What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
feh
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by feh »

1) 11%

2) 11%
checkyourmath
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by checkyourmath »

1. 0%
2. 0%

I went 100 percent cash in July of 2019 when we were denied renting a home in a Denver suburb. The landlord required tax returns, portfolio balance, and pay stubs along with a credit check. Our household income is around 190k I am an engineer and my partner is a professor. I have been working post college for about 15 years. I love this question it is super interesting!
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jfn111
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by jfn111 »

I'll play. Paid off house is 16.4% of net worth. No other RE holdings.
aszend
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by aszend »

1. 18.4%
2. 64.8%

I'm basing my primary residence's value off of Redfin's estimate, which I believe to be quite less than its real market value. These figures also do not include REIT's. If we excluded our investment property, it would be 16.1% and 61.7%,respectively.
Stoic9
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by Stoic9 »

Thanks, I like these questions because they make me do the math....
NW

Stocks: 53%

Bonds: 9%

Cash: 3%

RE: 35%
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tennisplyr
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by tennisplyr »

25%; 25%

My guess is that for most people, the % of net worth that is home equity is not a targeted investment strategy. Mine is function of the value of the home that I bought and the desire not to have a mortgage and how much I was able to attain with my portfolio not some desired goals.
Those who move forward with a happy spirit will find that things always work out.
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btax80
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by btax80 »

Stocks - 48%
Bonds - 18%
Cash - 24%
Home Equity - 10%
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mak1277
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by mak1277 »

6% is the answer for both questions. House is fully paid off.
SQRT
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by SQRT »

About 18-19% of net worth for several personal use properties (no mortgages). Retired, 70 years old. We have done this one many times. Was interesting first few times. Not any more.

The take away is that it usually depends on two main things :

1) stage of life. Most young people will have a high percentage, most retired people much less.

2) where you live. SF versus Tupelo. This should be mostly self evident?

As long as you can afford your house this metric may not be very useful. It tends to be more useful when retired because for retirees much of their cash flow comes from investments. A more expensive house will mean a smaller portfolio resulting in less cash flow. So it’s a balancing act. Seems like for retired people the ratio usually seems to be 10-20%. But obviously this can vary depending on personal circumstances.

Edit to add: may I suggest that if you don’t think personal-use real estate should be included in NW( the basic premise of the OP) just ignore this thread. We don’t need another round of that silly debate.
Last edited by SQRT on Fri Nov 20, 2020 3:41 pm, edited 1 time in total.
lostdog
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by lostdog »

TrollToll wrote: Mon Nov 16, 2020 12:52 pm Renter here.

1) 0%

2) 0%
+1

Net Worth is all liquid here. Stocks and cash.
Brokerage: VTI+VXUS || Retirement: VTWAX || Short-Term: Cash+BSV || 33x Expenses
alfaspider
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by alfaspider »

Age 35, with a home we just bought last year:

Home equity: ~20% NW
RE value: ~65% NW
flaccidsteele
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by flaccidsteele »

It’s difficult to have a large % of NW in a home when most of assets are invested
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
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MrBobcat
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by MrBobcat »

No debt and only real estate is my home and my office. Zero desire to own any more.

House approx 13%
Office building approx 19.5%
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Orbuculum Nongata
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by Orbuculum Nongata »

% Home Equity= 20%
% N.W. = 20%
Potential - distraction = performance.
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LFKB
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by LFKB »

tennisplyr wrote: Fri Nov 20, 2020 8:07 am 25%; 25%

My guess is that for most people, the % of net worth that is home equity is not a targeted investment strategy. Mine is function of the value of the home that I bought and the desire not to have a mortgage and how much I was able to attain with my portfolio not some desired goals.
I don't expect it to be a targeted investment strategy for anyone. I was simply curious as to what the range of outcomes are.

I am surprised that there are not more people that are over 100% for question 2. Many people where I live are (i.e. they could not pay off their mortgage with all their assets).
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LFKB
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by LFKB »

davemanjam wrote: Wed Nov 18, 2020 9:52 am By definition the equity in your home counts towards net worth.
You can have some other metric that you define a different way, but its not "net worth".

I guess facts and definitions don't matter anymore in 2020 though.
I have no idea what your point is...I asked what percentage of your net worth is home equity. I never suggested home equity was not counted in net worth.
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beernutz
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by beernutz »

LFKB wrote: Mon Nov 16, 2020 12:50 pm Curious to see what the breakdown is...

1. What % of your net worth is in home equity (including vacation or rental properties to the extent you have them)?
Example: if you have $100k equity in your home and $1M net worth then 10%

2. How much is the total value of your owned real estate as a % of your net worth?
Example: if you own a $500k house and have a $1M net worth then 50%
We own two residences whose total value together is 16% of our net worth.
One has a mortgage equal to about 1% of our net worth so 15% of net worth is in home equity.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. --Will Rogers
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HomerJ
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by HomerJ »

LFKB wrote: Fri Nov 20, 2020 2:01 pmI am surprised that there are not more people that are over 100% for question 2. Many people where I live are (i.e. they could not pay off their mortgage with all their assets).
That's probably mostly a function of age, right?
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
HootingSloth
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by HootingSloth »

LFKB wrote: Fri Nov 20, 2020 2:01 pm
tennisplyr wrote: Fri Nov 20, 2020 8:07 am 25%; 25%

My guess is that for most people, the % of net worth that is home equity is not a targeted investment strategy. Mine is function of the value of the home that I bought and the desire not to have a mortgage and how much I was able to attain with my portfolio not some desired goals.
I don't expect it to be a targeted investment strategy for anyone. I was simply curious as to what the range of outcomes are.

I am surprised that there are not more people that are over 100% for question 2. Many people where I live are (i.e. they could not pay off their mortgage with all their assets).
Right now, we are at about 35% and about 50% for the two questions. When we first bought the house a couple of years ago, I think question 2 was much closer to 100% or maybe even slightly over. I guess that Bogleheads are likely to save up more as investments before buying a home than the average bear.
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LFKB
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by LFKB »

HomerJ wrote: Fri Nov 20, 2020 2:12 pm
LFKB wrote: Fri Nov 20, 2020 2:01 pmI am surprised that there are not more people that are over 100% for question 2. Many people where I live are (i.e. they could not pay off their mortgage with all their assets).
That's probably mostly a function of age, right?
Age and location, yes
MarkRoulo
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by MarkRoulo »

LFKB wrote: Fri Nov 20, 2020 2:01 pm ...

I am surprised that there are not more people that are over 100% for question 2. Many people where I live are (i.e. they could not pay off their mortgage with all their assets).
Question 2:
2. How much is the total value of your owned real estate as a % of your net worth?
Example: if you own a $500k house and have a $1M net worth then 50%
My wife and I were WELL over 100% for question (2) when we purchased our house. We put 10% down and had *some* cash cushion, but the total value of our "owned" real estate was probably around 500% of our net worth (to *illustrate* with numbers not ours: $100K house, $10K down, $10K cushion so net worth of $20K and real estate value of $100K).

But our percentage today is closer to 40%.
macheta
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by macheta »

1. 22%

2. No other real-estate and no REIT's.
Last edited by macheta on Sat Nov 21, 2020 10:08 am, edited 3 times in total.
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Iowa David
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Re: What % of your Net Worth is Home Equity? What % is total value of RE relative to net worth?

Post by Iowa David »

1. 21% (home is paid off)
2. No other direct real estate except for what may be in a REIT from other index funds
"Just a 1 percent difference in expenses makes an 18 percent difference in returns when compounded over 20 years." The Boglehead's Guide to Investing
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