How much do you owe?

Zero debt

I'm 22

Make 56k/year

car 29k

student loan 15k

credit cards 2.6k

Working on getting my credit card to zero asap so I can start moving that money to my car and pay that off.

Magic 8 Ball wrote:

You are not a CPA. You are a lying sack of sh*t, and you got called out. And your asinine question as posed has all the eloquence of a 20-something-year old college student, giving me further ammunition that you are not a CPA.

No real CPA would pose this question without expecting mortgagees would qualify their answer. Even the most simple of homeowners won't give a mortgage balance without offsetting the loan balance with the home's value.

The following items lend credibility to the heretofore unproven theory that you are an insecure, unintelligent, irrational, dishonest retarded earthworm:

Unfounded and unknowable claims ("You are not a CPA")

Ineloquent and unoriginal name calling ("You are a lying sack of sh*t")

Abuse of the English language ("giving me further ammunition that you are not a CPA")

Perhaps you would care to demonstrate that indeed you are not an insecure, unintelligent, irrational, dishonest retarded earthworm.

I’m not a CPA – only by choice – but t I do have a Masters Degree in accounting. I simply decided that test wasn’t for me and I linger in finance instead.

If you use your credit card, that doesn’t simply go to “expense.” That purchase, like any, should have a resulting asset (unless you’re literally paying for nothing, or disposable asset, or even a service). For example, if I used my credit card to buy a new refrigerator, I’m pretty sure that I’d debit the asset and credit cash. My mini balance sheet would then have a liability of the amount I just paid for the refrigerator, and an offsetting asset for the fair market value of said asset. In reality, the two amounts would never be the same because you will not be able to resell the refrigerator for the amount that you just paid for it. That difference would then go to hit your personal income statement as a loss (when the sale occurred) and eventually wind up nailing your personal retained earnings (net worth) adversely.

It’s important to note that a credit card purchase doesn’t equal an expense without an offsetting asset – as always, it depends on what you just purchased.

$400K mortgage

$40K home equity

16:19 5K PR (35 years ago)

$360K income

Zero.

Why would anyone take out a car loan? Huge waste of money. If you can't afford to buy a car outright, then don't buy that car.

Most people don't have large amounts of money sitting around, but most people need cars for work. What else are you going to do if you're poor? If you buy a junker it won't be reliable and the repair costs will eat you alive. That said, taking on a $30,000 car loan at 22 is dumb.

Gonna have to call BS wrote:

Perhaps you would care to demonstrate that indeed you are not an insecure, unintelligent, irrational, dishonest retarded earthworm.

Most 4-year olds recognize that earthworms dont have the dexterity or weight necessary to depress the keys on a standard keyboard. Since I typed this reply, I can at least dispell your concerns that I am an earhtworm.

Insecure? No.

Unintelligent? No.

Irrational? Sometimes, but not in this instance.

Dishonest? No.

Retarded? No.

Your use of language suggests that you are somewhat educated. However, since you lack common sense by asking what you assume to be an insecure, unintelligent, irrational, dishonest retarded earthworm for a reply, I would conclude that it is you that fits the description of "retard".

Agreed ^_^

It was absolutely stupid. But i cant take it back lol.

Debt:

$0

24 y/o

Renting ($675/mo)

~25k/yr

w/o degree

16:58 5k

Pay you later wrote:

I'm a CPA.

I know the difference between secured debt and unsecured debt.

...

I merely asked a question about one area of your balance sheet, liabilitites.

If you want to sub-classify that into secured and unsecured liabilies and further sub-classify secured liablities by depreciating and non-depraciating secured assets, be my guest.

Smackdown!

This gave me my first laugh of the day. :-)

Thanks.

I owe my supplier for 1.5 kilos of smack.

I was simplifying by saying that credit purchases go to expense.

But most items are expensed over a short term if not right away.

If you want to depreciate your refrigerator or stereo over a number of years and keep a carrying value, go ahead.

Most people do not wind up selling those items, they dispose of them. It will eventually go entirely to expense.

But most if the stuff you have does not contribute much to your net worth.

The purchase of a car of course becomes an asset.

It is large enough in value to say that it adds to your net worth, though it depreciates until it has very little residual value.

Now the purchase of a home becomes an asset classified as an investment.

This is because it generally does not depreciate and in fact tends to appreciate over time.

Whether or not there is any morgage borrowed against this asset does not change how it is classified on the balance sheet.

Same with a car. Whether you owe on it or not, you list it as a fixed asset and schedule depreciation.

Now to the other side of the balance sheet - the liabilities incurred by these purchases.

It's debt. Money you owe.

You have long term debt and you have short term debt.

Short term debt includes the next year's worth of mortgage payments and car payments. It would also include all your credit card debt whether you pay it off in a year or not since it does not have a payment schedule.

You can categorize these liabilites by any assets that they are secured by and list that in the detail.

So your net worth is:

Your cash plus carrying value of any assets such as cars and items you are able to sell plus investments such as 401K and the market value of your house - less all that you owe.

I just ask here- how much do you owe?

(Thinking about it more, a refrigerator usually stays with the house. It adds some to the value of the home but that addition is pretty much negligible. I'd just expense the refrigerator off the top)

Car: 13k left

Student Loans: 40k

Two more years (please) of a fellowship phd program so I shouldnt be adding anything more.

Pay you later wrote:

I owe you an apology. Sorry. Now my debt is $0.

Mortgage, $115K and 12.5 years.

Some credit card, but nothing carried, ever.

That's it on $120K family income.

Thinking about buying a rental as investment with the low rates, low prices, and ho hum stock market. That will add debt, but at least with some offsetting income.

28 years old. I run, but I’m not as fast as I used to be! Sub 6 miles were faster than comfortable the other night!

Old House – $133k (this will be paid off next week via proceeds from sale)

New House - $173k (just bought it and paying extra principal only pmts each month)

Car – paid for – probably going to buy another next month (will pay cash on a trade-in)

Student Loans - $11k (Grad school loan is all that’s left - this will be paid for by year-end)

Rental properties with very positive cashflow; total = $47k

Magic 8 Ball wrote:

Gonna have to call BS wrote:

Perhaps you would care to demonstrate that indeed you are not an insecure, unintelligent, irrational, dishonest retarded earthworm.

Most 4-year olds recognize that earthworms dont have the dexterity or weight necessary to depress the keys on a standard keyboard. Since I typed this reply, I can at least dispell your concerns that I am an earhtworm.

Insecure? No.

Unintelligent? No.

Irrational? Sometimes, but not in this instance.

Dishonest? No.

Retarded? No.

Your use of language suggests that you are somewhat educated. However, since you lack common sense by asking what you assume to be an insecure, unintelligent, irrational, dishonest retarded earthworm for a reply, I would conclude that it is you that fits the description of "retard".

Well said, sir.