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Old 11-08-2013, 08:12 PM   #81
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Originally Posted by RetireAge50 View Post
If all houses increase to 3 million does that mean you are financially independent and can retire? No, not unless you want to live on the street or in a home-made RV.

Likewise, if your investments go up to 3 million you can retire and use the money to live independently.

Therefore although the house increases your net worth it does not provide independence which in my opinion is the destination of The Road to a Million.

I have to respectively point out that if *all* houses increase to 3 million, even if your portfolio investments go up to 3MM you cannot retire.

That means your portfolio is worth just as much as an average house, which would be equivalent to about $250K in today's dollars.
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Old 11-08-2013, 08:43 PM   #82
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Yeah, please disregard all my babbling. 😃 This whole discussion has no point anyway as we all know what the terms mean.
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Old 11-08-2013, 08:46 PM   #83
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Yeah, please disregard all my babbling. �� This whole discussion has no point anyway as we all know what the terms mean.
Since when does that have any bearing on an e-r.org discussion?
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Old 11-09-2013, 12:00 AM   #84
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I am a renter for the first time in 32 years, so don't have to enter into the discussion of houses and net worth.

However, my investment accounts equal about $975K today (don't have the data at hand about where I was 10, 20, years ago). Pretty heavy in stocks, probably around 60-70%.

I'm hoping to hit $1 million by the end of the year. Anyone care to predict whether that might happen?
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Old 11-09-2013, 08:51 AM   #85
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You've got to live somewhere. Unless you could comfortably and happily downsize, I wouldn't (and don't) consider home equity in our portfolio. I maintain two numbers 1) investable assets and 2) net worth (including home equity), with the former being the more important number.
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Old 11-09-2013, 09:05 AM   #86
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When we had a mortgage we kept our house out of the back of the envelope net worth calculation, letting the mortgage cancel out the house value. Now that the mortgage is paid off, we just forget to include the house. The only time we ever needed to do a real net worth was to get the mortgage anyway.
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Old 11-09-2013, 09:07 AM   #87
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I am a renter for the first time in 32 years, so don't have to enter into the discussion of houses and net worth. However, my investment accounts equal about $975K today (don't have the data at hand about where I was 10, 20, years ago). Pretty heavy in stocks, probably around 60-70%. I'm hoping to hit $1 million by the end of the year. Anyone care to predict whether that might happen?
Nice! I predict yes.

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Old 11-09-2013, 04:49 PM   #88
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...
However, my investment accounts equal about $975K today (don't have the data at hand about where I was 10, 20, years ago). Pretty heavy in stocks, probably around 60-70%.

I'm hoping to hit $1 million by the end of the year. Anyone care to predict whether that might happen?
Assuming that your 65% equity portion tracks the market and that your other 35% stays flat, that will require a market rise of 3.9%. That is entirely possible, though there's less than 2 months left before the year end. Of course it is also possible the market drops more than that in the same period.

One thing I can bet on is that, if and when you cross the $1M mark, you will be crossing it a couple of times before you can safely stay in the millionaire rank.
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Old 11-09-2013, 10:06 PM   #89
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Assuming that your 65% equity portion tracks the market and that your other 35% stays flat, that will require a market rise of 3.9%. That is entirely possible, though there's less than 2 months left before the year end. Of course it is also possible the market drops more than that in the same period.

One thing I can bet on is that, if and when you cross the $1M mark, you will be crossing it a couple of times before you can safely stay in the millionaire rank.
3.9%? That sounds do-able. Thanks, NW.

I look forward to the ride--and the crossovers!
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Old 11-11-2013, 03:16 AM   #90
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My 2 cents

I retired 2.5 years ago after I hit the 1m mark. I was debt free and my NW included my home. This year I borrowed 200k for a home equity, & invested 100k that pays $1300 a month which covers the loan payment. I used the other 100k to buy two rent houses with a combined positive cash flow of $1200 a month. So my home is producing income and the remaining equity should be included in my NW.

Thank you everyone for this informative discussion and information. This is a great web site that I wish I had discovered years ago.
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Old 11-11-2013, 05:19 AM   #91
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We figured out the same thing. We had won the game in 2007. We are trying hard not to make the same mistake again. We lowered our stock allocation and hope to downsize the house in the current housing bubble market before we see another $300K drop in the home price.

If we buy a house for ~$300K even if the bubble pops again I don't see its price going to zero, so our paper losses won't be as great as they were during the last housing bust.
Housing is so illiquid I don't use it in calculating a SWR but I do consider it in my NW. From my experiences with various relatives, the house is something that should be sold when the people in it can no longer care for themselves and the property. When it isn't, bad things happen. I now consider my house to be part of my long term care reserve. If I manage to piss away my investable portfolio, I have the paid for house to sell as DW and/or I enter the local old folks home.
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