Hi all,
I have a few questions I was hoping to get some guidance on...I am new to the forum and I have been working on calculating the value of my current portfolio and expenses and depending on how I value a few items, I've either reached financial independence or I have a few years of work ahead of me
My questions concern my primary residence:
1. Should I consider the appraised value of my primary residence part of my portfolio? (currently I'm not considering it part of my current portfolio)
2. If I don't consider primary residence part of my portfolio, should I deduct the outstanding balance on my mortgage from my portfolio (current approach is to not consider my primary residence as part of my portfolio AND to not subtract the outstanding balance on my mortgage from my overall net worth)
3. Should I consider the monthly mortgage payment as a monthly expense? (currently I'm considering it as a monthly expense)
If 1. I don't consider the value of my primary residence and 2. ignore the outstanding balance on my mortgage and 3. include monthly mortgage payment as a monthly expense, then I've reached FI using the 4% rule.
However, there are lots of ways to look at this. If I subtract the loan from my net worth, then I have about $250K to go. If I don't consider the monthly mortgage as an expense, then I am about $200K beyond financial independence.
I realize it doesn't matter much either way, but I'm curious to know how this community would consider these variables. Thanks for your help!
Ely
I have a few questions I was hoping to get some guidance on...I am new to the forum and I have been working on calculating the value of my current portfolio and expenses and depending on how I value a few items, I've either reached financial independence or I have a few years of work ahead of me
My questions concern my primary residence:
1. Should I consider the appraised value of my primary residence part of my portfolio? (currently I'm not considering it part of my current portfolio)
2. If I don't consider primary residence part of my portfolio, should I deduct the outstanding balance on my mortgage from my portfolio (current approach is to not consider my primary residence as part of my portfolio AND to not subtract the outstanding balance on my mortgage from my overall net worth)
3. Should I consider the monthly mortgage payment as a monthly expense? (currently I'm considering it as a monthly expense)
If 1. I don't consider the value of my primary residence and 2. ignore the outstanding balance on my mortgage and 3. include monthly mortgage payment as a monthly expense, then I've reached FI using the 4% rule.
However, there are lots of ways to look at this. If I subtract the loan from my net worth, then I have about $250K to go. If I don't consider the monthly mortgage as an expense, then I am about $200K beyond financial independence.
I realize it doesn't matter much either way, but I'm curious to know how this community would consider these variables. Thanks for your help!
Ely