this post was submitted on 29 Feb 2024
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Economics
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Then you didn't have a NET worth of $1.5m, you had a gross value of $1.5m. net worth is assets minus liabilities. Liabilities include things such as loans and credit card debt. But you're right, having a net worth of $6M doesn't mean they have $6M cash. That's a valid point.
I fully agree, and so does my finance degree, and yet that's the bullshit UBS did and I suspect most banks do when valuating people. I was shocked, but they wanted my business.
Here is another example. I sold the house I bought for $250k. Before I sold it it was being valued by my banks at $1mil+ by using area comps, except that my home was old and modest and the comps were new builds after the old neighborhood homes were demolished. Actual sales price was $475k of which I netted less than $450k. That's over $500k worth of bullshit valuation. Don't even get me started on art, watches, and jewelry.
Right? Sure they're valued at whatever, but who are you going to get to actually pay that much without a storefront to sell it for you?
The old "get it valuated by a paid expert then donate it to a museum for a tax break" trick.
I doubt the museum is interested in my Citizen Eco Drive watch. Haha!