Do you count unrealized capital gains as part of your income

[SimpleLife]

Whether it be real estate or stocks, do you count asset appreciation as income? Do you total it along with income from your job for a total income?

[ohcanada]

No. Real estate you'd actually depreciate.

[workathome]

If you sell and realize the appreciation, yes.

[SimpleLife]

But it is OK to count unrealized capital gains as part of your net worth?

[JamesR]

Only if it's 100% certain.

[jacob]

No, I would find that confusing.

If you're doing accounting with cashflows, income, and assets, I guess you would/should. I just have a balance sheet and a cashflow statement.

[Dragline]

Not gonna do it. Wooden be prudent.

[Tyler9000]

It counts towards your net worth, but not as income until you realize the gains.

[RealPerson]

Unrealized capital gains are not income. They are part of your assets, so they show up as an increase in assets in your bookkeeping. Dividens and interest income are actually realized income, so they do count as income. You also pay taxes on those if they are not in tax deferred accounts.

[simple aly]

I agree there is uncertainty in thinking of unrealized cap gains as part of your net worth (which it is). However if you hold 100% in cash there is still uncertainty that whatever currency you hold in will lose value against whatever other currency or commodity.

If your asset is clearly overvalued, it may be a problem however.

Just remember that when you realize you will probably be paying tax (but that's your own business).

[C40]

I count investment income and price growth together. At this point it's theoretical income. As I get closer to retirement I'll focus much more in actual income than on price appreciation. I wouldn't count my own house price as theoretical income, just an increase in net worth.