Americans, the Formula Is Easy: More Debt = Less Savings

Yeah, I can see that you are studying it and haven't gotten all that far yet. For one thing, you're looking at everything from a business standpoint only. You've not even considered how individuals treat assets. You're also making the mistake of looking only at simple, flat definitions without considering (not aware of) their broader applications. For example, a company HOPES an asset will produce income but it's possible that it will not. Basing your statements on a capital asset MUST earn income is still very far from correct.

I kept company books for years and also have filed income taxes for dozens of individuals (including myself and I still own three active business) for a very long time. I'm quite aware of what cash and assets are to a company AND to an individual. You're getting there but you still have quite a bit to learn. Just knowing a few terms (and not even thoroughly at that) hardly makes you an expert - yet. Keep going and someday you might get there.

 

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I'm not just looking at the business. Equity can be transfered from the business to the owner. That's where you get your cash (asset) from your work and buy a house (equity). You are transferring your resources from assets into equity. Equity is what you own yourself.

You mean... people who are not accountants?

You are the one who is not considering the accounting principles, not me.

Read...
http://en.wikipedia.org/wiki/United_States_generally_accepted_accounting_principles

"In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e.g. a company, the measurement of which can be expressed in monetary terms. "
http://en.wikipedia.org/wiki/Asset

Not really. The above is the definition I'm using. As I said before, anything with future economic benefit is considered an asset. If you are not using it to make money, then it is not an asset. Capital assets can also be sold for capital gain. That's a feature of capital assets. But capital assets also have the purpose of producing money. If it is not designed to produce money, it cannot be considered a capital asset, even if it can be sold for capital gain.

You don't need to know accounting in order to do accounting. YOu can memorize the whole thing if you wish. But when you know it, then you use the principles to determine the decisions you are going to make. I'm using principles to determine the value of a house you own, and I'm defining it using the principles. I'm not just using the memorized stuff you do.

 

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Finally, you are giving a reasonable definition instead of the nonsense definition you have been posting for weeks. ("That only things that earn income are assets.") - Your false (or at least unique) prior definition is the reason you have proclaimed, even in great letters:

"A house is not an asset."

Do you now agree that even if you only live in your house, it is an asset? For many people, it is their greatest financial* asset, I might note.
---------------------------------
*"Good health" is the greatest asset you can have, but not a financial one. Perhaps when you are older, have learnd more, that too you will recognize as a great asset. I might also note that "good health," like a house you own and live in, can help you avoid large financial expenditures, and in this functional sense, "good health" might even be considered "a financial asset" just as a fire insurance policy on your house might be, even though you hope it is only a continuing annual expense.

 

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That wasn't my definition. Where did I say that?

A house is not an asset. Unless you are in the business of renting houses....

No, I don't agree.

An asset is something that produces positive cashflow. You can sell and asset for capital gain, but the prupose of the asset is to produce positive cashflow. When your assets produce negative cashflow, then you have a loss. It's all pretty simple...

 

many times, even in this same post:

I may have said "income" instead of "positive cash flow" that is the only difference, and I am to lazy to go back thur pages of all the times you have used different words that all require "asset" to be "productive financially" and disqualify OWNED gold bricks or houses from being "assets" because they provide no "income" "positive cashflow" "financial yield" "monetrary return" or any of a dozen other ways to make the same requirement in your silly, unique, personnel, definition that rules out gold bricks and the house you are living in as assets.

I also note you have never told at what instant and why the non asset house becomes an asset, as I requested you to. I gave at least six points of time inthe typical sequence for you to select, starting with when neigbor sells his identical house for more than I thought mine worth and ending when the sale was recored in the county court house, but if it is at some other instant, please feel free to define that instant.

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this also reflects your total lack of logical thought. One computes capital gain by subtraction. You admit the house just sold was and asset, but a few days before it was not an asset. So effectively you know how to make subtraction between different types of categories or classes. Thus please complete for me 5 apples - 3 oranges = ?

If the house you bought was an asset at the instant you bought it (so the capital gain subtraction is not illogical subtraction between different classes), then when did your newly purchased house cease to be your asset? If you like, I can again suggest answers such as:

(1) First time you turn the key in the front door....

but this seems to be pointless with one as stuborn as you. I know from our prior exchange when you were proclaiming equally false things about calculus that you are not capabable of learning standard definitions and views so I will let it drop rather than waste time trying to help again.

 

Yes, because of its purpose. The key is not whether it has positive cashflow or not, the key is the purpose of the object in question. If the purpose of the house would be to aqcuire financial gain, then it should be considered an asset because that's the whole point of an asset.

A house becomes an asset at the point where its purpose becomes to obtain financial gain. If you own it, but its purpose is not for financial gain, then it should be equity.

 

Your house is an asset if it is a real estate investment. The key word here is investment. Assets are investments, not things that you own for yourself.

 

Slowly loosing ground and backing down, aren't you?

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It's really amusing to see you admit you were wrong before when you presented, in no uncertain terms with no qualifiers, this statement in big letters:

""2. Mortgages -- Home ownership is an asset that can build equity and net worth."

YOUR HOUSE IS NOT AN ASSET!!!!!!!!!!!!!!!! "

So you finally concede that you lost round-1.

And that's not all. The title to a piece of real estate (land) that you also claimed was not an asset actually is by your admission above because it, too, is an investment.

Now you've lost round-2.

And the gold bricks in a safe deposit box are also investments (expecting an appreciation in value) so they are assets as well.

Hmmmm... that's three rounds you've lost.

Shall I continue or have you eaten your fill of crow for one day?

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What!? What are you talking about? I'm saying exactly the same thing I've always said: if you use it for yourself, it is not an asset. If the purpose is sepcifically an investment, then it is obviously an asset! :bugeye:

Where did I admit I was wrong? What are you smoking kid? :bugeye:

Ahhh... no. Your house is not an asset. Unless, of course, you are investing in real estate. :bugeye:

Not if you are using for yourself.

You are an idiot desperate for approval.

Yes they are. Have I ever say they weren't? WHy do you think I didn't comment on it?

I'm starting to doubt you actually have a brain...

 

Ha-ha-ha! You are such an idiot! You've contradicted yourself so many times it's hard to keep count. And thanks for calling me a kid - that's nice for any 60+ guy to hear.

Speaking of contradicting yourself, I've seen you do it in other threads also. You should be more careful - it's a nasty habit and certainly hurts your credibility.

 

I have never contradicted myself. I have said that your house is not an asset since the beginning. It is not an asset because it is not an investment. In order for something to be considered an asset, it has to be an investment, because only investments have future benefit.

You are retarded. You don't know what to say so you just try to put me down and invent that I'm contradicting myself. Stop acting so desperate and just accept you are wrong. Otherwise, this is just a waste of my time and I'm not interested in that. :bugeye:

 

Nope, no retardation on my end of the net. I understand though; you are NEVER wrong, are you?

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Protest all you want. Anyone that bothers to read through this thread can easily see how you've tried to wiggle out from under things you said earlier. You're fooling no one but yourself.

 

What are you, some kind of moron? Under the balance sheet definitions you've been using up until now, investments are specifically delineated from assets. At any rate, you've got fixed assets (houses) confused with current assets (income from rental or sale of houses). Read this, and then shut up about this topic forever:

http://en.wikipedia.org/wiki/Asset

 

By what you have been saying, it is you that is never wrong, eh?

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Anyone with a brain cell can see you are stupid and knows anything. :bugeye:

 

Oh yeah! Now, income from rental or sale is reported on the balance sheet!!! Under current assets!!!! Wow! That was by far the most fantastic one I've heard so far! :bugeye:

Ok, this is enough. I've never seen so much stupidity together. I'm just waiting my time in this thread. I'm not interested in talking to retarded people. :bugeye:

 

Now you're not even making any sense.

Idiot.

 

The only one here that's "retarded" is you. Someone gives you a good reference that blows away the very narrow definitions you've been trying to use. And that proves that you know far to little of what you've been claiming. And what do you do then? Run away like a little kid with his hand caught in a cookie jar. Grow up a little, dummy!

 

Jesus Christ....

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First of all, I had already posted the link he gave me before, proving my point. Second of all, putting income in the balance sheet like he said is retarded. Like.. one of the most basic things of accounting is to put your income in the income statement. Duh!

And you agree with him, which only serves to prove that you are a complete retard who have no idea what accounting is. :bugeye:

 

Truthseeker,

What I really don't understand is how you make your balance sheet balance by listing a house under equity rather than as an asset. Remember: Assets = Liabilities + Equity. So If I have a home that is worth $150,000 and a $100,000 mortgage, according to you I would have $250,000 worth of assets which is wrong.

Because a home really is an asset, I have $50,000 worth of equity, which in turn
makes the balance sheet balance.

$150,000 (value of the home/asset) = $100,000 (mortgage/liability) + $50,000 (equity)