Anonymous wrote:

Anonymous wrote:Home value: $650K
Equity in home: $500K
Total net worth: $725K

So equity/net worth = 69%. I prioritize having low debt vs. having lots of investments.

I would feel very insecure with so much of my net worth tied up in my house.

PP you responded to. I don’t feel insecure at all. My mortgage is $600 a month and I have $150,000 in cash. I feel very good that that will help me weather any storms that life brings. Certainly I feel better than I would watching the stock market go up and down if I had a big percentage of my net worth there.

I know investments are important, and I plan on focusing on that now. But it was more important to me to have a lot of cash and low debt first.

Anonymous wrote:Home value: $650K
Equity in home: $500K
Total net worth: $725K

So equity/net worth = 69%. I prioritize having low debt vs. having lots of investments.

I would feel very insecure with so much of my net worth tied up in my house.

Home value: $650K
Equity in home: $500K
Total net worth: $725K

So equity/net worth = 69%. I prioritize having low debt vs. having lots of investments.

25%. Our NW is 1.2M

Anonymous wrote:

Anonymous wrote:For those of us with smaller and less expensive homes, is there value in including the equity in our net worth? I understand the logic when we're talking about a house that has appreciated and can be sold to net a profit and downsize. In my case, that's not an option unless we move to a LCOL area, which is not planned. So the value of the house doesn't have a lot of meaning in my financial planning because we need a place to live. Thoughts?

House is about 20 percent of NW.

This is the way I think about it. A house is a place to live. Hopefully by retirement it is paid for so it is no longer a liability. The equity within it is really useless unless you sell it or borrow against it (at an interest rate). Many Americans in general and people on this forum are obsessed with housing values, viewing houses as an investment, appreciation, etc.

I think the point was it matters how much the house is worth. A $2 million dollar house with $1.5 million in equity means more in terms of financial planning because it's easy to find housing at a fraction of that housing/equity amount. It's thus reasonable to consider that equity when planning for retirment. It's much less reasonable when the home value is $300k and the mortgage balance is $200k since it's not easy to find a lot of places to live utilizing that amount of money.

House value ~$1M, owe ~$0.5M, so equity ~$0.5M. That's 30% of our overall NW.

Anonymous wrote:For those of us with smaller and less expensive homes, is there value in including the equity in our net worth? I understand the logic when we're talking about a house that has appreciated and can be sold to net a profit and downsize. In my case, that's not an option unless we move to a LCOL area, which is not planned. So the value of the house doesn't have a lot of meaning in my financial planning because we need a place to live. Thoughts?

House is about 20 percent of NW.

This is the way I think about it. A house is a place to live. Hopefully by retirement it is paid for so it is no longer a liability. The equity within it is really useless unless you sell it or borrow against it (at an interest rate). Many Americans in general and people on this forum are obsessed with housing values, viewing houses as an investment, appreciation, etc.

For those of us with smaller and less expensive homes, is there value in including the equity in our net worth? I understand the logic when we're talking about a house that has appreciated and can be sold to net a profit and downsize. In my case, that's not an option unless we move to a LCOL area, which is not planned. So the value of the house doesn't have a lot of meaning in my financial planning because we need a place to live. Thoughts?

House is about 20 percent of NW.

35%

5%

About 25% equity of nw. We own several real estates, some of them paid off, some of them still have mortgages.

1.7m home value
900k balance
800k equity
3.2m net worth
25% equity as percentage of nw

About 25%. No mortgage.

We're building another house that will become our primary residence, and have four rentals right now, soon to be five (when we move into the new place and rent this one).

$1.3M invested

Works for us.

12%, no mortgage

22%