Posted on 02/01/2006 8:49:13 AM PST by Toddsterpatriot
An asset has value, if it's value goes negative it's ceased to be an asset and become simply a liability.
I was quoting the part of the definition of asset, which is pertinent to the discussion of savings and which tod had ignored. I was not claiming that was the explicit and complete definition.
You're welcome.
Maybe in a previous life I taught slow children or protectionists. But then I repeat myself.
From Article: Securities Industry Association reports that individual participation in the stock market has jumped from 30.2 million in 1980 to 84.3 million in 2002
Well, for starters, when tax rates are cut! This frees up individual investors and savers...to... SAVE AND INVEST!
And President Bush squashed (thank GOD) the Dem "double-digit" taxation on dividends, thereby spurring more savings/investment dollars. A natural incentive -- not like the "incentives" Dems build into practice which reward themselves and their allies; but hurts the private sector.
It just really ticks the Dems off to see the "invisible hand" working again.
So Mr. 5452, you derive income from your assets by the fact that you rent out property you own. Correct?
So, if all your tenants moved out or lost the ability to pay, would you no longer classify your properties as assets?
No. From your definitions
A resource having economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit
A balance sheet item representing what a firm owns.
Assets are bought to increase the value of a firm or benefit the firm's operations
Fixed assets are those that are expected to keep on providing benefit for more than one year, such as equipment, buildings, real estate, etc.
Tell me again a car doesn't fit into those definitions. Thanks.
When I read the above, I imagined any number of my former professors, with raised eyebrows, saying "Mr. Rudeboy, that comment makes me want to check your status with the Registrar's Office."
Wrong. A car is an asset whether it is paid for or not. You shouldn't combine assets and liabilities, it's bad accounting.
It's debt, not savings.
Your debt is $18,000 your asset is $16,000.
Personally, I can't remember the last time I spoke with someone who actually bought a new car for cash.
Nice to meet you, I paid for my last car with cash.
An asset is something that you can PROFIT from if you SELL them, or that generates positive cash flow.
Wrong.
By the time a car is paid off enough to have it qualify as an asset, it's value has typically depreciated so much that it's a negligible asset at best.
But an asset nonetheless. Please tell x5452, he's still confused.
It's almost impossible to regain your investment from an automobile, and they cause a net reduction in your lifetime savings.
Who said it was an investment? Who said it was savings? It's an asset.
Don't be an asset.
yes it is a liability it goes in a different column on the balance sheet. Goes back to that whole accounting thing we've been talking about.
Assets
Car
Liabilities
Car Loan
Income
0
Expenses
Car Loan
Gas
Oil
Maintainance
If you owe more on the asset than the resale value of it, it's net worth is negative.
That's funny. Wrong, the asset has a positive value, it's you that have the negative net worth.
When I referred to a car having a negative value, I was thinking in an economic sense, and not an accounting sense. "Dismal science," and all that.
Should the resale value of the car be counted as savings by the government? (This is a carry over mind you, when this began it was about houses not cars)
An asset at zero does not have a positive value. It has literally 'no value' it ceases to be an 'asset'.
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