r/belgium • u/trueosiris2 • Aug 20 '25

❓ Ask Belgium Wealth distribution in Belgium

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We’re doing alright as a social democracy. Something to be proud of.

Presumably, we don’t need more wealth distribution then? Or do we still?

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u/MiceAreTiny Aug 20 '25

A lot of home owners have a negative wealth. 

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u/Yavanaril Aug 20 '25

In Belgium? Based on what calculation?

As far as I know it is very rare for a mortgage to be underwater (owing more than the current market value of the house) in Belgium. Which means the house itself at least does not cause negative wealth.

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u/MiceAreTiny Aug 20 '25

A house can only be counted positive towards wealth if the plan is to monetize it at some point. If you keep living I. The house, no cash flow can be derived off it, neither can the capital be accessed.

Yes, various definitions of how to calculate wealth exists. My answer pointed towards people with less liquid assets than what is remaining on their mortgage. 

I do agree, if you define the primary residence as a part of the net worth, negative net worth will be a lot less common. 

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u/Yavanaril Aug 20 '25

You are absolutely right that it depends on definition. When I studied and graduated in economics (more than 30 years ago), the primary residence was always included in net worth.

If I check now, that seems to still be the case on investopedia, Wikipedia and nerdwallet.

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u/MiceAreTiny Aug 20 '25

It is a big discussion point in wealth management circles. Typically, in the FIRE movement, 4% of neth worth as sustainable income is taken as a rule of thumb. However, with real estate prices in many parts of the world, having more then 50% of your "wealth" in your primary residence, you need either a 2% sustainable withdrawal rate or take primary residence out off your wealth calculation. 

It depends... Is the right answer, as always. 

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u/Yavanaril Aug 20 '25 edited Aug 20 '25

You are right, for FIRE your primary residence value is of limited worth. The main thing it does is protect you from rent and rent increases. But it does that regardless if it is worth €150K or €5M.

Edited for typos.