Home value as a percentage of net worth

[Alex]

I count my home equity in my TOTAL net worth calculations because I plan on selling the home and moving to a lower cost area when I retire. I base my valuation on the most recent appraisal (about a year old now) less estimated transaction costs. I haven't really adjusted the valuation up or down simply because I don't track it that closely. Once I get closer to FIRE I will do a more thorough evaluation.

One thing that I do track very closely is what I call my LIQUID net worth. Home equity is not part of that equation even though I do have an untapped credit line of up to 200K.

 

[furpants]

You must be young. Most of us here are old farts.

Not that young! I'm 36. Still not an old fart, though!

I do think I'm a bit behind the curve compared to most on this board. But I'm working on that problem...

 

[Zipper]

~33%.

Like most Canadian retirees, the mortgage has been long gone.

 

[kramer]

I will be FIREing without ever having owned a home. And I probably will not purchase one for at least several years after FIRE.

Stand aside! It's Kramer, parachuting in, naked, with only an ATM card

 

[AltaRed]

Why is he comparing apples to oranges? He's asking what percentage of home equity makes up your total net worth. Simple and valid question.

It SHOULD be asking for equity, but it is asking for market value. That is meaningless in the same ratio as net worth.

 

[justin]

It SHOULD be asking for equity, but it is asking for market value. That is meaningless in the same ratio as net worth.

Maybe OP wants to know the actual value. Most housing expenses are strongly tied to value of the house (taxes, insurance, maintenance, interest charges on a mortgage, etc). Perhaps OP wants to see the correlation between high value houses and high net worth individuals.

 

[WRBT]

Exactly justin.

The "new poll" button is on the upper right. Instead of guessing at the motivations of OP and telling him what his poll should be just click that and start your own if the data you're interested in differs.

 

[retire@40]

It SHOULD be asking for equity, but it is asking for market value. That is meaningless in the same ratio as net worth.

Yup, you're right. I read the original question too fast and assumed it was equity. FMV only works if there is no liability against it. At that point FMV = equity.

 

[Sam]

I won't vote because it is stupid to compare apples and oranges. The ONLY value you have in your home is your equity.

It SHOULD be asking for equity, but it is asking for market value. That is meaningless in the same ratio as net worth.

My question was first stupid, then meaningless. Now you tell me what I should be asking!

If it was stupid and meaningless, why are you still around inputting your thought? Is it possible that you like to be around stupid and meaningless people so you'd feel comfortable? Well, I don't like to be around or dealing with people I don't like, and that's you. If you did not know why the question was asked that way, the best thing was to inquire as opposed to jumping to the conclusion. You might also want to stop flattering yourself. In spite of all the strong, offensive words you use, you don't sound at all intelligent to me.

 

[kjpliny]

The poll results seem bogus...the large majority of posters have net worth 3 to 10 times their house value?

 

[Corporateburnout]

The poll results seem bogus...the large majority of posters have net worth 3 to 10 times their house value?

And why do you find it bogus? If your house is worth 200K your net worth could be 600K to 2MM. I don't find this to be unusual for ER people.

 

[kjpliny]

And why do you find it bogus? If your house is worth 200K your net worth could be 600K to 2MM. I don't find this to be unusual for ER people.

Guess I'm seeing things from the northeast perspective where houses are $400-500k with retirement still many years away. :

 

[unclemick]

Midwest, going on 14th yr of ER - or at 63 maybe regular retirement but still young at heart.

69k mortgage on 85k house, 1.2 mil net worth tossing in junk - house, timberland, vehicles, etc.

Heh heh heh - not on any coast nor waterfront.

 

[REWahoo]

Guess I'm seeing things from the northeast perspective where houses are $400-500k with retirement still many years away. :

Not all of us suffer from coastalhouseitus.

 

[Leonidas]

The poll results seem bogus...the large majority of posters have net worth 3 to 10 times their house value?

Guess I'm seeing things from the northeast perspective where houses are $400-500k with retirement still many years away. :

Yup, quite a number of us live in places where fewer dollars buys a lot more house. My NW is 16 times my home value. 3100 sf sitting on a small lake in one of the top "best places to live" (according to Money Magazine anyway).

 

[Corporateburnout]

Midwest, going on 14th yr of ER - or at 63 maybe regular retirement but still young at heart.

69k mortgage on 85k house, 1.2 mil net worth tossing in junk - house, timberland, vehicles, etc.

Heh heh heh - not on any coast nor waterfront.

Why such a high mortgage on a 85K house? The interest rate must be incredibly favorable. Just wondering..........

 

[audreyh1]

Guess I'm seeing things from the northeast perspective where houses are $400-500k with retirement still many years away. :

I sold my 1800 sq ft house for a whopping $156K a couple of years ago. 10X that amount is not so much for retired folks.

Audrey

 

[unclemick]

Strictly emotional - non rational decision.

Post Katrina - after three weeks a hotel room with three women, a dog and a cat got old. Prefering to rent - the pickings were slim - so bought quickly once the decision not to go back to LA was made.

heh heh heh - 5.75% and NO! I don't wish to regurgitate the pay off the house or carry the mortgage debate. Pencil me in for rent - even though I don't practice what I preach.

 

[Martha]

Well Mick, having a mortgage is kinda like renting.

Sam, your poll is interesting. You know by now though that we have people here who argue about everything and polls for some reason are especially subject to criticism. Even the pollmeister Dantien hardly does polls anymore. I rather like them; they lead to interesting discussions and a view of a snippet of the world.

 

[Corporateburnout]

Well Mick, having a mortgage is kinda like renting.

Sam, your poll is interesting. You know by now though that we have people here who argue about everything and polls for some reason are especially subject to criticism. Even the pollmeister Dantien hardly does polls anymore. I rather like them; they lead to interesting discussions and a view of a snippet of the world.

I totally agree with the polls making for interesting discussions. I for one like them as well and based on the number of respondents it seems like a lot of folks share our views.

 

[youbet]

The poll results seem bogus...the large majority of posters have net worth 3 to 10 times their house value?

Your situation is one of your own doing! You choose to live in an expensive home while you have few other assets because that's what you want. Many of us made different decisions. That's hardly bogus.

 

[kjpliny]

Your situation is one of your own doing! You choose to live in an expensive home while you have few other assets because that's what you want. Many of us made different decisions. That's hardly bogus.

Well, I guess it depends on how you look at it. If my house is worth $500k and my net worth is $1M, I'd be at 50% in the poll. Someone with a house worth $200k and net worth of $600k would be at 30% in the poll, but not as well off financially.

On a side note, I was born and raised on long Island and have no reason to leave the area. Cost of living is high, but so is relative pay.

 

[rs0460a]

The poll results seem bogus...the large majority of posters have net worth 3 to 10 times their house value?

Yes - and as the "value" of my home goes down, and the "value" of my investments go up, it will even be more of a "spread" (in other words, it really dosen't mean anything! :)

- Ron

 

[youbet]

Yes - and as the "value" of my home goes down, and the "value" of my investments go up, it will even be more of a "spread" (in other words, it really dosen't mean anything! :)

- Ron

Ron,

I wonder where you're located or what type of home (manufactured?) that you anticipate the market value of your home declining. I ask because in another thread currently going on there is duscussion of living in inexpensive manufactured homes and the impact of their depreciation as opposed to appreciation with stick-built homes.

 

[youbet]

Well, I guess it depends on how you look at it. If my house is worth $500k and my net worth is $1M, I'd be at 50% in the poll. Someone with a house worth $200k and net worth of $600k would be at 30% in the poll, but not as well off financially.

So....... how does this make the "poll results seem bogus" as you said?