Quote:
Originally Posted by thelegges
Especially when many own primary home and multiple investment homes.
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Obviously, your primary residence should be included when calculating your net worth. However, it is common practice to exclude your primary residence, as this report does, and only include assets that can provide a source of income (net worth excluding primary residence). In other words, investable assets. This would include properties other than your primary residence and assets that can be readily converted to cash such as coin and art collections, etc.
Your primary residence may rise in value from $300,000 to $1,000,000 over time but if you die before selling and realizing that gain, your primary residence was never a source of income (please don’t mention a reverse mortgage). If you downsize your primary residence, as many retirees do, the remaining money would be included.
This study defines a millionaire as having a net worth of at least $1,000,000, excluding your primary residence. It is possible to own a primary residence that represents a very large percentage of your net worth and have few investable assets.