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02-28-2021, 08:54 AM
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#61
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Dryer sheet aficionado
Join Date: Jun 2016
Location: Tbd
Posts: 41
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15% now in a low cost of living area for retirement, post geo-arbitrage move from a medium cost of living City while working. Career/City pre-retirement number was 35% . Similar size and quality of houses in both areas.
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02-28-2021, 09:26 AM
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#62
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Full time employment: Posting here.
Join Date: Apr 2011
Location: Castro Valley
Posts: 788
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My house is 40% of my NW, but that doesn't matter. The real question is your income (including any SWR from portfolio) greater than your total cost to maintain your standard of living. For example, if you have a $150K pension, but your Standard of Living cost $100K, your home can be 100% of your NW and it doesn't matter.
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03-01-2021, 08:59 AM
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#63
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2016
Posts: 9,521
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I did post my home as 3.5% of my net worth which is correct. When I add the ranch with my home that is in town, the combined is 13% of my net worth.
There is no income from the ranch now so will add that to my home percentage of my NW.
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03-01-2021, 01:08 PM
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#64
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Recycles dryer sheets
Join Date: Jan 2013
Posts: 296
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4% of NW.
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03-03-2021, 10:44 AM
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#65
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Thinks s/he gets paid by the post
Join Date: Jun 2017
Location: Western NC
Posts: 4,633
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Currently ~7.5%, would like to see it much lower.
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03-05-2021, 07:20 AM
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#66
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Recycles dryer sheets
Join Date: Jan 2006
Posts: 321
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About 33% of net worth. HCOL area. No mortgage.
__________________
To endure the unbridled micromanagement of one's time on this earth, whether paid or unpaid, is to offer up one's soul to a paradigm of increasing tyranny, exploitation and indignity.
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03-05-2021, 07:59 AM
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#67
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Location: Twin Cities
Posts: 3,941
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About 28% in our mid 50s and newly FIREd. Home values have long grown about 4.2%/year in this area and we kind of have age 72 or so pegged for downsizing, cashing out and being done with yards, snow and stairs. It’s hard to predict our health, portfolio, SS and other conditions that far out but 72 seems a turning point.
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03-05-2021, 03:42 PM
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#68
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Full time employment: Posting here.
Join Date: Aug 2017
Location: claremont
Posts: 601
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I was 2/3 house, 1/3 retirement, and 10k in cash.
Much more lovely now, 100% investments and no house! Free at last!
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03-05-2021, 05:23 PM
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#69
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Full time employment: Posting here.
Join Date: Dec 2018
Posts: 966
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I do not believe there is a rule of thumb of how much your house should be as a % of your net worth. I am retired now and I am more concerned about any future unexpected negative cash flow such as medical expenses. I do not want to liquidate assets that may have declined after a market crash, or after a housing crash so I have a rainy day fund.
Mothers would tell their children to save for a rainy day and they were right because they have experienced hard time while we have experienced a record setting bull market. I do not recall my Mom telling me to have a X% of my house as part of my net worth. If you do have a rainy day fund, then the X% of your house as part of your net worth should not be a significant factor.
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03-05-2021, 05:48 PM
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#70
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Dryer sheet aficionado
Join Date: Aug 2014
Posts: 44
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I'm at 1/3 of NW. It works form me because I don't like to travel and my enjoyment comes from home life; gardening, friends visiting, and children treating it as a vacation destination. It all depends on what you want to do with your time.
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03-05-2021, 06:05 PM
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#71
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Dryer sheet wannabe
Join Date: Apr 2013
Posts: 15
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4 years into retirement, just moved to a 25% more expensive house. House is 40% of net worth. 40% feels high.
My mental accounting for the house is how much rent is it saving me tax free. It's around 2.5-3% what I paid.
I reduced my allocation to fixed income which is yielding nothing.
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03-05-2021, 06:34 PM
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#72
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Recycles dryer sheets
Join Date: May 2015
Location: El Dorado
Posts: 187
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Those percentages sound pretty high. Our paid for house represents 5% of our net worth.
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03-05-2021, 06:45 PM
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#73
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,495
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Quote:
Originally Posted by steveark
Those percentages sound pretty high. Our paid for house represents 5% of our net worth.
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Why do you say that? The median house in the US is ~$300K. At 5% the median ER member would need a $6M net worth, which is pretty high. 5% sounds pretty low. Great if you can do it, but hardly common.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged
"All models are wrong, some are useful." - George Box
“There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
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03-05-2021, 10:26 PM
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#74
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Thinks s/he gets paid by the post
Join Date: Sep 2017
Posts: 1,110
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Quote:
Originally Posted by kjpliny
About 33% of net worth. HCOL area. No mortgage.
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Perhaps that’s a better question. We’re in a HCOL area as well. The house is 25-30% of our net worth, but our mortgage is under 5%. While we could pay it off, we’re very happy with our low interest loan at the moment!
Expenses associated with the home are probably 30+% of our annual budget. Perhaps more. But we’re homebodies and, with young kids, don’t travel a ton. So while it’s a bigger expense line than others might have, it’s in the budget.
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03-06-2021, 07:18 AM
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#75
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Recycles dryer sheets
Join Date: Nov 2010
Location: Crossville
Posts: 429
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You should be fine
15% is probably somewhat normal for many here in this forum. I very seldom count our home when I think of our net worth, but it would be somewhere between 10-15% if I did.
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03-06-2021, 08:08 AM
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#76
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Thinks s/he gets paid by the post
Join Date: Jan 2016
Posts: 1,241
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Quote:
Originally Posted by rafapark
My apologies if this question has been asked before but I did a quick search and could not find the answer. Curious on what % of net worth is a good number to have invested in a house. I am talking primary residence. The reason I ask is that we are retired, 64YOs, we are building a house and it is ending up costing around 15% of our net worth. I was wondering what other people have in a similar situation.
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That's pretty much us.
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03-06-2021, 09:11 AM
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#77
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Full time employment: Posting here.
Join Date: Oct 2018
Posts: 530
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Quote:
Originally Posted by Alex The Great
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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My house is at 45% of my net worth. Bought 20 years ago for 500k less than Zillow’s estimated price today. Zero mortgage.
DH and I are blissfully happy but have a prenup. If life gives me lemons and a divorce the house is my back up plan if I can’t make it on my investments,small pension, and even smaller SS. As unlikely as this scenario is it helps me sleep at night.
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03-06-2021, 10:30 PM
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#78
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Recycles dryer sheets
Join Date: Aug 2017
Posts: 479
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If I was to add the value of my home to my net worth then it would be about 19% of my net worth. I am 57 now. Back 31 years ago when I took out my first mortgage it was a much larger percentage of my net worth. Oh wait...my net worth was a negative number back then.
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