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House Value & Firecalc
Old 03-05-2010, 12:04 PM   #1
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House Value & Firecalc

All,

Sorry if this question has been posted before, but I haven't been able to find it in 10 minutes, so here goes.

When determining what number to plug into the portfolio section, should it only be savings (i.e. cash, stocks, bonds, etc)? Or do you plug in a variation of your net worth?

My dilemma is that my fully paid house is worth about $750K in a stable/growing housing market. I feel I should not use that full number, but perhaps half as being part of my portfolio, as I'll always need somewhere to live and could get something to my taste in the $325K range.

So $325K added to my portfolio, does this make sense?

E86S54
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Old 03-05-2010, 02:03 PM   #2
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Originally Posted by e86s54 View Post
So $325K added to my portfolio, does this make sense?
I would not include a fully paid for house as a part of my portfolio in FIRECalc.

However, if you plan to sell your house in the future, buy something less expensive and anticipate you will end up with $325K after completing that transaction, then you should, under the "Portfolio Changes" tab, add the $325K as lump sum at whatever future date you expect the transaction to occur.
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Old 03-06-2010, 08:09 AM   #3
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Originally Posted by REWahoo View Post
I would not include a fully paid for house as a part of my portfolio in FIRECalc.

However, if you plan to sell your house in the future, buy something less expensive and anticipate you will end up with $325K after completing that transaction, then you should, under the "Portfolio Changes" tab, add the $325K as lump sum at whatever future date you expect the transaction to occur.
+1. If you add in any house value that you don't plan to realize by selling or reverse mortgage you will risk raising your withdrawal rate to a point of likely failure. Firecalc's success rates are based on assets that can be consumed.
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