental property. The tenants’ rent covered the entire cost of the mortgage, which allowed the homeowners to build equity in a long-term asset that will appreciate in value.
The couple had a considerable amount of debt, but they also knew that debt was necessary in order to grow their net worth in the long term. They weren’t struggling to pay off high-interest credit card debt, which doesn’t ever offer any kind of return on investment."
Why this CFP says you're thinking about net worth wrong
Mint financial planner Brittney Castro, CFP shares some of her best tips regarding how to think about net worth.
www.cnbc.com