What to you mean by Living Expenses?

[CM]

WealthyDoc wrote:

I loved the A = L + E comment earlier and the questions it started.  Don’t confuse doctors with accounting facts!

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Come on now.

ifonlyFI simply meant that as TotallyBroke earns money and applies it to debt, his/her net worth will increase, which is correct.

[jfoxcpacfp]

CM wrote:

jfoxcpacfp wrote:

WealthyDoc wrote:

I loved the A = L + E comment earlier and the questions it started.  Don’t confuse doctors with accounting facts!

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LMAO – it is E = A + L

I guess you proved your point

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LMAO?

Assets equal Liabilities plus Equity (i.e., left side of balance sheet equals right), as Wealthy Doc noted. https://www.accountingcoach.com/balance-sheet/explanation/4

Also, Equity equals Assets minus Liabilities. This is just a rearrangement of terms.

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LMAO at myself, now. Of course, you are right. I can't believe I did that. I need to get back into bookkeeping again or just stick to taxes...BIG ops:

[RogueDadMD]

Ah, thank you for the additional info.

I went through the initial estate planning phase years ago of making sure I had an appropriate will, revocable trust, etc.  Our types of assets and plans have not significantly changed since then, however it may be worth revisiting things w/an estate planning attorney to discuss this spousal trust that I had not heard about.

I can't say I'm worried, as I think I have a fairly typical situation with a typical current setup, however it would be helpful to learn a little more.

[WealthyDoc]

CM wrote:

WealthyDoc wrote:

I loved the A = L + E comment earlier and the questions it started.  Don’t confuse doctors with accounting facts!

Click to expand…

Come on now.

ifonlyFI simply meant that as TotallyBroke earns money and applies it to debt, his/her net worth will increase, which is correct.

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True.  But I think what Johanna was pointing out (using accounting principles) is that it is the earning of the money that increases the net worth.  If they didn't pay off debt and just stacked up the cash their net worth would climb that way too.  Adding an asset is the same as subtracting a liability as far as the change to net worth.