Finally, we are moving into our new house in a retiree-friendly Sunshine State. As for our old house, it is currently in pending with contracted selling price of $169,000. The projected closing date is late next month. When it happens, we will retrieve about $157,500 in proceeds from the sale of old home to pay off Other Mortgage (home equity line of credit) and Other Debts (home equity loan). The extra leftover will immediately be put into the main home mortgage.
We intentionally state our assets conservatively to keep us honest about our financial situation. Let’s see how much we can inflate our net worth if we don’t underestimate our assets.
(1) Our main house’s latest appraisal is $250,000, but we use $238,900 (+$11,100).
(2) Our secondary house’s selling price is $169,000, and Zillow’s estimate is $175,299. However, we use $157,500 to subtract all the commission fees, closing fees and relocation costs (+$11,500).
(3) The lowest trade-in values of our two vehicles that we bought brand new based on Kelly Blue Book values are $26,581, but we use $23,000 to be on a very conservative side (+$3,581).
(4) We understate our Cash account by $3,000 since we plan to spend them in the future to upgrade the appliances and furnitures (+$3,000).
(5) We claim $0 for personal property as I always told my wife that whatever we are spend on personal items it is like we are literally burning money in exchange for the experience or derived happiness. In reality, we should state a certain amount, like $4000, as those personal properties are real asset as part of our net worth (+$4,000).
If we use the current market values for our assets, our net worth can increase an additional $33,181 ($11,100 + $11,500 + $2,581 +$3,000+$4,000). However, in our long-term view we plan to make these illiquid assets to be irrelevant as they will depreciate down to $0 or they cannot be cashed out indefinitely.
What important for us is the number under Retirement as it is our investment portfolio that we depend on in our golden years during retirement. By moving into a bigger home as a lifestyle choice, I delay my retirement by an extra three years or so. Anyway, we look forward to the day when our investment account worths more than our illiquid assets again.
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