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by rgbrenner 1243 days ago
Yes, because those "numbers on a screen" are called dollars.. and we price everything using those numbers. So if the numbers get bigger, people will want more of them when you buy things, including things you need to live like food and shelter.
1 comments

> Musk, for example, has pulled $40b out through Tesla stock sales in the past couple of years. Those are real assets.

Then your future salaries are also real assets, and should be counted for your net worth. The same argument applies, you can take out loans against your future earnings and spend it, so it is a part of your current net worth, right?

You say that maybe you get into an accident so you can't work? Same logic applies to stocks, something might happen and nobody wants to pay for them anymore rendering them useless.

So to make the comparison fair you have to be consistent. Either future earnings are assets, or they aren't, otherwise the comparison isn't meaningful.

You’d have to decrement by projected future expenses and discount for uncertainty (just as we value stocks on future free cash flows [not revenues], and discount for uncertainty).