I was looking at my documents folder and looking to clean out old files. I do this periodically, which is to say once every few years. Sometimes I come across interesting things. You see I tend to document a lot of my decision processes and especially when I am communicating that idea to another person.
I have found that I think better and more clearly when I take some time to think it through. When I am making a decision based on something empirical then I really want to keep a record. I think this is common, it’s just that I tend to do a lot of that stuff digitally, and I tend to store it on my computer or on a flash drive.
This habit was in full force when we were house hunting back in 2011. We certainly were carefully reviewing our finances and our ability to pay for what ultimately became our home. I have a lot of documents from that era.
The truth is that I forgot about them when I started this blog, and well, now I will blog about it. A few times since then, I recorded some more financial information. I summarized that here.
I know people like real numbers, but my wife is not comfortable with me posting that stuff. Initially, I was not, but over time, I have become more comfortable with the idea. Still, a promise is a promise, and I keep mine.
I will say this much, though, our net worth, including retirement, was about as much as the prices of our home when we purchased it. We had enough cash at the time of the purchase to put down about 25% of the purchase price, and then the rest was mortgaged. We have added two air source heat pumps to the house. We had it painted, and painted it ourselves. I don’t paint two story rooms, but the rest I did. We furnished the place; we came from NYC, so we didn’t have much. We replaced the appliances, and this coming year we are going to replace the deck. In a few years we will do the kitchen and the basement.
In spite of all of that, we are not spending all that much money, and as I have said in other posts, we have a high savings rate. That plus the great bull market, and now our net worth is three times what it was when we bought this place. I’d say that’s pretty cool. Our non-retirement investments could be liquidated to pay off this place. We are not doing that, but we are paying 1/3 of our remaining balance into the value of the house.
|Time||% Increase from 4M Pre Home Ownership||% Retirement Savings||% Home Equity|
|4 Months Before We Bought House||0.00%||55.16%||0.00%|
|2 Weeks After||0.00%||55.16%||21.15%|
|1 Year After||34.01%||57.70%||18.31%|
|2.5 Years Later||66.84%||58.82%||15.21%|
|Today (7 Years Later)||194.06%||59.64%||15.24%|
One thing that I noticed in looking at the data is that the portion of our net-worth that is tied up in our home is going down and the portion of our retirement savings is going up by the corresponding amount. The portion of our non-retirement savings has been steady as we have grown our net-worth. I’m not sure what that means. My gut tells me that we are doing well in that regard.
Here’s to hoping that next seven years is as good to us as the last seven were. And of course the birth of our son is more important than any of this, but I think that goes without saying.