Comments on: How much to spend on a house?

By: If you were interviewing me …- 7million7years

If you were interviewing me …- 7million7years — Fri, 22 Jul 2011 23:23:39 +0000

[...] 6) For those unfamiliar, what would be some representative posts? I really like this one, because it encourage you to start thinking externally rather than internally, which is the first step to financial freedom: http://7million7years.com/2011/05/24/my-circle-my-prison/ And, this one because it shows that WHERE you invest your money is more important than HOW MUCH you put aside each week or month: http://7million7years.com/2011/05/26/the-pay-yourself-twice-wealth-strategy/ Finally, this one, because it introduces the 20% Rule that tells you how much you can spend on a house: http://7million7years.com/2008/02/04/how-much-to-spend-on-a-house/ [...]

By: sisca dee

sisca dee — Sun, 12 Jun 2011 15:36:40 +0000

Hi..Adrian,
Interesting reading as always!
Another thing I know I struggle with is moderating my expectations for my own personal home to ensure that my long term goals of financial independence are kept in sight.

By: How much interest do you earn on one million dollars?- 7million7years

How much interest do you earn on one million dollars?- 7million7years — Tue, 08 Dec 2009 03:16:15 +0000

[...] How much house you can afford, then click here, [...]

By: Adrian

Adrian — Fri, 13 Nov 2009 05:21:17 +0000

@ rufusmcbufus – valid points, but you might be “plain out missing something” … the point here is to not OVER-INVEST in your own home; if you like, try to think of this another way: always be investing at least 75% – 80% of your net worth (in something that YOU feel comfortable investing in e.g. stocks; mutual funds; RE; gold; etc.)

By: rufusmcbufus

rufusmcbufus — Thu, 12 Nov 2009 22:17:02 +0000

I can’t shake the feeling you guys are plain out missing something. You’re strategy assumes house prices ALWAYS GO UP. THEY DO NOT as completely proven by the last three years. If you’d been following this strategy in, say, Crapafornia since 2003 you would have been absolutely pantsed doing this. Lemme see, I take out equity every time my house every time it appreciates beyond 20% of my net worth as dictated by inflated asset prices. Great. Until 2007 where some houses literally fell by half pretty much putting even Mr. 20% equity underwater and in an un-refinancable position. How do you suggest one deal with this scenario?

By: 7 miljoonaa 7 vuotta- 7million7years

7 miljoonaa 7 vuotta- 7million7years — Mon, 02 Nov 2009 08:07:29 +0000

[...] http://7million7years.com/2008/02/04/how-much-to-spend-on-a-house/ http://7million7years.com/2008/02/04/how-much-to-spend-on-a-house/ [...]

By: What’s behind Door Number 2?- 7million7years

What’s behind Door Number 2?- 7million7years — Thu, 10 Sep 2009 13:25:41 +0000

[...] me explain by introducing you to a new reader, Lee, who asks: I’ve been reading about this 20% rule and it does make sense, but after what happened with real [...]

By: Adrian

Adrian — Tue, 08 Sep 2009 00:41:21 +0000

@ Lee – Great! I think you have your answer

By: Lee

Lee — Mon, 07 Sep 2009 19:10:18 +0000

@ Adrian

To answer your questions…

1) Yes, as far as what I do for a living which I really enjoy, I would like to retire somewhere between 50-55. Maybe I’ll work longer or shorter, but the main thing I want to ensure is that I don’t have to work beyond that 50-55 time frame.

2) Well, honestly, I live very well below my means and I actually enjoy that from the standpoint of my life is simple. I don’t drive fancy cars or have a huge home because those things don’t interest me. I do have a passion that does interest me, and would like to pursue at some point again.

3) As far as retiring by no later than 55, yes my current path will easily provide for that. If I choose to the pursue the passion I mentioned earlier, then that would impact the amount of money I would need in the short term, but would not affect my long term retirement goals.

By: Adrian

Adrian — Mon, 07 Sep 2009 03:12:59 +0000

@ Lee – perhaps I misunderstood, so let’s backtrack a little:

1. Do you have a Date in mind, when you REALLY want (nay, NEED) to stop working so that you finally have time to live your Life’s Purpose?

2. Do you have a Number in mind, that represents how much you need in your nest egg (be that the bank, ‘passive’ investments, your house – although, you may need to think how you plan to access those funds to live from – etc.)?

If not, I suggest that’s your first task: think about your Number and Date. Already (or just) got them?! Good … now;

3. Will your current financial plans and strategies get you to your Number by your Date?