What % of net worth is your home?

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retired recently
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Re: What % of net worth is your home?

Post by retired recently » Tue Dec 23, 2014 6:26 am

I am mid-40's and currently house approximates 8% of our net worth. As soon as my son goes to college it will be zero percent as I plan to sell and rent ;-)

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Re: What % of net worth is your home?

Post by basspond » Tue Dec 23, 2014 7:33 am

5%, age between 50-55, live in the suburbs of LCOL.

Rexindex
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Re: What % of net worth is your home?

Post by Rexindex » Tue Dec 23, 2014 7:36 am

16%

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DaftInvestor
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Re: What % of net worth is your home?

Post by DaftInvestor » Tue Dec 23, 2014 7:51 am

35% for me.

When considering a starter home versus what you feel might be a final home also figure in the costs of the house-trade-up (a lot of folks don't do that). When you sell you lose a percentage of your equity to a real estate agent (unless you sell yourself at which point you might be at a disadvantage to get as much as you might with an agent) and you have moving expenses, home-inspection cost on new house, etc. My opinion is - if you can afford it while still being able to put money into retirement accounts go for the bigger house versus the one that you will have to flip in a few years.

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Re: What % of net worth is your home?

Post by nordlead » Tue Dec 23, 2014 7:56 am

30yo, 19% of my net worth is in my house, unless I take Zillow's estimate, then it is like -15%.

So, I have no clue really. But, I bought my house with the intention of staying in it for life. I saw no point in buying a small house when I had my first child. Had I bought a 1ksqft house in a poorer area when I first got married it would have made sense, as I could have either turned it into a rental or sold it and paid little interest due to being able to pay it off quickly (also, I wasted a ton of money when renting, it took owning a house to give me a wake-up call and start straightening out my finances).

pacodelostigres
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Re: What % of net worth is your home?

Post by pacodelostigres » Tue Dec 23, 2014 8:01 am

33%

It's our second home, paid off, and we're unlikely to move for 20 years until our daughter is off to college. We paid it down aggressively.

investingdad
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Re: What % of net worth is your home?

Post by investingdad » Tue Dec 23, 2014 8:14 am

Few ways to look at this. One is to consider what we paid for the house, another is the equity we have in the house, and third is what Zillow says the house is worth.

We're currently enjoying a depressed value (like 16% down) over what we paid thanks in part to the cheap (price and quality) builder that bought the remainder of our development from the bank after our builder (higher price, higher quality) ran into financial difficulty and had to turn the entire thing back over to said bank. But we also built in 2010 and did so knowing full well that the purchase price wasn't recoverable if we decided to sell...heck, we even put more money into the house to finish the basement into a gameroom. I love our house, and would do it again in a heartbeat.

Anyway, to answer the question, if I just look at equity paid into the house (down payment plus principal paid on the mortgage) it's about 9% of our net worth.

If I took the purchase price, it would be 21% of our net worth.
Last edited by investingdad on Tue Dec 23, 2014 10:57 am, edited 1 time in total.

truenorth418
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Re: What % of net worth is your home?

Post by truenorth418 » Tue Dec 23, 2014 8:20 am

10%. NYC co-op apartment. Home is paid off.

I include it as part of total net worth, but it is not in itself meaningful since it is not part of investable assets which drive my retirement calculations.

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BigFoot48
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Re: What % of net worth is your home?

Post by BigFoot48 » Tue Dec 23, 2014 8:34 am

Examine the data in the 2014 Net Worth Survey to get about a 1,000 answers to the question. http://www.bogleheads.org/forum/viewtop ... 0&t=129842
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WorkToLive
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Re: What % of net worth is your home?

Post by WorkToLive » Tue Dec 23, 2014 8:49 am

23%. We are 40. House is paid off. We expect to stay here long-term.

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Re: What % of net worth is your home?

Post by vested1 » Tue Dec 23, 2014 8:50 am

HCOL area, equity is about 20% of net worth at age 62.5, excluding pensions and SS, which some also include in net worth to my utter amazement. However I never really understood the value of adding home equity to net worth calculations other than bragging rights, since I don't intend to ever sell and rent. I approach it much like lululu, because my wife and I have to live somewhere. Even if our plan is realized to sell and move to a more tax friendly State, buying a new home for cash, it will still be an asset I can't/won't spend.

I guess it comes down to net worth being a category to gauge overall success at amassing assets that can be liquidated in a pinch, not a scenario that has much appeal to me.

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jfn111
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Re: What % of net worth is your home?

Post by jfn111 » Tue Dec 23, 2014 8:57 am

8.4% late 50's house paid off.

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Re: What % of net worth is your home?

Post by gloomydog » Tue Dec 23, 2014 9:17 am

50%, late 30s couple, HCOL

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packet
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Re: What % of net worth is your home?

Post by packet » Tue Dec 23, 2014 9:19 am

Zillow value of home is ~38% and equity therein ~13% of Net worth.

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JDCarpenter
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Re: What % of net worth is your home?

Post by JDCarpenter » Tue Dec 23, 2014 9:30 am

Value on my books (acquisition price) is 15%; equity = 8%. Zillow, etc., doesn't work on this property--25 acres with house, zoned for residential development. SWAG value if sold to a developer, which is the only way we are likely to sell in the next decade or two, is double the value on my books.

mid 50's couple; flyover Med. C.O.L., near booming city.
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Re: What % of net worth is your home?

Post by Lafder » Tue Dec 23, 2014 9:49 am

Based on value of home if sold, about 25%

Equity in the house we live in 10% of net worth.

I agree total value of the house depends on what someone is willing to pay me for it, minus fees. But I absolutely count it as part of our net worth on paper.

Due to rental property, 50% of our net worth is in real estate. I do not buy REITs for that reason.

One way I decided how much house I could afford was to be sure to only get a loan much lower than a mortgage broker was willing to give me :)

Property tax is almost 1/3 of our mortgage payment. That is an important factor since it is a cost that keeps on costing and is not going towards equity.

Lafder

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MikeWillRetire
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Re: What % of net worth is your home?

Post by MikeWillRetire » Tue Dec 23, 2014 10:19 am

Home equity is about 25% of net worth, age 52.

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Sheepdog
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Re: What % of net worth is your home?

Post by Sheepdog » Tue Dec 23, 2014 10:40 am

We bought our home 42 years ago. The mortgage was paid off 20 years later. At my now 81 years of age, the present appraised value represents 13% of our net worth .
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Re: What % of net worth is your home?

Post by baa_10 » Tue Dec 23, 2014 10:53 am

House fully paid for... value is about 25% of my net worth. Age 53.
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Mr. Digweed
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Re: What % of net worth is your home?

Post by Mr. Digweed » Tue Dec 23, 2014 10:57 am

My folks bought their house when they moved to southern CA in the 1950's for less than 100 grand.

It sold last year for over 7 million.

At the time of their passing it became about half their net worth.

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TheTimeLord
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Re: What % of net worth is your home?

Post by TheTimeLord » Tue Dec 23, 2014 11:02 am

Man, there are tons of really rich people here owning their homes outright and yet having it only be a single digit portion of their portfolio. So with homes being a $400,000-$1,000,000 assets we have a lot of $5+ million net worth with many breaching the $10 million mark. Outstanding.
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Cosmo
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Re: What % of net worth is your home?

Post by Cosmo » Tue Dec 23, 2014 11:18 am

TheTimeLord wrote:Man, there are tons of really rich people here owning their homes outright and yet having it only be a single digit portion of their portfolio. So with homes being a $400,000-$1,000,000 assets we have a lot of $5+ million net worth with many breaching the $10 million mark. Outstanding.
Perhaps but then again, I bet there are many Bogleheads whose home value is under $300,000.

Cosmo

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Re: What % of net worth is your home?

Post by surfstar » Tue Dec 23, 2014 11:24 am

0% (which is also the amount of time and money spent on repairs)

34 y/o, I rent.
Last edited by surfstar on Tue Dec 23, 2014 11:25 am, edited 1 time in total.

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Toons
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Re: What % of net worth is your home?

Post by Toons » Tue Dec 23, 2014 11:25 am

Steelersfan wrote:
Toons wrote:6% :happy
+1

:happy :happy

It's good to live a simple life as a retired empty nester.
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Re: What % of net worth is your home?

Post by Philociraptor » Tue Dec 23, 2014 11:30 am

(Z-Estimate of house value - Amount owed on mortgage) / Net Worth = -100%

Put in other words, the equity in my house is about equal to my negative net worth. Student loans FTL.

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TheTimeLord
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Re: What % of net worth is your home?

Post by TheTimeLord » Tue Dec 23, 2014 11:32 am

Cosmo wrote:
TheTimeLord wrote:Man, there are tons of really rich people here owning their homes outright and yet having it only be a single digit portion of their portfolio. So with homes being a $400,000-$1,000,000 assets we have a lot of $5+ million net worth with many breaching the $10 million mark. Outstanding.
Perhaps but then again, I bet there are many Bogleheads whose home value is under $300,000.

Cosmo
Still even if their home is $200,000 at 5% of Net Worth that puts them at $4 million. quite impressive. Although if I had $4 million I would probably take a few hundred thousand plus the home equity and build my dream house.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

sramina
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Re: What % of net worth is your home?

Post by sramina » Tue Dec 23, 2014 12:17 pm

41% or so. I'm 23 and my wife is 25. House is worth around $130,000 and we still owe most of that!

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Tycoon
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Re: What % of net worth is your home?

Post by Tycoon » Tue Dec 23, 2014 12:24 pm

8.03%
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Re: What % of net worth is your home?

Post by asif408 » Tue Dec 23, 2014 12:24 pm

surfstar wrote:0% (which is also the amount of time and money spent on repairs)

34 y/o, I rent.
+1 on both accounts.

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TheTimeLord
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Re: What % of net worth is your home?

Post by TheTimeLord » Tue Dec 23, 2014 12:33 pm

asif408 wrote:
surfstar wrote:0% (which is also the amount of time and money spent on repairs)

34 y/o, I rent.
+1 on both accounts.
Cost of maintenance and repairs is part of your rent.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

chaz
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Re: What % of net worth is your home?

Post by chaz » Tue Dec 23, 2014 12:34 pm

2.6%.
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Re: What % of net worth is your home?

Post by Boglegrappler » Tue Dec 23, 2014 12:39 pm

I've recently concluded that the ratio of your invested assets to your house is not a bad gauge of how set for retirement you are. The higher the multiple of your house value your net worth is, the more well fixed you are. Not sure what multiples correlate with what "adjectives", but it sort of self-adjusts for your lifestyle given that there is a correlation between that and the value of your house.

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Re: What % of net worth is your home?

Post by sls239 » Tue Dec 23, 2014 1:19 pm

LCOL at 34 and 40 yo.

Market value of home is about 1/3 the market value of the investment portfolio.

Home equity is about 1/16 of current total net worth. (13.5 years left out of 15 @ 2.85%).

I simply don't believe in a "forever" house. When we re-located for work, I took the opportunity to go from a layout with the secondary bedrooms close to the master (good for very young children) to a layout with secondary bedrooms at the other end of the house (good for older children).
Last edited by sls239 on Tue Dec 23, 2014 3:54 pm, edited 1 time in total.

rec7
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Re: What % of net worth is your home?

Post by rec7 » Tue Dec 23, 2014 1:33 pm

chaz wrote:2.6%.
That should be my goal.

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Re: What % of net worth is your home?

Post by fposte » Tue Dec 23, 2014 2:18 pm

Cosmo wrote: Perhaps but then again, I bet there are many Bogleheads whose home value is under $300,000.
Representing. Well under $200,000, in fact.

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Ice-9
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Re: What % of net worth is your home?

Post by Ice-9 » Tue Dec 23, 2014 2:33 pm

Early 40s in a high cost of living area.

Zillow value is 62% of net worth, using my account aggregator's definition of net worth (which includes home equity but does not include present value of future SS like the annual net worth survey on this forum.)

Equity (Zillow value minus remaining mortgage) is 12% of net worth.

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Re: What % of net worth is your home?

Post by DVMResident » Tue Dec 23, 2014 2:52 pm

Early 30's, high cost of living area (So Cal):
Equity when purchased in 2012 was ~50:50 of our net worth.
Today, our net worth has ~tripled. Between mortgage pay-down at the scheduled rate and a hefty appreciation in our area, our equity is ~55:45.

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Re: What % of net worth is your home?

Post by fanmail » Tue Dec 23, 2014 3:01 pm

38%, 35 y/o, own outright

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Tortuga
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Re: What % of net worth is your home?

Post by Tortuga » Tue Dec 23, 2014 3:04 pm

Steelersfan wrote:
Toons wrote:6% :happy
+1

:happy :happy

It's good to live a simple life as a retired empty nester.

+2
:happy :happy :happy

Tortuga

Rodc
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Re: What % of net worth is your home?

Post by Rodc » Tue Dec 23, 2014 3:09 pm

By any known official or semi-official definition I have ever seen the value of your home is part of your networth - it just is, look it up, networth is the value of all your stuff minus your debts. Now some stuff like your clothes might be such a small percentage (used clothes are worth next to nothing) it is not worth considering, so I understand cutting off the accounting somewhere. But a house has significant value. Might be hard to pin down that value to better than +/- 10% or so, but so what?

Value is about is ballbark 60%, value - remaining mortgage about 33%. Over the last 20 year the price is up about 300%. If it were barely up the percentages would be lower and many here seem to think somehow that would be a good thing. :confused

While some might consider those values high, we have enough coming in SS, and multiple pensions that we could skip saving at all and be in pretty good shape, so I am not concerned. Not to mention we could sell in our high cost area and move to a low cost area, buy a nice house and end up with the value at 20% if we so choose. Or even 10%, or of course 0%. So it is unclear why the value today really matters.

Which brings up the issue that the value is highly dependent on where you live now which might not be where you live later.

Plus there the whole rent vs own. Is 0% good or bad? All depends.
Last edited by Rodc on Tue Dec 23, 2014 4:07 pm, edited 1 time in total.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

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Re: What % of net worth is your home?

Post by travellight » Tue Dec 23, 2014 3:26 pm

Clearly, home equity is part of net worth, Rodc. You can have two people who both have 100K in the bank but one person rents and the other has a 2 million dollar house paid off, they have different net worths. Question though, do you count your pension in your net worth?
364

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Re: What % of net worth is your home?

Post by curmudgeon » Tue Dec 23, 2014 4:10 pm

Home is about 40% of net worth (at age 55). I consider that high if we were to retire today (though our lifestyle is not as expensive as the house value might imply). We could buy an equivalent house in a lower COL area for about a third of the price here.

11 years ago when we bought the house, I said that when/if we hit $500K in appreciation, it would be time to sell. Looking at comp sales, that time seems to be here. Problem is, we've really grown to like the house, and we're not quite ready to retire and move, so we will probably put off selling for a couple of more years. If we sell in the year we retire, hopefully the tax hit won't be too bad. I have to remind myself that life is not all about avoiding taxes.

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Re: What % of net worth is your home?

Post by angelescrest » Tue Dec 23, 2014 4:11 pm

Op, we are in a similar stage in life, and the SFH equity (haven't paid off much at all other than 20% down payment) represents some 18% of our net worth. It's LCOL, although incomes are low here, too, and our home's value is well over twice the median home value in the area. It's more house than we need, but we are growing into it and could live in the house easily through kids schooling. Fortunately LCOL means we can do it; if we were still in expensive previous HCOL area, we would still be renting for a very long time. Location matters.

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Re: What % of net worth is your home?

Post by Rodc » Tue Dec 23, 2014 4:16 pm

travellight wrote:Clearly, home equity is part of net worth, Rodc. You can have two people who both have 100K in the bank but one person rents and the other has a 2 million dollar house paid off, they have different net worths. Question though, do you count your pension in your net worth?
Looking up thread it apparently is not clear to all. :)

Agree your question is more interesting. I say no because I don't own the pension and can't leave it to someone in a will, etc. so it is not an asset. But clearly ( :) ) it is very important to fold the expected cash flow into an analysis of financial health, ability to retire, ability to handle risk, etc. Given that it is future cash flow, I treat it as, well, a future cash flow. Seems simplest to treat it as what it is.

One can convert a pension to some sort of lump sum, say thinking of the so-called 4% rule, one can multiple the yearly income by 25. There are other schemes as well. Then you add it to whatever else you have. Then to plan your retirement you apply your 4% rule (if that is what you are using) to get a cash flow which you compare to your cash flow needs. So you multiple by 25 then divide by 25. Seems pointless. :) But one can do that if they wish. If done carefully one should get the same answers to whatever question one has (readiness for retirement, setting allocation based on risk assessment, etc. )
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

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Re: What % of net worth is your home?

Post by kaudrey » Tue Dec 23, 2014 4:30 pm

We are early/mid 40s.

1) Primary home equity as % of NW = 23%
2) Primary home value as % of NW = 36%

We also have a cabin in the mountains; those #s don't include that.

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Re: What % of net worth is your home?

Post by dcdowden » Tue Dec 23, 2014 4:45 pm

We are in our early 60's in HCOL area and the house we have owned for 20 years is about 19% of net worth. The house is worth more than we payed for it, but it could not be considered a good investment compared to the homes we owned in the 70's and 80's when inflation was rampant (mortgage interest rates of 8-10% or higher). It seems that the lack of real income growth for the majority of people and the high student loan debt for the next generation of homeowners have been a drag on the housing market.

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Re: What % of net worth is your home?

Post by NoMoreInvestingExcitement » Tue Dec 23, 2014 5:26 pm

HCOL area
50-ish

Home equity = 13% of net worth, which includes only investments, savings & home equity.
Unlimited online financial info's great, but I'd rather my compass just kept working.

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Re: What % of net worth is your home?

Post by scrabbler1 » Tue Dec 23, 2014 5:41 pm

truenorth418 wrote:10%. NYC co-op apartment. Home is paid off.

I include it as part of total net worth, but it is not in itself meaningful since it is not part of investable assets which drive my retirement calculations.
About 7% here, a small co-op apartment on Long Island. Mortgage paid off in 1998.

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Re: What % of net worth is your home?

Post by jfn111 » Tue Dec 23, 2014 5:53 pm

travellight wrote:Clearly, home equity is part of net worth, Rodc. You can have two people who both have 100K in the bank but one person rents and the other has a 2 million dollar house paid off, they have different net worths. Question though, do you count your pension in your net worth?
I counted my pension. Otherwise house is about 12%

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Re: What % of net worth is your home?

Post by gerrym51 » Tue Dec 23, 2014 5:58 pm

10 percent

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