assets 1.8m, home value 1.2 mil, mortgage 600k. so my house equity is 1/3 of my tnw.

definitely not DCUM special, just an average 50-year-old.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:75%

Paid-off condo = $685,000
Total net worth = $910,000
Unlike others here, I don’t believe that low-interest debt is a gift from the gods. Not having a mortgage makes my life so easy and stress-free, despite the fact that I don’t have a super high income. My monthly expenses are under $3,000 so I have a huge margin of safety every month.

Also, it allows me to live in a great condo in a great location, which is important to me. Travel, dining out, etc. are totally unimportant to me, so I have spent a lot (relatively) on the one thing that matters to me.

Are you not worried about only having 225k in assets outside your home though? Will you have a pension or something?
For retirement, 225k will only generate $750/month and that's before taxes and doesn't include any buffers for emergencies, long term care etc.

No, not worried about retirement because I'm 42 and have plenty of time to save for that. Also, when your monthly expenses are <$3K, you don't need to save that much for retirement.

I think people generally consider it "good" for the "home equity divided by total net worth" percentage to be low, but I disagree. It feels weird saying this as a non-millionaire posting among all these multi-millionaires, but I feel very well-off. I bring in $12.5K per month (before taxes) and spend less than $3K in a HCOL area, so I feel like I have already achieved partial financial freedom. That's only possible because I have no mortgage. (Of course, if I won $100 million in the lottery, then my home equity/net worth ratio would be very low--and that would be good--but for most people with limited resources, I think having a high ratio leads to a better quality of life.)

And people talk about the house being an illiquid asset as a downside, but I don't really get that. I took out a $200K HELOC, so any time I need money, I can access it with no problem. It is unquestionable that one's net worth at 65 will be higher with more money in stocks, but my goal was never to be the richest person in the graveyard (or at 65). My goal is to use the money I have to enjoy a great quality of life, and putting more money in the house is one of the best ways to achieve that.

You numbers don't make sense for HCOL area. Can you please provide your breakdown on how you only spend 3K a month?
RE tax alone could be 1K a month easily as taxes go up with property values and in HCOL area become very high unless you can qualify for some financial aid, which your salary doesn't indicate.
Do you have kids? How do you manage to pay RE tax, insurance, car insurance+taxes, repairs, maintenance on a house unless it's tiny and you do everything yourself, and buy food, essential items, and have anything left over for any resemblance of a vacation? Do you never leave your house, never eat out or order take out, never buy an airplane ticket, never get any help from anyone when it comes to home maintenance? That's not a great quality of life.. unless I am missing something and your spend doesn't account for emergency funds and digging into savings for anything like repairs, vacations, needing to get a new car, etc.

Not married (but do have a partner who lives separately) and no kids, so that's obviously a big part of it. My main expenses are condo fees ($7,300/year), property taxes ($5,700), and food ($10,000/year for groceries and eating out - also includes paper products, etc.). Total car expenses are around $1K per year - I work from home now so put very little mileage on the car, need little gas, and never have repairs outside of an annual oil change. Since it's a paid-off 2015 Corolla, I don't even get comprehensive insurance and have the highest auto deductible possible.

I splurge on what I value (for example, I think my food spend is pretty high for one person). I don't enjoy travel, so that does save money. Fortunate to be in good health, so no medical expenses outside of like $150/year for an annual check-up and bloodwork. My hobbies are generally inexpensive (hiking, etc.). It can definitely be done and is not actually a big sacrifice. I would have to spend more if/when I need a new car, furniture, etc.

Clearly I’m an outlier on this wealthy board, but maybe me sharing will provide a different end of the spectrum. Our home equity is more than half of our NW.

NW = $1.1M (ages 39 + 42)
Home value = $1.25M
Remaining Mortgage = $550k
Home equity = 700k

These are round numbers, I haven’t checked exact NW or remaining mortgage recently.

Some background is that we lucked out in buying in a hot zip code 2018 for 800k w/ ~20% down. Never dreamed it would go up 50% + in value in 6 years. We’ve got a low rate so count ourselves lucky to have an affordable place to live regardless of what ultimately happens with property value in the long run.

Also our incomes have gone from 200k to 300-350k over that time period. And only recently have our childcare costs gone down. So I anticipate now that we’ve bumped up retirement and we have more liquidity to invest that the % will go down. We are probably representative of your basic upper end of MC turned lower end of UMC dual income family who lucked out in buying a home pre-COVID.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:75%

Paid-off condo = $685,000
Total net worth = $910,000
Unlike others here, I don’t believe that low-interest debt is a gift from the gods. Not having a mortgage makes my life so easy and stress-free, despite the fact that I don’t have a super high income. My monthly expenses are under $3,000 so I have a huge margin of safety every month.

Also, it allows me to live in a great condo in a great location, which is important to me. Travel, dining out, etc. are totally unimportant to me, so I have spent a lot (relatively) on the one thing that matters to me.

Are you not worried about only having 225k in assets outside your home though? Will you have a pension or something?
For retirement, 225k will only generate $750/month and that's before taxes and doesn't include any buffers for emergencies, long term care etc.

No, not worried about retirement because I'm 42 and have plenty of time to save for that. Also, when your monthly expenses are <$3K, you don't need to save that much for retirement.

I think people generally consider it "good" for the "home equity divided by total net worth" percentage to be low, but I disagree. It feels weird saying this as a non-millionaire posting among all these multi-millionaires, but I feel very well-off. I bring in $12.5K per month (before taxes) and spend less than $3K in a HCOL area, so I feel like I have already achieved partial financial freedom. That's only possible because I have no mortgage. (Of course, if I won $100 million in the lottery, then my home equity/net worth ratio would be very low--and that would be good--but for most people with limited resources, I think having a high ratio leads to a better quality of life.)

And people talk about the house being an illiquid asset as a downside, but I don't really get that. I took out a $200K HELOC, so any time I need money, I can access it with no problem. It is unquestionable that one's net worth at 65 will be higher with more money in stocks, but my goal was never to be the richest person in the graveyard (or at 65). My goal is to use the money I have to enjoy a great quality of life, and putting more money in the house is one of the best ways to achieve that.

You numbers don't make sense for HCOL area. Can you please provide your breakdown on how you only spend 3K a month?
RE tax alone could be 1K a month easily as taxes go up with property values and in HCOL area become very high unless you can qualify for some financial aid, which your salary doesn't indicate.
Do you have kids? How do you manage to pay RE tax, insurance, car insurance+taxes, repairs, maintenance on a house unless it's tiny and you do everything yourself, and buy food, essential items, and have anything left over for any resemblance of a vacation? Do you never leave your house, never eat out or order take out, never buy an airplane ticket, never get any help from anyone when it comes to home maintenance? That's not a great quality of life.. unless I am missing something and your spend doesn't account for emergency funds and digging into savings for anything like repairs, vacations, needing to get a new car, etc.

Our modest house costs 2k+ a month after it's paid off according to my calculations. 1K property tax alone. Add to it insurance, utilities, spread out cost of maintenance and repairs (it's an old house) and it's easily 2K a month. There is no way we can live on spending only 1K for everything else even if we have free health insurance. I know many live like this, but it's poverty and in no way high QOL PP brags about.

NW is 2.5 million (cash only)
Pension is 200K

We do not include the following in our net worth
- Gold jewelry
- Cars
- Camera equipment
- 529
- SFH
- Inheritance (around 400K)
and Social security

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:75%

Paid-off condo = $685,000
Total net worth = $910,000
Unlike others here, I don’t believe that low-interest debt is a gift from the gods. Not having a mortgage makes my life so easy and stress-free, despite the fact that I don’t have a super high income. My monthly expenses are under $3,000 so I have a huge margin of safety every month.

Also, it allows me to live in a great condo in a great location, which is important to me. Travel, dining out, etc. are totally unimportant to me, so I have spent a lot (relatively) on the one thing that matters to me.

Are you not worried about only having 225k in assets outside your home though? Will you have a pension or something?
For retirement, 225k will only generate $750/month and that's before taxes and doesn't include any buffers for emergencies, long term care etc.

No, not worried about retirement because I'm 42 and have plenty of time to save for that. Also, when your monthly expenses are <$3K, you don't need to save that much for retirement.

I think people generally consider it "good" for the "home equity divided by total net worth" percentage to be low, but I disagree. It feels weird saying this as a non-millionaire posting among all these multi-millionaires, but I feel very well-off. I bring in $12.5K per month (before taxes) and spend less than $3K in a HCOL area, so I feel like I have already achieved partial financial freedom. That's only possible because I have no mortgage. (Of course, if I won $100 million in the lottery, then my home equity/net worth ratio would be very low--and that would be good--but for most people with limited resources, I think having a high ratio leads to a better quality of life.)

And people talk about the house being an illiquid asset as a downside, but I don't really get that. I took out a $200K HELOC, so any time I need money, I can access it with no problem. It is unquestionable that one's net worth at 65 will be higher with more money in stocks, but my goal was never to be the richest person in the graveyard (or at 65). My goal is to use the money I have to enjoy a great quality of life, and putting more money in the house is one of the best ways to achieve that.

You numbers don't make sense for HCOL area. Can you please provide your breakdown on how you only spend 3K a month?
RE tax alone could be 1K a month easily as taxes go up with property values and in HCOL area become very high unless you can qualify for some financial aid, which your salary doesn't indicate.
Do you have kids? How do you manage to pay RE tax, insurance, car insurance+taxes, repairs, maintenance on a house unless it's tiny and you do everything yourself, and buy food, essential items, and have anything left over for any resemblance of a vacation? Do you never leave your house, never eat out or order take out, never buy an airplane ticket, never get any help from anyone when it comes to home maintenance? That's not a great quality of life.. unless I am missing something and your spend doesn't account for emergency funds and digging into savings for anything like repairs, vacations, needing to get a new car, etc.

Anonymous wrote:

Anonymous wrote:75%

Paid-off condo = $685,000
Total net worth = $910,000
Unlike others here, I don’t believe that low-interest debt is a gift from the gods. Not having a mortgage makes my life so easy and stress-free, despite the fact that I don’t have a super high income. My monthly expenses are under $3,000 so I have a huge margin of safety every month.

Also, it allows me to live in a great condo in a great location, which is important to me. Travel, dining out, etc. are totally unimportant to me, so I have spent a lot (relatively) on the one thing that matters to me.

Are you not worried about only having 225k in assets outside your home though? Will you have a pension or something?
For retirement, 225k will only generate $750/month and that's before taxes and doesn't include any buffers for emergencies, long term care etc.

No, not worried about retirement because I'm 42 and have plenty of time to save for that. Also, when your monthly expenses are <$3K, you don't need to save that much for retirement.

I think people generally consider it "good" for the "home equity divided by total net worth" percentage to be low, but I disagree. It feels weird saying this as a non-millionaire posting among all these multi-millionaires, but I feel very well-off. I bring in $12.5K per month (before taxes) and spend less than $3K in a HCOL area, so I feel like I have already achieved partial financial freedom. That's only possible because I have no mortgage. (Of course, if I won $100 million in the lottery, then my home equity/net worth ratio would be very low--and that would be good--but for most people with limited resources, I think having a high ratio leads to a better quality of life.)

And people talk about the house being an illiquid asset as a downside, but I don't really get that. I took out a $200K HELOC, so any time I need money, I can access it with no problem. It is unquestionable that one's net worth at 65 will be higher with more money in stocks, but my goal was never to be the richest person in the graveyard (or at 65). My goal is to use the money I have to enjoy a great quality of life, and putting more money in the house is one of the best ways to achieve that.

NW about $3 million, home equity about $850k, so call it 30 percent since (a) who knows if the home valuation is accurate and (b) the values of many of our other assets fluctuate with the markets.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We seem to be way out of balance.

Net worth is $2.6 and about $1M of that is our home equity.

About 38%

Depends on age. You must be quote young. As you get older, RE will become a lower percentage of your overall NW.

Not necessarily. As we paid off our mortgage RE became a more significant part of our NW, and when we bought a second (non investment) house it jumped again. So while our cash/investments has increased, so has our home equity.

That's a choice you made. The second home is an investment, not 'home equity'.

20%, The rest is in retirement accounts and cash.

Anonymous wrote:Our NW is about $3m with home equity at $1m and no mortgage. Others have called that 30%+ of NW as home equity high, though it feels comfortable for us

How old are you guys? The percentage of home equity vs. net worth will be higher when you are younger, assuming you only have the primary residence.

Our NW is about $3m with home equity at $1m and no mortgage. Others have called that 30%+ of NW as home equity high, though it feels comfortable for us

Anonymous wrote:

Anonymous wrote:We seem to be way out of balance.

Net worth is $2.6 and about $1M of that is our home equity.

About 38%

Depends on age. You must be quote young. As you get older, RE will become a lower percentage of your overall NW.

Not necessarily. As we paid off our mortgage RE became a more significant part of our NW, and when we bought a second (non investment) house it jumped again. So while our cash/investments has increased, so has our home equity.

NW $2.6M

Home Equity $800k

30% but we are young so this % should decrease substantially as we accumulate in our brokerage account

Anonymous wrote:$0. Sold all three properties and not planning to buy any time soon. Owning property didn't work for us. Regret buying all of them.
May build a retirement home abroad. All money is in stock market.

I would like to do this but worried we suck at investing in the markets and would lose. We also would get hit with huge tax bills and have to do a 1031 conversions and pass it to our kids. I will never retire I regret my choices and wish I wasn't as risk averse in the markets, but I married someone who lost so much money in the market that our choices became... limited.