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Net Worth

Added on September 24th, 2009 by | Report Post
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Net Worth


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    dorix

    “Net Worth” isn’t just a measure of your cash assets, it’s a measure of all of your assets minus all of your liabilities. With the possible exception of the student, everybody in that picture with a negative net worth almost certainly owns enough assets to give them a positive net worth — which would be much higher than the homeless man’s.

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    MonkeyHitman

    what would you call a asset? i would like to see a list

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    The Matrix: Rebooted

    Houses, cars and retirement accounts are the main assets for middle class people. There’s also annual revenue to account for. If you have $0 in the bank, but have a reliable job, that means your actual net worth is greater than zero.

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    dorix

    I don’t think that’s true, actually; I think an asset has to be “readily convertible into cash” to be considered part of one’s net worth. You can sell your house, your car, almost anything, but you can’t convert future paychecks into cash, and even a reliable job can be lost unexpectedly.

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    The Matrix: Rebooted

    A liquid asset is “readily convertible into cash”. An asset is anything that has financial value. Future paychecks can be converted into cash by using them to leverage a loan.

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    dorix

    Sure, but when you take out a loan, now you have a liability, in addition to the cash or whatever you purchase with the loan. Your net worth doesn’t change; it may even decrease if you purchase something that depreciates faster than the loan is paid off.

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    The Matrix: Rebooted

    I’m sorry, but that’s how corporate accounting works. The stock price of a company based on how much cash in the CEO’s desk or how many buildings they own? No, it’s based on the expected profit. So your own net worth should reflect your own expected income.

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    bejamus

    Pretty much what reboot said. I was actually going to say the same thing, about how bad this pic fails, but it seems that I don’t really need to.

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    dorix

    Why do I get the feeling that you’re about to point out that I don’t know what I’m talking about? You’re probably right. The comic just strikes me as misleading — even if everybody else has a negative net worth, they all still enjoy a higher quality of life than the homeless man.

    The car owned by the car loan dude is an asset. Admittedly, the car has probably depreciated somewhat and may be worth less than the balance on the loan, who knows. Bank Loan dude probably has investments. If any of them own a house, that’s an asset.

    The women with the credit cards didn’t get their balances that high without buying something. That may have included consumables like food and diapers that do not count as assets, but they probably also bought appliances, television, etc.

    I take back my statement that they all likely have a much higher net worth; depreciation and money sunk in consumables could leave them all with negative net worth. Even so, they all have so much more than the homeless man.

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    Catherine Longfellow

    Semantics debates aside, this image is fail and misleading hippie diatribe.

    “Homelesss people know what’s up, cause they like,.. escaped the clutches of capitalism!”

    As has been said, my car, house and job provide me a “net” worth far more valuable than $2.73. Also, no credit cards, but I do have a student loan. >:[

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    grammarrobot

    I still wouldn’t feel like giving him change. Just wouldn’t.

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    deuce

    Did anyone else notice that the chick in the middle looks like Dolly from Family Circus?

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    Maxwell Edison

    Those lucky duck poor people got it so good.

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