What's your age and your net worth?

What's net worth (house, investments, pension etc)?

  • 100k - 500k

    Votes: 36 22.8%

  • 500k - 1 mil

    Votes: 23 14.6%

  • 1 - 2 mil

    Votes: 29 18.4%

  • 2 - 5 mil

    Votes: 37 23.4%

  • 5 mil +

    Votes: 18 11.4%

  • 10 mil+

    Votes: 10 6.3%

  • 25 mil+

    Votes: 2 1.3%

  • 50 mil+

    Votes: 3 1.9%
  • Total voters
    158
Mike Hoxbig said:
Can we agree on a standard way in which this is defined? I see people mixing it up, myself included.

1 - You have a R2m bond, and owe R1m. You don't actually own the asset yet, so your liability is R1m, and your net worth is -R1m.
2 - You have a R2m bond, and owe R1m. You have an asset worth R2m, and a liability of R1m, so your net worth is +R1m.

Which of the above is correct?
Click to expand...
2nd option
 
ShaunyCT said:
People still think of a credit card as a huge problem. In fact a credit card can be a good thing.

Most banks give you a higher incentive for using a credit card.
Reduce your credit card limit to something you can manage. In other words you should be able to pay the full outstanding amount without a sweat. In my case I know the amount that I swipe every month at various shops/merchants, so I transfer that amount into the credit card. Everytime the credit card gets funds into it, the bank sees it as a payment.
So let's say your purchases/swipes is about R10000 every month, then have a limit of R10000.
You can also make your credit card limit as low as R1000, then transfer R10000 in the credit card for all the swipes. When you do that AND it's link to an incentive product like Greenbacks, Rewards or E-bucks, you will smile every month.
Click to expand...

True, it is a method which I live by, but you need a certain type of discipline to be able to do that. If someone knows that he/she would not be that disciplined with a credit card then I believe it is better for them to just use a debit card. Maybe down the line, when they understand themselves better they might consider a credit card. Fact is, more people struggle with credit card debt than wants to admit it.
 
garp said:
True, but I still believe that these things are cyclical. Back in the 80s-90's nobody really thought much of property as an investment because prices had been going mainly sideways, or at least maintaining with inflation for 20+ years. In a "normal" environment (sans EWC / ANC, that is) the same will happen - it's just that with property the cycle is very long - 2/3 decades of stagnation between booms. It's just unfortunate that the current millennial generation caught the gap in between.
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Yes most definitely cyclical and the patterns ultimately repeat. SA is a bit tricky to gauge due to potential instability. But for sure millennials were unlucky to catch this lethargic market.
 
Milano said:
Yes most definitely cyclical and the patterns ultimately repeat. SA is a bit tricky to gauge due to potential instability. But for sure millennials were unlucky to catch this lethargic market.
Click to expand...

It's not just a sluggish market. I feel for the younger generation trying to get into the property mkt now. The relative costs of first purchase for me compared to them are far higher now.
 
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ShaunyCT said:
Your house ONLY becomes an ASSET if you sell it and make a profit out of it or you rent it out and make a profit.

Source: Real businemen like Robert Kiyosaki
Click to expand...

No, you OWN the house. You OWE liability for the funds that you BORROWED to pay for the house but it is yours. A debtor can attach any asset they choose ( within some limits ) of the defaulter and the house is normally the biggest to cover a debt.
 
ShaunyCT said:
Your house ONLY becomes an ASSET if you sell it and make a profit out of it or you rent it out and make a profit.

Source: Real businemen like Robert Kiyosaki
Click to expand...

The net worth lies in the ability to sell the house. If you own a R10m house with no other investments / assets and you sell you house and buy a R500k farmhouse in the mountains and live of the land then you will have R9.5m in cash to spend as you please (ignoring taxes now.) I think what your wanting to 'teach' us is that a house is not an 'investment' in the sense that it doesn't generate an income, but it is still an asset and will always be.
 
ShaunyCT said:
Your house ONLY becomes an ASSET if you sell it and make a profit out of it or you rent it out and make a profit.

Source: Real businemen like Robert Kiyosaki
Click to expand...
AS I said "new age" view of what an "asset" is.

This is not the accounting definition of an asset.

Therefore when the bank asks you what your assets are that definition his view wont fly
 
S3XY said:
The net worth lies in the ability to sell the house. If you own a R10m house with no other investments / assets and you sell you house and buy a R500k farmhouse in the mountains and live of the land then you will have R9.5m in cash to spend as you please (ignoring taxes now.) I think what your wanting to 'teach' us is that a house is not an 'investment' in the sense that it doesn't generate an income, but it is still an asset and will always be.
Click to expand...
Exactly!
 
Splinter said:
It's not just a sluggish market. I feel for the younger generation trying to get into the property mkt now. The relative costs of first purchase for me compared to them of first purchase are far higher now.
Click to expand...

You are right, good point. It must be horrific being a first time buyer now coming in at the peak of the market (ok the peak was really 8 to 18 months ago depending on property value and area) but still not easy to get in now, forget even potential future growth as you mentioned.
 
ShaunyCT said:
People still think of a credit card as a huge problem. In fact a credit card can be a good thing.

Most banks give you a higher incentive for using a credit card.
Reduce your credit card limit to something you can manage. In other words you should be able to pay the full outstanding amount without a sweat. In my case I know the amount that I swipe every month at various shops/merchants, so I transfer that amount into the credit card. Everytime the credit card gets funds into it, the bank sees it as a payment.
So let's say your purchases/swipes is about R10000 every month, then have a limit of R10000.
You can also make your credit card limit as low as R1000, then transfer R10000 in the credit card for all the swipes. When you do that AND it's link to an incentive product like Greenbacks, Rewards or E-bucks, you will smile every month.
Click to expand...

I work my CC the same way.

I'm fortunate in that I can stick to a budget and not get caught up in impulse spending, so I set myself a limit on how much I can swipe every month. Unless I have to service my car or there is another form of unplanned expenditure, as soon as my salary comes in I can settle my CC. And if I do overspend because I had to service my car or whatever, I just pull the balance out of my savings and settle it.
 
A credit card showed me not to buy everything I eye, but rather to work smartly with money.

what I can say ... if you have a nice big credit facility (use it smartly), it will change your life !
 
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thestaggy said:
I work my CC the same way.

I'm fortunate in that I can stick to a budget and not get caught up in impulse spending, so I set myself a limit on how much I can swipe every month. Unless I have to service my car or there is another form of unplanned expenditure, as soon as my salary comes in I can settle my CC. And if I do overspend because I had to service my car or whatever, I just pull the balance out of my savings and settle it.
Click to expand...

How is a car service unplanned expenditure? Isn't the service once a year or every XXX km's? I just keep track of all my past service invoice values and I take the service I had 2 years ago and add 6% inflation per year, then add a little extra and divide by 12 and dump that in a savings vehicle. The same with golf memberships / own birthdays etc.
 
CC saves alot of unneccessary paperwork and so on as well , I hate asking a bank for money and I treat my savings like a liability so I never take money out. Once its in a savings account to me its dead and gone. so rather use the revolving credit. use it wisely and you dont pay that much.
 
S3XY said:
How is a car service unplanned expenditure? Isn't the service once a year or every XXX km's? I just keep track of all my past service invoice values and I take the service I had 2 years ago and add 6% inflation per year, then add a little extra and divide by 12 and dump that in a savings vehicle. The same with golf memberships / own birthdays etc.
Click to expand...

Because anything can be uncovered when you take your car in for an annual service. Last year, literally days before my service, I noticed an oil leak. Turns out a side shaft had to be replaced. I did not budget for that.
 
Kosmik said:
No, you OWN the house. You OWE liability for the funds that you BORROWED to pay for the house but it is yours. A debtor can attach any asset they choose ( within some limits ) of the defaulter and the house is normally the biggest to cover a debt.
Click to expand...
Skip a couple of payments on the house then you will see who really owns the house.

Or ask the Deeds office who is the current owner of that house that you still paying off...

After you paid your house off in full then you MUST speak to attorneys(either the financial institute's or your own attorneys) and pay them to put the house officially in YOUR name.
 
ShaunyCT said:
Skip a couple of payments on the house then you will see who really owns the house.

Or ask the Deeds office who is the current owner of that house that you still paying off...

After you paid your house off in full then you MUST speak to attorneys(either the financial institute's or your own attorneys) and pay them to put the house officially in YOUR name.
Click to expand...
You own the house. The bank has a lein over the house in the form of a mortgage bond.

They can attach the property if you fail to keep up payments. If they sell the property for more than you owe, they must pay the difference to the owner.
 
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