TheHouse7,TheHouse7 wrote: ↑Sat Oct 21, 2017 8:55 pmI pay $3,000 in taxes/insurance per year with no mortgage at all.Big Dog wrote: ↑Sat Oct 21, 2017 7:07 pm never had any bonds until I hit early 60's....slept well at night thru the '87 crash and every one since. Of course, what I missed out on was the opportunity to rebalance and tax loss harvest during the downturns.
Agreed. House value can be close to zero (net of debt) and one can still be house poor. And THAT was a big problem during the last downturn.Net worth in relation to house value has nothing to do with being house poor.
fwiw -- house poor:
Read more: House Poor http://www.investopedia.com/terms/h/hou ... z4wBui7VoCA house poor is a situation that describes a person who spends a large proportion of his or her total income on home ownership, including mortgage payments, property taxes, maintenance and utilities. House poor individuals are short of cash for discretionary items and tend to have trouble meeting other financial obligations like vehicle payments.
I'm getting really confused, if I'm "house poor" should I hold more bonds/cash/tips? How is this actionable? Kinda seems like slander.
You have approximately 5 years of annual expense in your 80/20 portfolio (25%). You have another 15 years worth of annual expense in your house. So, you are "House Poor". If you liquidate your house and move somewhere else, you would have 20 years worth of annual expense in your portfolio. You only need 30 to 40 years of annual expense to early retire. You have a huge opportunity cost with so much of your net worth in your house that generate no income with an expense for you.
You are "House Poor". Besides the house, you have little to nothing else. And, you have no diversification with 75% of your net worth in the house.
KlangFool