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  • #61
    Originally posted by Julian View Post
    Back to the thread, I wonder how many people are downgrading their nett worth now that the market seems to have turned.

    I also wonder how many people include selling costs on the debt side of the ledger when they work out their nett worth. These can be significant and include agent costs, legal costs, advertising/marketing costs, reclaimed depreciation, and costs for breaking fixed term loans.

    If any of you intend to turn your investments into cash these are real costs you will incur. Your true nett worth, in cash, will be far less than your selling price less your debt.

    Julian
    Hello Julian,

    I agree that selling costs should be taken into account if anyone is considering selling up, but I am not so sure that these costs should be used when working out nett worth. They are after all a seperate issue.

    If I have three properties worth $900,00 and a debt of $700,000 my nett worth is $200,000.

    If I sold up my selling costs may come to $30,000 but they may not. This sum is not an amount does not go on the liabilities side of the balance sheet, or does it?

    xris

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    • #62
      Well banks are certainly aware of these costs. These are very real costs if you are cashing up investments. By stating your nett worth in hard currency (ie $NZ) you are giving the impression of your nett worth in this currency. To turn your properties into cash these costs will be incurred. Simple. It is the same if you have money in fixed term loans. If you are working out your current nett worth, the cost of breaking these loans must be taken into account.

      Whether you believe me or not, it is probably better to err on the side of caution, underestimate your nett worth and be pleasantly surprised, should you have to cash up, than the opposite.

      Julian
      Gimme $20k. You will receive some well packaged generic advice that will put you on the road to riches beyond your wildest dreams ...yeah right!

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      • #63
        Ow I reciently moved down a level....Yes!
        Persistence (per-sis'tans, -zis'-) n. 1 The act of persist-
        ing. 2 The quality of being persistent 3 The continuance
        of an effect longer than the cause that first produced it.

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        • #64
          For Monid and the crew on earlier posts of this thread.

          This is from core data in Oz and because NZ has a reasonable correlation to Oz I post it for general back slapping and congratulations to be had for PTer's

          Remeber oz has approx 20 million people so the 172,000 HNWI with over 1,000,000 dollars of investable assets actually only make up .86% of the population.

          The 21,000 with investable assets of over 3mill are only .11%

          So congrats to the fairly significant proportion of Pter's that make it into the top 1% and congrats to all of those on the ladder and climbing towards what ever level you are looking for.

          cheers

          Terry



          What's In A NameOne of the things we are big on here at CoreData-brandmanagement is semantics – the science of saying exactly what we mean, after all clear communication is one of the challenges of working in research.
          This is important in the context of high net worth (HNW) individuals because there isn’t a standard definition of what exactly constitutes a financially wealthy person in Australia.
          Therefore in the interests of clarity we have devised some definitive descriptions of the nation’s rich.
          CoreData-brandmanagement formulated these after combining a variety of information sources - but primarily data derived from Australian Bureau of Statistics (ABS) and four years of group research on Australia’s rich.
          The definitions aren’t exhaustive, how could they be? And to a large extent they make use of the most basic of behavioral segmentations, but as a catch all they will have to do:

          It’s worth noting that this breakdown doesn’t cover behaviour and our research has indicated that behaviour differs across and within these segments.
          For example the number of people who have retired with $1 million of investable assets – as opposed, for example, to the number of $1 million-plus 40 year olds who are still earning money display very different behaviour.
          As do the number of people who fit the description of core affluent who are fast heading towards their first million.
          What is critical to remember in this is that investment behaviour begins to change when an individual acquires more than $750,000 in investable assets - it’s at this stage they tend to start to look for real diversification, wealth preservation and making serious decisions about their money.
          More than three quarter’s of HNWs are male and most of them are over 50. And approximately slightly more than half of both male and female HNWs derive their income from owning all of or part of a small business – indeed an Australian HNWI is six times more likely than average to own all of or part of a business.
          ABS data shows average incomes in the capital cities in Australia are 16% above those outside the capital cities.

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