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Old 02-27-2021, 12:33 PM   #21
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The property my house sits on is worth a lot more than the house itself.... Not sure how to separate the two but together it's well under 10% of my NW.... I never really thought about it much since I've always viewed houses and property as real assets that can be sold and downsized if needed... Like expensive cars, boats, planes, collectables, etc... Just physical assets.
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Old 02-27-2021, 12:34 PM   #22
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Come on....blow that dough!
I'm trying, I'm trying! I guess I am just overly content right now.
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Old 02-27-2021, 01:00 PM   #23
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No exact math, just based on general spending percentages that I and other folks I know have spent on non house needs.
Sorry, you did say "generally" for the 15% and "personally" for the 30%. I was going to come back and delete the question.
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Old 02-27-2021, 01:01 PM   #24
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Exactly.

I'd take it a step further, though. The bigger the house/higher the cost of living area, the more it's going to eat in maintenance every year, and the more it's going to cost to replace things. We took that into account (although not as much, it turns out, as we should have) more than the house's price.

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Let NW be your net worth before house purchase. Let HP be the price of the house.

If you can retire safely on NW-HP, you're good to go. Percentage doesn't matter.
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Old 02-27-2021, 01:25 PM   #25
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Right now we're at 16%, but the houses we aspire to move to in another 2-3 years would likely put us at 30-35%. This doesn't worry us too much. YOLO.
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Old 02-27-2021, 01:39 PM   #26
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At current vluations, about 6% of NW represented by primarly residence. Purchased about 15 years ago, 2200 sq ft, in modest cost of living area. House itself is 58 years old, I'm 71.
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Old 02-27-2021, 01:44 PM   #27
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My home is 3.5% of our net worth at current value. It is 35 years old and is 2000sf with an attached double garage.
I built my home and has came up in value through the years. A huge savings with equity building from the start with doing all the work myself.
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Old 02-27-2021, 01:47 PM   #28
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I believe what is important w/r to FIRE is not how much of your NW is in house, but how much is property tax combined with other maintenance cost you pay each year for primary residence.
My house is ~50% of the total NW which is not normal but may happen at high COLA. I consider it as a last resort for living expenses, when all other sources fail.
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Old 02-27-2021, 02:39 PM   #29
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It is such a subjective thing like so many questions here. If your entire future income stream is from your NW, then it makes sense to think of it that way. That is not our case or many others.
I plan on blowing the dough to the tune of about 40% over the first ten years of retirement, between building the new home and a generous vacation budget.
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Old 02-27-2021, 02:45 PM   #30
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FWIW, the current FMV of our home is 21% of NW (including the home). Our property tax, insurance, and maintenance are 14% of annual spend. The house is 53 years old and way too big for the two of us. But we love the property and neighborhood, which is unique for our area. So we plan to stay a while longer. But inevitably we will downsize to a smaller, more energy-efficient house, with a smaller maintenance backlog. We are not targeting a specific % of NW. But I suspect it will be in the 15% range just based on the location and type of properties we are thinking about.
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Old 02-27-2021, 03:30 PM   #31
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Our townhome/condo is about 5% of our net worth.

But I don't see any issue with 10-15%, if that is what you want.

And, of course, there are some here with a much higher percent only because the home value has appreciated from when they bought.
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Old 02-27-2021, 04:11 PM   #32
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We are 25-30%. Closer to 30% when we bought. We live in an area housing is expensive. Our biggest spend is housing related as well. If at some point we decide to downsize, our spending also will go down significantly. Withdrawal rate today is a little over 3% for our annual spend.

If I looked at home value, my parents have probably over 60% of their net worth in their property, possibly much more. A paid off home, with sub-dividable land in an area that’s appreciated significantly. My mom wants to sell but her 93 yr old DH does not. He’s created a trail along the edge of their land and enjoys ‘walking the property’ each morning. They have ‘enough’ and at 93, who can argue with that logic.
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Old 02-27-2021, 04:32 PM   #33
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Our townhome/condo is about 5% of our net worth.

But I don't see any issue with 10-15%, if that is what you want.

And, of course, there are some here with a much higher percent only because the home value has appreciated from when they bought.
Yeah any calculation of % is probably more useful when first buying as a highly appreciated home skews the numbers.
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Old 02-27-2021, 04:44 PM   #34
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I don't view it as a percentage that has to be followed. What amount of savings do you need for your budget withdrawals? Take that off your total and the remainder can theoretically be used for housing. Example, if you need $60K/year and use the 4% rule as a guide, you would need $1.5M in savings. If you have $2.5M in savings then you could spend up to $1M for housing. Which $1M may not be out of line for some higher COL areas. $1M out of $2.5M is 40% if you want percentages. Location plays a very big role in housing costs.



I do not also count housing in net worth, it is meaningless as I have to have a place to live. My house also does not generate periodic income, at least until it is sold if the value has gone up. In reality my house has annual costs for taxes, insurance, upgrades and maintenance. Those costs are part of the budget needs.
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Old 02-27-2021, 06:04 PM   #35
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2.6% here for purchase price of Oregon and California homes / Net Worth. Buying an old POS that needed multiples of its purchase price to be made decent in 1994 and an auction foreclosure in 2010 really messes up the numbers. Using current plausible market value for the houses we are around 10.26% of our NW in our two homes.
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Old 02-27-2021, 06:28 PM   #36
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11.5% here. I feel we could up that % to move to our forever home.
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Old 02-27-2021, 06:31 PM   #37
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11.5% here. I feel we could up that % to move to our forever home.
That is what we are doing. We are building our dream home in South Carolina. Moved from Florida.
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Old 02-27-2021, 06:35 PM   #38
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My house might be worth 30% of my net worth, but if it is fully mortgaged then isn’t it 0%.

Seems question might be asking about home equity tied up in real estate or trying to get at home operation costs which could vary wildly from home FMV or purchase price.

What is the real ??
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House cost as % of net worth
Old 02-27-2021, 06:42 PM   #39
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House cost as % of net worth

Quote:
Originally Posted by twaddle View Post
Let NW be your net worth before house purchase. Let HP be the price of the house.

If you can retire safely on NW-HP, you're good to go. Percentage doesn't matter.

+1
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Old 02-27-2021, 06:59 PM   #40
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Equity in the 2 homes we own is probably around 20%. Launching a 2 year plan now to migrate completely into the lake house and sell the other. And have no mortgages. At that point equity/NW will be around 15%.
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