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Old 03-01-2018, 09:44 AM   #81
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But your mutual funds/stocks are also only a guess what the real value would be, right? Based upon yesterday's close in many cases? The market can go up or down between when you want to sell and when the sale is competed. So you take your best guess on valuation.

Net worth is really a guess determined at a particular point in time, and that is all it is.

Ideally, folks adding up the net worth of qualified retirement type investments (IRA, etc.) would take the net value of funds after paying taxes on withdrawals. My guess is that most people do not do that-they look at the numbers on their current statement. And even if they do figure in the taxes, they are projecting that they would liquidate over a certain period of time, to gain the best tax advantages. Again, more guessing.
Yes to that too.

But I still pay more attention to investable assets, because I can do something about it. Homes, not so quick. I cannot buy or sell RE that quick. I am not a day trader, but like to shift my AA around a little bit, or overweight/underweight this or that sector, if I feel like it.

About taxes, it's a good point. I account for that by having taxes included in my total expenses, and checking that WR against the current stash size.

No freebies anywhere in life, I guess.
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Old 03-01-2018, 10:21 AM   #82
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I'm not disagreeing with your thinking at all. I personally don't look at net worth or use it as the most current worth for myself.

I have a ranch and if the market said today I should get X $ and it doesn't sell for 2 years what really is it worth. With funds and markets is more of current value of worth to me then real estate values.

I also agree that there is some guess even in the market and when you sell etc.
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ER, home value and net worth
Old 03-02-2018, 04:35 PM   #83
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ER, home value and net worth

I purchased a more expensive home in 2014 in order to have a larger % of net worth in real estate. We lived in our first home 25+ years and it was time to move up a bit. Retired in 2016 at 54.

I did not include the home value in the retirement analysis when evaluating our ability to FIRE. I do include the home value in the net worth analysis now since I could sell it and pay rent in a senior living or assisted living facility for more than a decade. I view it as my long term care insurance policy.
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Old 03-02-2018, 07:08 PM   #84
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As far as net worth, if I were to calculate net worth, the house would be part of that. When I think about retirement, I think of the house in terms of what it costs to run/ maintain, including a budget for big ticket maintenance.

At this point, we have no intention of downsizing in retirement. The plan is to move to a lower cost of living area and buy a larger home - with plenty of storage space. But we will need to try renting in any area before buying, in case we don't like it.
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Old 03-02-2018, 07:59 PM   #85
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It's worked out fine for an old college buddy of mine...so far.

The small home he bought in a suburb of a large California city (not LA or SF) 15 years ago has grown in value from ~$400,000 to $1,500,000.

However looking on Zillow shows the last million of that increase has come only in the last 5 years.

So while we see increasing numbers of people concerned about a stock market bubble, it's scary that there are those who live in HCOL areas that still seem very confident (here and on bogleheads) their home values will never go down.
That last part is scary... part of what got us in a whole heap of hurt a decade ago.
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Old 03-03-2018, 10:50 AM   #86
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Originally Posted by FIREHAPPY View Post
I purchased a more expensive home in 2014 in order to have a larger % of net worth in real estate. We lived in our first home 25+ years and it was time to move up a bit. Retired in 2016 at 54.

I did not include the home value in the retirement analysis when evaluating our ability to FIRE. I do include the home value in the net worth analysis now since I could sell it and pay rent in a senior living or assisted living facility for more than a decade. I view it as my long term care insurance policy.
I agree with this line of thinking. If you own real estate, including your primary residence, it can be sold and you can transition to a different living situation if necessary (renting, smaller home, assisted living, etc etc). So I also look at it as a type of insurance or bonus asset.
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Old 03-03-2018, 11:07 AM   #87
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Since the only time in my entire life that I’ve told anyone about my net worth is this forum, it doesn’t matter to me in the least whether I include the house or not in the tally! My house is about 14% of my nest egg. I have no plans to move in retirement, except to a nursing facility should I need to, but if disaster strikes I could downsize.
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Old 03-03-2018, 11:15 AM   #88
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I agree with this line of thinking. If you own real estate, including your primary residence, it can be sold and you can transition to a different living situation if necessary (renting, smaller home, assisted living, etc etc). So I also look at it as a type of insurance or bonus asset.


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