Friday on my mind

Here's a thought experiment for you.

Suppose that you own a regular house in a regular suburb.  One Sunday, you wake up, and you think to yourself - "I like this house, I think it's worth $500,000.  Yes, I wouldn't sell it for any less than that."

On Monday morning, for whatever reason - it doesn't actually matter why - your next door neighbour, who's house is practically identically to yours, comes over to your house and says "Today I am leaving, and I'm giving you my house. Here's the title.  It's yours".

On Tuesday morning, a man appears at you door, and offers you $500,000 for your house.  You seriously consider it, and tell him that you'll think about it, and get back to him.  You also point out that you own the house next door.  He leaves you with his offer.



On Wednesday morning, he returns, and says "I'll give you $1,000,000 for both", and you again tell him that you'll think about.  On Thursday, you call him and tell him that you'll accept his offer of $1,000,000.  On Friday, you exchange the titles for a suitcase full of cash.

To recap, on:

• Monday you got given the house, on 
• Tuesday you received an offer for your house, on 
• Wednesday you received on offer for both houses, on 
• Thursday you accepted the offer, and on 
• Friday you completed the deal, and received the cash.

The question is: On what day of the week do you consider that you are a millionaire? 

Was it Monday, when you received the 2nd house, and had 2 assetts that you valued at $1,000,000?  Was it Tuesday, when your valuation was confirmed by "the market" in the form of a partial offer, or Wednesday when you valuation was confirmed by a full offer?  Or was it Thursay, when your agreement was reached, that you would trade your assets for $1,000,000, or was it Friday, when you actually had the cash in your hot little hands?

How valid is your valuation?  Is it real?  Do you trust it?  Or, does it need to be validated by the market?

Does it mean that you can "think" your house to be whatever value you like?  If you suddenly think it
is worth $2,000,000, does it make it actually worth that much?  Or is that meaningless?  What if
you value your house at $550,000, and no-one else in "the market" does?

So, what's the answer?

To be continued... 

Update: Continuation here.