Always a joker in every crowd!Non7WoodUser wrote:Rodc wrote:A) has $10M house, paid for, no savings, then gets laid off at age 59 and cannot find a jobThe annual expense = X. When their net worth (excluding the house) is equal to 25 times X, they are financially independent. In fact, it simplifies everything.
B) has a $1M house paid for, $100K in savings, then gets laid off at age 59 and cannot find a job
C) rents, $200K in savings, then gets laid off at age 59 and cannot find a job.
Which one would you prefer to be and why?
By your accounting which appears to in the best shape?
C) Cash is king.
I'll take A and sell the house in a couple of days for $5M-$8M and buy the $1M house from B and have $4M-$7M left over in cash, B will have $950K or so after the sale and rent your apartment you can no long afford on the $40K or so yearly income* they can generate, since $200K will generate about $8k of yearly income for you and you will be out on the street..
(actually they could take more income since they only need to cover a few years before SS kicks in)