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Re: Home to net worth %??
Old 08-22-2006, 12:46 PM   #41
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Re: Home to net worth %??

5 years ago when I bought my house (put 20% down) it was only 25% of my net worth and then prices went up about 20% per year. Now my (paid for) house is 50% of my total net worth. Is that bad ? I'm pretty happy even though the %% don't look as good as they did 5 years ago I am much better off now.
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Re: Home to net worth %??
Old 08-22-2006, 02:26 PM   #42
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Re: Home to net worth %??

16% here where NW includes the house.
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Re: Home to net worth %??
Old 08-22-2006, 02:49 PM   #43
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Re: Home to net worth %??

House = 100% of net worth.

Purchased house three years ago for a little less than 1x current annual salary.

I'm 26 though and have a lot of debt. Lots of assets minus lots of debt equals a smallish net worth. The house is below average in cost for the area and I bought it at ~30% off from the surplus property department of the city.
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Re: Home to net worth %??
Old 08-25-2006, 02:05 PM   #44
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Re: Home to net worth %??

House is 16% of networth. We don't count it for retirement income purposes since we will not be using the equity from it to live on. Once we downsize in a few years whatever is left over after we buy a new home will be invested or just used to live on to avoid cashing out other investments.
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Re: Home to net worth %??
Old 08-25-2006, 02:05 PM   #45
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Re: Home to net worth %??

Double post........darn network!
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Re: Home to net worth %??
Old 08-27-2006, 12:16 AM   #46
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Re: Home to net worth %??

12% of our networth which includes the value of the house.
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Re: Home to net worth %??
Old 08-27-2006, 06:58 AM   #47
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Re: Home to net worth %??

Home as % of Net Worth = 14%

Home + Vacant Lot (technically a "home" category asset as it generates no returns beyond intrinsic value appreciation, if any) as % of Net Worth = 27%

Bought the home cash 10 yrs ago. Somehow, I sleep better under a mortgage-free roof. Bought the land for $154k at 10% down 15 yrs ago. Paid it off a couple of yrs back and the plot has doubled in value. Secured a $250k credit line on the vacant lot to consolidate petty debts and have paid this off too. The credit line remains just in case.


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Re: Home to net worth %??
Old 08-28-2006, 04:20 PM   #48
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Re: Home to net worth %??

Quote:
Originally Posted by Zipper
Yes. A paid off house should be included in net worth.

Yes. Liquid assets should be double or more of the house value.
This seems about right. If we assume a 4% SWR and use the old rule of thumb that housing costs should be about 1/4 of your gross income; and futhermore assume that property taxes, insurance, and maintenance run about 2% per year of the house's value, we get Zipper's result.

Example:

liquid net worth = $1,000,000

4% SWR = $40,000

1/4 of SWR = $10,000

Value of house = $10,000/0.02 = $500,000
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Re: Home to net worth %??
Old 08-29-2006, 06:56 AM   #49
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Re: Home to net worth %??

Just coincidentally, our house is about 33% of net worth - owned outright.
But I certainly can't say that that % figure is what it "should" be. We could live OK in a house worth less.. it depends, too, on whether the value is realistic or due a hot market that could go down soon.

The thread about the NJ housing prices and RE taxes was scary!

I got sucked into a blog called whyihatedc.. the guy showed this house:



Quote:
I was walking in my hood the other day and passed by a house that was for sale, and I thought to myself, "Self, knowing this neighborhood, we obviously would not be able to afford that house." But if I could, this place would be perfect. It's nothing fancy; just a little three-bedroom job, clearly built a long time ago, near Metro, basically equidistant between my office and my wife's school. It probably needs some fixing up, but it's a nice old little house where I could, on a day like today, grill up some hamburgers in the yard while listening to a ball game on the radio.

Out of morbid curiousity, I looked up the house's listing on the "information superhighway," figuring the asking price would be in the $350K-$450K range.

Wrong. $665,000.

For real. Oh, and it's a 73-year-old house.
http://whyihatedc.blogspot.com

What is the world coming to?
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Re: Home to net worth %??
Old 08-29-2006, 07:38 AM   #50
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Re: Home to net worth %??

Quote:
Originally Posted by ladelfina

The thread about the NJ housing prices and RE taxes was scary!
. . . .

What is the world coming to?
A few rich people will do great. For lots of other people who are now middle class -- a move further toward serfdom/wage-slavery, especially young people trying to support a family. Working couple, long hours, child care expenses, education expenses, health-care expenses, and so forth, with very little in the way of economic rights or a safety net.
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Re: Home to net worth %??
Old 08-29-2006, 07:52 AM   #51
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Re: Home to net worth %??

Home value 5% of net worth!
In Rust Belt
30 year old Ryan built home, Northeast Ohio!

Paid $75k in 1983


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Re: Home to net worth %??
Old 08-29-2006, 10:12 AM   #52
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Re: Home to net worth %??

Renting isn't necessarily any better:
Quote:
Nationally, the average wage needed to rent a two-bedroom home is $15.78 an hour, up from $15.37 an hour in 2004.

On average, renters earned $12.22 an hour -- not enough to afford a two-bedroom apartment in nine out of every 10 markets.

The report quoted Sheila Crowley, President of NLIHC, saying, "The disparity between what people earn and what even modest rental housing costs grows larger each year."
From the end of 2005, bolding mine.* http://tinyurl.com/hz5fk

There's got to be a limit, or does there??


If median US household income is $44k, then the 3x income rule-of-thumb is also out of whack (at $132k). There was a previous thread on this which I'll go back and re-read.

My house at 1/3 of net worth but 14x my $40k planned w/d is probably "too expensive"!*
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Re: Home to net worth %??
Old 09-09-2006, 04:30 PM   #53
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Re: Home to net worth %??

Quote:
Originally Posted by cardude
I'm trying to get an idea what a "normal" home value as a % of one's net worth should be.

For instance, if someone has a $1,000,000 net worth, what would you say the maximum one should spend on a home??

My wife wants a new home is the reason I ask...................
The most important words in your post are "my wife wants a new house" - I suggest you get her one!
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Re: Home to net worth %??
Old 09-09-2006, 05:59 PM   #54
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Re: Home to net worth %??

Home is approximately 10% of net worth which is calculated without the value of the home. Comprehende?
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Re: Home to net worth %??
Old 09-09-2006, 07:12 PM   #55
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Re: Home to net worth %??

I got sucked into a blog called whyihatedc.. the guy showed this house:


http://whyihatedc.blogspot.com

What is the world coming to?
My Irish cousins visited Washington last year and thought house prices were a bargain!

For a hilarious socioeconomic analysis of current Irish society, read "The Pope's Children" by David McWilliams (www.davidmcwilliams.ie/).

Meadbh
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Re: Home to net worth %??
Old 09-09-2006, 07:21 PM   #56
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Re: Home to net worth %??

Home is currently ~8% of NW and is mine, all mine!

With a planned ER date of 2013, I have identified my retirement location of choice and am researching the markets there. I plan to wait for the property market to setttle (no signs of that yet in Canada but I have 7 years!), then buy at the most advantageous time, for cash. If this is prior to ER date I will rent the place for income until I am ready to move, then sell my current home. As I live in Canada, there will be no tax on capital gains of my primary residence.



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Re: Home to net worth %??
Old 09-10-2006, 03:47 AM   #57
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Re: Home to net worth %??

Quote:
Originally Posted by Zipper
Yes. A paid off house is peace of mind when you are retired.

Yes. A paid off house should be included in net worth.

Yes. Liquid assets should be double or more of the house value.
It depends for what purpose and why you are figuring your net worth .For estate tax purposes i would count it,for a loan a bank would count it.
I prefer not to count a personal residence in net worth for retirement purposes unless i was ready to liquidate it.If i was taking a loan against it i would subtract out the loan though..I wouldnt count it anymore than i would subtract off my net worth* my future rent payments if i didnt own a house .A home is a consumption item until the day comes that your no longer consuming it.I have some origonal art work on my walls which i love.I dont count that either .Maybe one day ill want to sell them,at that point i would count it,same goes for jewelry.
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