Keep in mind that the cops don’t have to provide you with their reasonable suspicion in order to demand ID. It’s not until court that they have to provide their reasonable suspicion. So they have plenty of time to come up with justification after the fact.

Also, on the Fifth Amendment I thought I had read somewhere about a case where a man simply remained silent and never once invoked his right and it didn’t end well for him. I cannot remember the details, but for some reason I thought that you still had to invoke the fifth even if you have not yet answered any questions. I’ll have to look back into this later and post back if I find the story.

I could see how it would be an affordable way to attention to a problematic bill (if it was still done as @[email protected] stated).

Congrats on making it that far! I’m sure you’ll have a fully funded emergency fund before you know it. I hope no emergencies come up while you build it, but if they do, don’t let that discourage you!

I think you give a fair explanation of Dave in this comment. I definitely think much of his “baby steps” needs to be updated. Just for example, $1000 in savings is just going to cause someone to get further into debt when an emergency comes up.

I like the 20/30/50 rule for budgeting (20% saving, 30% fun and 50% needs). If you have bad debt (consumer debt, bad auto loan, etc), then minimize your fun spending the most you can in order to wipe out that bad debt as quickly as possible. But of course also save up at least on month of needs or your largest deductible (whichever is greater). Then once the bad debt is gone save up a 3-6 month emergency fund (according to your personal risk/comfort level).

I also think it’s important to not be too hard on yourself. Some months you’ll be over budget and some months you will be under. That’s why I think it’s important, like you said, to leave some room in the budget and not get caught up in zero dollar budgeting.

I agree with all of those. Some of my favorite clothing I’ve gotten thrifting. I’ve been able to find never worn brand name clothing for way cheaper. Heck. I recently got a pair of Eddie Bauer shorts, never used (still had the baggie with spare buttons attached to the waistband), for $5.

Video games. Unless it’s a game I play with friends I typically wait for it to drop in price significantly.

Ditto. They also smelled worse too. We found that the Target brand diapers when Target has their gift card deals was the time to stock up on their whipes and diapers.

I wish I knew what I was doing because I very rarely get that stuff, unless I go to Shorts. Then that crap shows up in both the Shorts and my recommendations. After ignoring them for a couple days they go away and stay away as long as I also avoid Shorts… So maybe that’s the key?

Maybe if I put this another way I can get some clarification on your position?

You have two people. Person A and Person B. Both have emergency funds in savings of $20,000. Person A has a 401k currently worth $500,000. Person B has a pension currently with a cash lump sum value of $500,000. Neither has any real estate, nor other investment accounts, but neither has any debt either. I would say they have the same net worth of $520,000. If I’m understanding you correctly, you would say Person A has a net worth of $520,000 but Person B has a net worth of $20,000. And it would be illegal and against accounting rules to include Person B’s pension in net worth calculations.

I’m seeing plenty of resources online that even go so far as to include instructions for finding a value of the pension for calculating net worth.

https://livewell.com/finance/how-to-calculate-value-of-pension-for-net-worth/

https://www.sapling.com/12011834/factor-pension-net-worth

https://networthcalculator.io/calculate-pension-in-net-worth/

https://www.lazymanandmoney.com/pension-net-worth/

And then this article finally showed up on my third page of results when searching for “do you include pension in net worth” and it at least mentions that it’s debatable whether to include it or not. And this article is for Canada. https://www.moneysense.ca/columns/ask-moneysense/should-you-include-your-pension-in-your-net-worth/

This is why I’m so confused. And you’ve been the most adament that it’s a big no-no. I’m not trying to argue with you. I’m seriously confused and trying to understand what I’m missing.

Yeah…that doesn’t answer my question. That only answers how the IRS treats income from the pension.

You can derive income from assets can you not? Am I misunderstanding assets? I would view rental property as an asset and you can get income from that. I would view a 401k as an asset and you can get income from that.

If I say I’m worth $500k more because of my pension. How does that have anything to do with the IRS?

I missed this commment. Sorry. Also, I have talked to accountants and financial advisors that work with our union. I think because a lump sum is an option they all treat it as an asset when discussing net worth.

And I’ve mentioned several times that I understand income is not an asset. I have also mentioned several times that the pension was treated by other professional financial advisors and accountants as an asset (probably due to the lump sum option). I’m sure its treated differently if they don’t take the lump sum.

I get that if you are drawing on a pension and didn’t take the lump sum that it would be income and thus not an asset. What isn’t so clear to me is whether a pension that you are not drawing on yet but offers an option of a lump sum can be considered an asset for the purposes of calculating net worth.

Edit: I appreciate you taking the time to explain some of this. Might I suggest though that you take a little more care in how you talk to people? You’re coming off very rude. Maybe that’s just me reading into what you’re saying, but if someone spoke to me like this in person or via email, I’d walk away.

So now you’re back to saying that it is a legal definition. You’re confusing me more. You initially said pensions are legally defined as income. Then you said that legal wasn’t the right word and even edited that out of your comment. Now you’re back to saying there’s decades of laws. If you don’t know whether it’s legally defined as income then how am I supposed to know it?

Everything I’m finding online seems to indicate it can be viewed one way or another depending upon opinion and whether a lump sum option is available. You seem to be saying its always income? You haven’t clarified the lump sum option and how a pension with that option should be viewed from your opinion. And from an, albeit quick, look online I can’t find legal resources that indicate it is a hard rule. Even the link I provided and even the details you highlighted from that do not say its always a hard rule that all pensions are always income and never an asset.

I know one case doesn’t change decades of laws, but I can’t easily find these decades of laws and accounting rules. Most of what I’m finding when trying to look talks about the accounting for managing the pension itself and the assets of the pension which obviously doesn’t answer the question at hand.

So all of that said, do you have a resource you can point me to in order to help educate myself in the legal and accounting rules for how to treat pensions for individual finance and not something from the corporate finance side? Not that I don’t trust you, but we are both strangers on the internet after all.

Can you provide a source corroborating “legally it is not an asset?”

Here’s a source with case precedent that contradicts that in Massachusetts (appeals court vacated a decision to consider a pension as income): https://www.fitchlp.com/blog/2021/11/should-a-pension-be-considered-an-asset-or-a-source-of-income/

So this might be a thing that varies from State to State. And it might also depend upon the type of pension. Some pensions you can take a lump sum. It’s not always a fixed income as you stated. It sounds like you might know more than me on this subject, but I’m not finding separate resources that fully agree with you. Most sources seem to indicate it could be considered an asset or it could be considered income.

I guess I’m just surprised that so many people don’t view a pension as an asset and only view it as income. After the conversations here I did some reading and it looks like there’s not a consensus on whether to include a pension in net worth calculations. That being said there isn’t a consensus about including home value in net worth calculations either.

I suppose my question would be how do you define net worth? Would you agree with the other user who seems to define it as assets that can be left to survivors minus debt?

I have always thought of net worth as total assets minus total obligations/debts and would view a pension as an asset.

So you define wealth as only that which you can leave to survivors? That makes sense. I did some reading and it appears including pension in net worth calculations is something that varies among financial advisors. Some don’t even include the value of your home since you can’t readily access the value of that.

I’ve always thought of net worth as total assets minus total obligations/debts. And I view a pension as an asset. But given how you’re defining wealth, that makes sense why you would opt not to include a pension in net worth calculations.

Nothing is the issue. I don’t want something extra. I’m trying to gain understanding through conversation. Repeating to me that income isn’t part of net worth doesn’t help me understand. I have done some quick reading and it appears you can indeed include your pension in your net worth calculations. It isn’t necessarily just income. Seems different financial advisors handle pensions differently. Just like with a house. Some will include the value of a house in net worth, some won’t because the value of the home is not liquid.

Either way that wasn’t my original point. My original point was that the upper comment never said that including pension in net worth would turn him into a billionaire. And I was also trying to make the point that a complete picture should be provided so that some people do not simply dismiss the article entirely for one missing detail (as people will and often do use any excuse they can to change their mind).

I hope that clears my position a little. I’m not trying to argue despite what you and others might think.

My point was that leaving details out gives people an excuse to dismiss the entire point of the article. I was looking at it from the perspective of changing and winning minds. People will look for any way to resist changing their minds.

I’m not upset. The other commentor might be. But I’m not.

I guess I always thought you included retirement accounts in net worth because they carry a cash value even if it hasn’t been cashed out yet. Just like you would include shares in a company in someone’s net worth even if they hadn’t sold the shares.

Perhaps pensions are slightly different. Everyone I work with who opted for the pension over a 401k includes their pension in their net worth and, to my understanding, so do the financial planners that work with the Union.

Sure. But I guess I’m just thinking that a retirement account (be it a Roth, pension, etc) has a cash value that should be a part of one’s net worth. Just because it hasn’t been cashed out yet doesn’t mean it has no value.

Just as I would include shares of a company that someone owns but hasn’t sold as a part of their net worth.

I agree to your last comment about it being refreshing that he’s not some elite like so many others. Sorry that wasn’t clear.