Can you loan a bro some money for a ho? :bolt:$752,444,322.89.
I believe everything is calculated pre-taxed. As when people say Bill Gates is worth $100 billion, that $100 billion is before taxes are considered. If he were to realize his $100 billion, I'm sure after taxes, it would actually be worth $50 billion.A quick question about definitions. For assets: I assume, it include the value of your primary residence. How about the value of your future pension in case you have a defined pension benefits? For liabilities: does it include any tax deferred liabilities for accumulated capital gains (either in stocks or in real estate). If yes, should they be computed as liability from immediate asset liquidation or as discounted from the expected liquidation time? These are not small numbers: for somebody in $1M-$2M region it can be in the order of $500K-$1M (especially if somebody used tax depreciation and accumulated huge deferred tax liabilities). For me, it can put me somewhere between $700K and $3M depending on how "assets" and "liabilities" are defined.
Pre-tax calculation is very inaccurate. For example, assume you and me bought $500K house for cash and rented it for 20 years for $20,000 per year after expenses but before taxes. Assume house value increased to $1M. Assume you paid 50% taxes and invested your money, so, now you should have about $400K cash + house. Your pre-tax net assets are $1.4M. capital gain taxes on house (at 25%) are $250K, so, if you transfer everything into cash, you will have $1.15M. I, on the other hand, used CCA (deprecation) on the house and was able to defer taxes, i.e., get the entire 20*$20K=$400K rent tax free. So, it will grow to $800K cash and my pre-tax net assets are $1.8M. However, my tax liabilities on the rental property are 400*0.5+500*0.25=$450K, so, if I transfer everything to cash, I will have only $1.35M. The difference is not a small change.I believe everything is calculated pre-taxed. As when people say Bill Gates is worth $100 billion, that $100 billion is before taxes are considered. If he were to realize his $100 billion, I'm sure after taxes, it would actually be worth $50 billion.
As for defined pension, there should be a transfer value, or the value you get for taking it as lump sum instead as a pension when u get 65. That should be added to your nw
Pre-tax calculation is very inaccurate. For example, assume you and me bought $500K house for cash and rented it for 20 years for $20,000 per year after expenses but before taxes. Assume house value increased to $1M. Assume you paid 50% taxes and invested your money, so, now you should have about $400K cash + house. Your pre-tax net assets are $1.4M. capital gain taxes on house (at 25%) are $250K, so, if you transfer everything into cash, you will have $1.15M. I, on the other hand, used CCA (deprecation) on the house and was able to defer taxes, i.e., get the entire 20*$20K=$400K rent tax free. So, it will grow to $800K cash and my pre-tax net assets are $1.8M. However, my tax liabilities on the rental property are 400*0.5+500*0.25=$450K, so, if I transfer everything to cash, I will have only $1.35M. The difference is not a small change.
I think, after-tax wealth is what counts. After all, this is what you can really spend. Unless, of cause, you can claim SP payments as business expense.
Agree, huge difference if you're worth 2 million at 35 than at 55 or 75.Would be interesting to see people’s net worths and ages as well too