4 ms·
My understanding of net worth is that asset purchases like a home would initially be a wash w/r/t your net worth. Starting with a $200k net worth, and you (for
by Judson 7y ago
My understanding of net worth is that asset purchases like a home would initially be a wash w/r/t your net worth.
Starting with a $200k net worth, and you (for instance) put down $100k on the home. You now have $100k in cash/securities and $100k in home equity, assuming you paid the appraised value of the home.
Hope that helps!
- downerending 7y agoAlso note that in a such a scenario, you've become heavily invested in the real estate market, as opposed to diversifying your holdings. Not necessarily bad, but you really need to pay attention to this imbalance.