Agreed. But the presumption is most people will pay the loan in it’s entirety. The student loan is a no brainier here in NI if you’re from a lower income family, the grants I have gotten should easily pay off the interest and probably make the student loans profitable.
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If married/long term partner are people basing it on all assets divided by two? Or counting all assets.
Also on the house/mortgage side of things I agree it should be at current prices, what the equity you have is, the mortgage will bring down people to much as most here are financially savvy and know you shouldn’t be paying off a 2% mortgage more than needed unless you are like 50+ or some special circumstances.
Interesting poll though.
when it comes to mortgages, as long as people are weighing the total repayment against the home and its equity, not the amount of mortgage you took out initially, then it can be properly assessed.
Using my place as an example, I bought a house for £62k, 10% down payment which goes straight to equity is £6.2k, so a mortgage of £55.8k with a final repayment balance of £83k. The effect here is that just buying a house instantly puts me down in net worth by £21k. then I have to somehow factor in £20k spent on renovations that don’t raise the value of my house until it gets a fresh valuation.
so the purchasing of a house isn’t net-zero because the asset and equity don’t balance out with the mortgage.
£10K to £25K range.
£9K in Gold
Nearly £5K in stock worth
£1K in P2P lending
£9K in “Inventory” (mainly Video games ranging from common to rarities, had to sell stuff for Room Renovation that got me £500 from just 9 Items alone)
£3K in banks
£22K I guess?
If I counted my parents passing down their house to me and my Brother, that’d be another £90K. 
Most people on plan 2 loans are unlikely to ever repay it.
I don’t earn enough to make payments towards my student loan, but I still count it as a debt against my net worth because in the scenario I earn enough money to raise my net worth substantially, I would be expected to pay the debt back in full.
I had 1 month where I did enough overtime and got some bonus pay that I ended up having £4 subtracted from my wage towards my student debt, so my loan is technically a bit smaller than it was originally LOL
I guess the older the person the better off they may be as mortgage etc will be paid off. I think you can forget the student loan as it’s written off after 30 years and the payments are negligible if you’re on a good wage. As Martin Lewis keeps say it’s not a debt, it’s a reimbursement!
debt is a debt, doesn’t matter the form or the timeline. if its not already cancelled or paid off, it still looms over your head. if you win the lottery? you are expected to pay it back, same for if you bag large Capital Gains and you are determined to be earning enough to be expected to pay it back.
the whole point of taking on the debt is to be earning enough so that repaying it isn’t an issue, otherwise there was no point. but it doesn’t stop it being a debt and as such you should always factor it into your net worth assessment.
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Hmmmmm, I get the logic but I am not sure about thinking of it this way. You are factoring in the interest repayments over a 20-30 year horizon, so surely you have to factor in other things if thinking long term. Such as your projected earnings/stock income etc over the 20-30 years. As the interest/repayment you calculated is assuming 20 years in advance, it is not interest you owe now this year. So I would think calculating net worth is best like a company doing it for a given year.
To use your example, mortgage is 55.8k lets say you pay down 5k a year (interest and repayment) and 1k of that is interest, the other 4k is essentially converted to equity. So end of this year your equity goes from 6.2k to 10.2k and you have 1k of interest paid out. So at end of year now you should consider you have 10.2k net worth in your house. Of course realistically you need to factor in cost of sale of asset, current market price etc.
Not sure if I made it clear but what I mean is gets messy if you factor in long term negatives but not positives eg earnings increasing, inflation reducing mortgage in real terms etc
true, i’m only factoring in numbers that are finalised and not open to additional influences. so really, I pay just £3k a year towards the mortgage, and would do so for the first 5years of a 25year mortgage, however only 50% of that goes towards the debt, the other 50% is interest. in all likelihood I will end up moving before paying the whole thing off but end up with a brand new mortgage again. and even if I were to pay it off at the fastest amount you can (annual payments +10% roughly principal cap per year) I would only have covered half the debt after the 5 years.
so for any year of repaying a mortgage, my net worth decreases £1.5k just because of my mortgage as out of £3k, only half of it turns into equity.
So I could reassess my net worth differently depending on how often I am actually going to need checking it, but I would rather use all of the worst case numbers I have at hand whether that is positive or negative and then work upwards from there. I just need to figure out how many things that is before I start making my excel spreadsheet to calculate a specific number.
Yeah I think no hard and cut way to do it, I just like to look on the optimistic side so I wouldnt see your net worth as going down 1.5k, I would frame it as increased 1.5k, as you pay for that with earnings you currently dont have (you get paid each month im guessing) so each year this new earnings previously not in net worth has added 1.5k to your house equity, admittedly 1.5k lost to interest but still I am guessing if you were to rent a similar place the rent ‘lost money’ would be more then the interest ‘lost money’.
Side note, If looking to increase net worth long term I would not recommend paying the mortgage down by more than needed even the 10% penalty free. As say you have 1k extra cash after your safety net savings etc, if you pay off a 2% debt, do you not think the 1k could earn your more elsewhere? Not suggesting risky stuff but over say a 5 year fix mortgage period I would reckon even a conservative dividend pie of 5 dividend aristocrats would make better use of your 1k. Of course this is only as long as mortgage rates are super low, once they rise to like 5%+ this changes. NOT FINANCIAL ADVICE ANYONE READING THIS.
Indeed. That’s why I haven’t tried to reduce all the debts I owe at a rate faster than necessary except for a credit card that was nearing the end of its 0% offer period. That meant I could save and invest more than £4k into my ISA instead with returns around 20% for the year. I am using positive debt as well to help generate greater returns which should in the long run see my net worth approach 0 a bit sooner.
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I think I quite timely closed my p2p account November 2019. I still log in time to time to check if I have recovered any pennies from defaults and sweep that out.
Back when I started p2p, I was easily getting about 6% a year after defaults, but when it dropped below 4% I decided to invest.
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Yep, credit cards are for sure either fine or a urgent issue, if on 0% and paying down then great, if charging interest then first priority to pay down, sounds like you do this too so more for anyone else reading 
and to repeat to myself 
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I did it mainly to diversify my Portfolio. I know it’s likely not as good as Stocks but if I set and forget it I should (theoretically) make a decent amount should my Stocks and Gold plummet. 
Very interesting data! And interesting to compare yourself against your age group peers and other age groups. I’m in the most common bracket among my peers which makes me happy and makes me also feel that we’re doing ok.