WEB Notes: Remember those psychological games we talked about earlier today? Here they are again…
Are these first two paragraphs an accurate statement of your wealth?
How so you are asking.
Your house is the biggest misnomer there is. Your home is your castle, not a bank account.
Let me explain with an example.
Let’s say you purchased a home for $100,000. You went out and got a loan for that amount of money. Now let’s say you have another $100,000 in debt for credit cards, car loans and who knows what else.
That is $200,000 in debt.
Your lucky day! That house you bought is now worth $300,000!
Did your wealth go up?
Of course it did Brandon. $300,000 – $200,000 = $100,000 in profit.
And there is how the bankers have control over you. You are still in debt and paying interest on that debt too boot! You still have the credit card payment, the vehicle payment and even the mortgage payment. You just think you have $100,000.
You see, that $100,000 is phantom money. A lot of people will take that phantom money and go buy a new vehicle with it which actually makes their debt climb even higher.
That $100,000 is an unrealized gain. You do not realize that gain unless you sell your house. Until you do that, you are still $200,000 in debt.
We all know the housing market goes up and just like all things that do, they come crashing down.
Think about it and spend your money wisely.
Americans’ wealth surpassed the $100 trillion mark for the first time in early 2018, as rising home prices offset the hit to households’ assets from a stock-market swoon in the first quarter.
Household net worth—the value of all assets such as stocks and real estate minus liabilities like mortgage and credit-card debt—rose by 1% from the previous quarter, or more than a trillion dollars, to a record $100.768 trillion, according to a report released by the Federal Reserve on Thursday.