Your house: asset or liability

According to the newest real-estate tax statement I received yesterday, the price of my house dropped by $75K to $325K. My mortgage is still $342K.

I became part of the negative-equity group. The group that many financial industry experts are trying hard to persuade not to just walk away. I am not going to walk away because I realized I bought the house not for its investment value, but for its sentimental value. I love my house and am not planning to move in the short term.

Once someone attaches sentimental value on a house, it becomes a financial liability. It needs to be maintained and the mortgage paid. Therefore, it is not right for me to keep thinking of my house as an asset. It becomes an asset only if I manage to sell it and I have on my hands a stack of money in exchange.

Under this consideration, my net worth is a depressing -$228K and not $100K anymore. But I am happier this way because I am being more honest to myself.

Net Worth Review: November 2007

I finally finished preparing my first for-public net worth and put it over at networthiq.com. I put a badge on the right side of the page.

So, we are worth $107K now, if zillow.com's valuation of our house is accurate. We started from $0 net worth 4 years ago. Before that, at one point, we were $30K in debt. Through discipline, a lot of hard work, luck and allowing for time to help us, we are now $138K away from that point. Phewww....

Now we need to do what took us 4 years in only 1.5 years. That's the goal!

I also discovered that the money we bring home has increased unnoticed over the years because of raises. We now actually bring home $8.9K/mo. It simply means more for us to save since our private lifestyle is still college-student like.