Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-10-2010, 01:40 PM   #121
Thinks s/he gets paid by the post
grasshopper's Avatar
 
Join Date: Oct 2010
Posts: 1,669
Did the megacorp move 7 times in 11 years, most were buyouts, the others we make some bucks on. Bought our retirement home paid it off in 5 years. Lakefront, palms, orange trees dock, boat. We sold the lakeside house one year after we retired. Got tired of the place and wanted to downsize to the country. Paid cash for the current homestead small, but nice in a destination with 10 lots I could sell if I wanted. About 15% of NM.
__________________

__________________
grasshopper is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-10-2010, 02:10 PM   #122
Recycles dryer sheets
 
Join Date: May 2005
Posts: 189
I don's care how much is my net worth is tied to my house because it will not be available as I wish to live in my (future paid up) house as long as possible. I am not yet retired but my future estimate of living expenses does not include rent, only house ins/maintenance.

But if it comes to worst there is always a possibility of taking money out either by renting/downsizing/reverse mortgage.
__________________

__________________
landover is offline   Reply With Quote
Old 10-11-2010, 10:06 AM   #123
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,714
Send a message via Skype™ to kcowan
Quote:
Originally Posted by landover View Post
But if it comes to worst there is always a possibility of taking money out either by renting/downsizing/reverse mortgage.
This is the tragedy of the current US housing market. No lavish nest egg to cash in.

House becomes just another living expense item.
__________________
For the fun of it...Keith
kcowan is online now   Reply With Quote
Old 10-11-2010, 11:16 AM   #124
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Quote:
Originally Posted by kcowan View Post
This is the tragedy of the current US housing market. No lavish nest egg to cash in.

House becomes just another living expense item.
Still waiting for the housing bubble to hit my neighborhood...

My theory is that fuel prices in the future will make my relatively close-in house, near a commuter rail line, worth more, compared to the sprawling expanse that is DFW.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 10-11-2010, 11:47 AM   #125
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by kcowan View Post
This is the tragedy of the current US housing market. No lavish nest egg to cash in.

House becomes just another living expense item.
Although for some, today's bargain priced housing represents an opportunity to buy and live in a home/location during RE that could not be afforded at bubble prices. I think it depends on your individual situation regarding what you currently own (or not) and what you'd like to own for retirement.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-11-2010, 05:05 PM   #126
Recycles dryer sheets
 
Join Date: Apr 2005
Posts: 463
Quote:
Originally Posted by kcowan View Post
This is the tragedy of the current US housing market. No lavish nest egg to cash in.

House becomes just another living expense item.
And that was what made me start this thread, seven pages ago. Americans are unique in generally believing that a house is their best investment, that renting just means throwing your money down a rat hole, etc.

It sounds like most people on this board have been very prudent, which is wonderful. OTOH I keep meeting people for whom their house is their only "investment" who were counting on downsizing and relocating in order to retire. In many cases, not gonna happen, and with the new scandal over foreclosures more unraveling of the RE market may be on the horizon.

In my case, the right answer for now to "how much of net worth to tie up in a house" is none. Happily renting here in Mexico, would only buy here (or in the U.S.) if a perfect place representing less than 10% of net worth dropped into my lap.
__________________
kevink is offline   Reply With Quote
Old 10-11-2010, 05:30 PM   #127
Thinks s/he gets paid by the post
GregLee's Avatar
 
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
Quote:
Originally Posted by kevink View Post
In my case, the right answer for now to "how much of net worth to tie up in a house" is none.
I am an opposite case. Essentially all my net worth is in my house, not counting my pensions. I had some modest investments back in 1994, when I was renting, and when I saw my rent going up, my investing stopped (no more money), I cashed in my investments to make the down payment on a house. I paid off the mortgage in 2004, and then, without those mortgage payments, managed to pay down my credit card debt. So, starting retirement, I have the house, no rent, no debt, and pensions sufficient for living expenses. No investments, except a little for emergencies.
__________________
Greg (retired in 2010 at age 68, state pension)
GregLee is offline   Reply With Quote
Old 10-11-2010, 06:50 PM   #128
Recycles dryer sheets
 
Join Date: Oct 2010
Location: Chicago suburbs
Posts: 109
32% of NW. Home ownership free and clear over renting without doubt. No rent, obviously, with real estate taxes / utilities / maintenance still considerably less. Pride of owning and controlling your own place is huge. And it's the emergency fund of last resort that you get to enjoy while you don't need it.
__________________
Richard8655 is offline   Reply With Quote
Old 10-12-2010, 12:33 AM   #129
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,616
Quote:
Originally Posted by GregLee View Post
I am an opposite case. Essentially all my net worth is in my house, not counting my pensions.
"E komo mai Hawaii"...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 10-12-2010, 05:09 AM   #130
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
This could be characterized many ways.

If I exclude pension and SS due to us...

and calculate House + Tax advantaged (without income tax paid) + Taxable (and exclude taxes owed on securities with unrealized gains). Then House + Tax advantaged + Taxable = 100% then the house (which is paid off) is about 13% of our holdings... but there is a tax obligation for unrealized gains.

If I setup a projection of our yearly income tax bracket and subtract it from tax deferred assets as income tax owed and cap gains due on taxable... the house would be about 15 to 16% of our net worth.
__________________
chinaco is offline   Reply With Quote
Old 10-12-2010, 06:45 AM   #131
Full time employment: Posting here.
 
Join Date: Feb 2009
Posts: 886
Quote:
Originally Posted by GregLee View Post
I am an opposite case. Essentially all my net worth is in my house, not counting my pensions. I had some modest investments back in 1994, when I was renting, and when I saw my rent going up, my investing stopped (no more money), I cashed in my investments to make the down payment on a house. I paid off the mortgage in 2004, and then, without those mortgage payments, managed to pay down my credit card debt. So, starting retirement, I have the house, no rent, no debt, and pensions sufficient for living expenses. No investments, except a little for emergencies.
Take the rental value of your house and compare it to the pensions. That tells you your cost of housing as a percent of income, which is essentially the same figure
__________________
Emeritus is offline   Reply With Quote
Old 10-12-2010, 10:32 AM   #132
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,526
Quote:
Originally Posted by kevink View Post
OTOH I keep meeting people for whom their house is their only "investment" who were counting on downsizing and relocating in order to retire. In many cases, not gonna happen, and with the new scandal over foreclosures more unraveling of the RE market may be on the horizon.
I recently found one of these types. Two blue collar workers, no education beyond high school. They bought a $400k house (in a non-bubble area) at the peak of the bubble, of course financing 100% (verified from public recording of deed of trust and tax records) with what was probably a no-doc liar loan (not verified, just speculating based on what I know).

Fast forward a few years and his home has declined $80-100k based on comparable sales. And it is a new neighborhood with deep inventories of unsold spec homes, and recent buyers looking to get out, and foreclosures. I estimate the mortgage+taxes+insurance+HOA consume around 60-70% of their after tax income. And that is with an inflated pre-bubble income that will probably be slashed in half eventually.

But the interesting part is his perspective on housing as an investment. He is holding on to it, hoping housing will stage a comeback (it is worth $400k after all ). His sole investment, he was hoping it would go up a lot, and in 10 years, sell it and use the proceeds to either fund the downpayment for a much bigger place, or buy a smaller place with cash. Needless to say, it isn't turning out quite how he expected, but he's hanging tight. I can't imagine what kind of deferred maintenance is(n't) happening.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 10-12-2010, 10:33 AM   #133
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,714
Send a message via Skype™ to kcowan
Yes if you own your home mortgage-free, and have a COLAd DB pension that covers your living expenses, then investing, if any, becomes a hobby to earn enough for "luxuries".
__________________
For the fun of it...Keith
kcowan is online now   Reply With Quote
Old 10-12-2010, 10:43 AM   #134
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,714
Send a message via Skype™ to kcowan
Quote:
Originally Posted by FUEGO View Post
...But the interesting part is his perspective on housing as an investment. He is holding on to it, hoping housing will stage a comeback (it is worth $400k after all ). ..
Many investors are guilty of this thinking known as anchoring, which is that every investment must be sold at a profit even if it means holding on for many years rather than consider the new reality and divesting of losers in order to fund the purchase of potential winners.
__________________
For the fun of it...Keith
kcowan is online now   Reply With Quote
Old 10-12-2010, 10:48 AM   #135
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,526
Quote:
Originally Posted by kcowan View Post
Many investors are guilty of this thinking known as anchoring, which is that every investment must be sold at a profit even if it means holding on for many years rather than consider the new reality and divesting of losers in order to fund the purchase of potential winners.
And I think for this guy, he knows he doesn't have the $60-80k to make up any deficiency judgment, but he has the few thousand a month in income to pay the monthly mortgage bill. And he needs a place to sleep at night too. But yes, I'm sure the psychological reason is he has anchored himself into his investment and is certain that one day he will be able to sell for a profit (even if it means sinking tens or hundreds of thousands more into taxes, insurance, interest, maintenance, etc).
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 10-20-2010, 01:27 AM   #136
Thinks s/he gets paid by the post
 
Join Date: Dec 2009
Location: Alberta/Ontario/ Arizona
Posts: 3,127
Total real estate represents about 12%of net worth if I capitalize pension receivable and about 18% of after tax expenses. Feel pretty comfortable with this. Could put another 3- 4% of NW and maybe 5-7% of expenses into a new place in Arizona but not likely at this point.
__________________
Danmar is offline   Reply With Quote
Old 10-20-2010, 06:10 AM   #137
Full time employment: Posting here.
BTravlin's Avatar
 
Join Date: May 2010
Posts: 994
Currently about 1/3 of NW including paid off retirement home and current home mortgaged to 80% of the new deflated value. Did a cash out refi to buy the retirement home at very deflated price. Seven more years until we sell this one and move to the goal.
__________________
Wherever you go, there you are.
(In other words, no whining!)
BTravlin is offline   Reply With Quote
Old 12-15-2010, 04:32 PM   #138
Recycles dryer sheets
 
Join Date: Jun 2005
Posts: 126
I purchased my home about a year ago (and sold my old home shortly after for about 90%of its peak value).

My equity in the house represents about 10% of my networth. My equity plus the mortgage represents about 28% of my net worth. Market value represents about 30%.
__________________
jerryo is offline   Reply With Quote
Old 12-15-2010, 05:40 PM   #139
Recycles dryer sheets
 
Join Date: Sep 2007
Posts: 184
Mines about 6%
__________________
HpRyder is offline   Reply With Quote
Old 12-16-2010, 07:26 PM   #140
Recycles dryer sheets
 
Join Date: Feb 2006
Posts: 62
Our combined main house and beach house are ~ 20% of our net worth.
__________________

__________________
kbst is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What percentage of your net worth would you spend to have teeth? cashflo2u2 FIRE and Money 76 06-21-2009 10:07 PM
Hi, my net worth Gazingus Hi, I am... 21 01-11-2008 05:12 PM
Home value as a percentage of net worth Sam FIRE and Money 57 12-06-2006 06:09 PM
Net Worth by Age Anon FIRE and Money 18 09-14-2004 05:34 PM
Net worth sunrunner4@hotmail.com Life after FIRE 23 08-11-2004 12:23 PM

 

 
All times are GMT -6. The time now is 12:17 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.