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<p>[QUOTE=&quot;Numbers, post: 715309, member: 11668&quot;]Best of all would be to do both: Deal with what is, and while you&#039;re doing that, use definitions that the rest of the world understands.</p><p>&nbsp;</p><p>So, for example, I bought a generic double eagle some years back at $460, and now it&#039;s worth well over $1000. Therefore I&#039;m certainly better off due to the increased price of gold. But I can be more precise; there&#039;s a technical term for the exact way in which I&#039;m better off. I have an <i>unrealized gain</i>.</p><p>&nbsp;</p><p>I don&#039;t have a <i>profit</i>, because I haven&#039;t sold the coin. But don&#039;t misunderstand me--when I say that I don&#039;t have a profit, I&#039;m not somehow denying that I&#039;m better off or that the coin&#039;s value has increased. The reason why I don&#039;t have a profit is just a technicality in the accounting principles: the gain is not called a <i>profit</i> until you sell. That&#039;s why the term <i>unrealized gain</i> exists--so that we can all talk about &quot;what is&quot; without confusing our accountants. <img src="styles/default/xenforo/clear.png" class="mceSmilieSprite mceSmilie2" alt=";)" unselectable="on" unselectable="on" /></p><p>&nbsp;</p><p>Cloud, you keep using the term <i>profit</i> to refer to *any* old way of being better off than you were before, when in fact that specific word has a more restricted meaning. You and everybody else in this thread are all trying to say the same thing; you&#039;re just using different words to say it, which is impeding communication and agreement greatly. I would gently suggest that you start using the same words that everybody else uses, so that we can all understand each other on the first try. An unrealized gain is a real, actual, perfectly legitimate form of increased financial well-being, but it is not a real <i>profit</i>, because <i>profit</i> is a technical accounting term with a precise meaning.</p><p>&nbsp;</p><p>If you know someone who&#039;s holding on to losing investments because &quot;there&#039;s no loss until you sell&quot;, then you know someone who&#039;s very confused about the difference between accounting and reality. The solution is to go explain that difference to this person, not to increase his confusion even further by sloppy use of language that appears to deny that any difference exists! After all, it&#039;s precisely <i>because</i> accounting and tax law are different from reality that accounting and tax law need their own set of carefully defined technical terms....[/QUOTE]</p><p><br /></p>

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