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I wouldn't really consider equity on a house as part of this. Housing prices do drop. We have seen two significant corrections. Once just after we bought our first house. House dropped in value from 140K to 120K within a year. And then the recent drop when around 2010/2011 our house dropped from 550K to 600K to near 300K.
And really the same would go for Stocks. If you have $100K in stocks and your portfolio sees a major correction, you don't have $100K anymore.
So based on that, I am not even close. If I have some faulty trust in the housing market and stock market I am above it. :O)
Most calculations of net worth include housing equity. Housing just like stocks can be volatile in the short run, although housing is less volatile then stocks comparatively speaking. If we are just talking about your primary residence, buying and holding will almost always end with you having significant equity in your house regardless of drops that may come in real estate prices. Most people concentrate on "what just happened" to determine value of an investment. 2006-2007 real estate crash was an anomaly. Using that as an indicator of fluctuations in real estate prices will lead to extremely inaccurate predictions.
Most calculations of net worth include housing equity. Housing just like stocks can be volatile in the short run, although housing is less volatile then stocks comparatively speaking. If we are just talking about your primary residence, buying and holding will almost always end with you having significant equity in your house regardless of drops that may come in real estate prices. Most people concentrate on "what just happened" to determine value of an investment. 2006-2007 real estate crash was an anomaly. Using that as an indicator of fluctuations in real estate prices will lead to extremely inaccurate predictions.
An anomaly really, you must not have lived in Texas during the early 80s. My house is mortgage free and still only include cash, stocks and bonds in my net worth. I also don’t believe that $100K sitting in checking account is a bad thing. I’m old and may need it for something and my investment are more than we will need.
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An anomaly really, you must not have lived in Texas during the early 80s. My house is mortgage free and still only include cash, stocks and bonds in my net worth. I also don’t believe that $100K sitting in checking account is a bad thing. I’m old and may need it for something and my investment are more than we will need.
Going by local or regional fluctuations and attempting to ascertain the future value of a property would be nothing more then speculation. I'm aware of the Texas market in the 80's as well as other market drops. Although those situations are completely relevant to the locals living there; they are irrelevant in ascertaining overall value of housing in the US.
In general, what I stated is an accurate assessment of the US housing values. Just like stocks they have had fluctuations over the years. However, currently stocks are at their highest point in history. Housing with the exception of the 2005-2007 anomaly years are also valued the highest they have been in the history of the US.
I'm not saying home ownership (primary home) is a good investment. However, it is an investment that has historically shown to rise in price and should certainly be counted towards your net worth. Also, when you delve into investment properties then housing becomes a legitimate and serious investment.
I'm 33, married with 3 kids (turning 4) and I have $80,000 savings which I forcefully saved for 7 years (5% interest rate). Not including the home equity and 6 mutual funds I have overseas. I got married early (I was only 26) and raising a big family took the big chunk of my savings. I'm still happy with my savings and hoping to use it to buy property here (to roll it over) so I might start with zero again haha!
25 at my current age. But I got lucky getting in the market was at its low in 2009. I also had the luxury of living at home and paying $200-$300 for rent for most of the time and saving 70% or more of my gross.
25 at my current age. But I got lucky getting in the market was at its low in 2009. I also had the luxury of living at home and paying $200-$300 for rent for most of the time and saving 70% or more of my gross.
You are on track to financial independence by around age 30 if you save that much. That's awesome!
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