I have been wondering how net worth and housing costs and real estate fit together for people.
Since we own our current house outright, I just don't count it as part of our net worth. But now we are looking at a mortgage, which would come with a debt, so I would count it in that circumstance, and then subtract the debt.
But what do you all do? Do you apportion a certain percent of your money to be in real estate, and do you include your personal residence in that? I can see a rental property, that makes total sense, but what about your personal residence. I figure you have to live somewhere, and would pay rent without it, but easier to figure without it, unless I have a mortgage.
Do you all have a guideline of no more than x percent of your net worth in your residence, for example?
Or maybe if it's paid off, you just don't consider it?
Am trying to figure out asset allocation on the whole picture, I guess, and not just in the stock/bond portfolio.
Some people take out of their retirement portfolio to purchase with cash. That scares me, as I would lose ability to generate income on that money and to grow it tax deferred.