All Debts (including home mortgage): 319.5K. Liquid Assets: 302.5K. Debts – Liquid Assets = 17K.
That metric has fallen from 75K in December to 17K now, which is a change of 57K. This change is mostly coming from bonus income and stock appreciation. I don’t expect this number to go down much more until August/September.
At some point I need to start making decisions on how/when to make some of our larger spending purchases. A bunch of home purchases coming up. Windows and doors. 10-15K for doors (we have a whole entire wall of doors that need replacing, but may go with windows on one side instead). Maybe 10K for rear windows. New appliances, or new kitchen (7500 for appliances, another 10-20K if we do a full redo). And then there is the roof thing, probably about 30K, possibly more.
I want to do our closets, but since I will providing the labor, that will be less than 2K. Probably some exterior carpentry and paining, and possibly interior painting. 10K. These things really add up. This is really an advertisement against home ownership. All the different costs associated with this could easily add up to 100K over the next 5-10 years. Easily 10-20K a year in expenses which is crazy. On top of a mortgage and real estate taxes (that don’t provide me any tax benefit anymore). Of course I will have an asset that will be able to clear 700,000 dollars, but at a total expense of nearly 1 million (100-200K of home owners expenses like windows, roofs, etc, 200K of interest on loan and the actual purchase price of the house).
Make home ownership look like a bad choice, however would easily spend the same amount or more over 30 years for a rental and then have no residual value at the end of it. So home ownership for the win, even though it sucks to outlay some large amounts at once for repairs etc.
When comparing rents, I think our house rents for about 3000 a month, so that is a million dollars over 30 years with nothing to show for it. Plus rents will increase (and 3000 is a conservative number). Also our house could potentially appreciate (or depreciate). Either way, you spend about the same amount over the same period… but at the end of a mortgage you can sell your house so you will likely recover somewhere between 50% to 150% of what you spent . Renting you end up with zero. At 50% return (say I spend a million and return 500K when I sell), you can look at prices of rents and see if there is anything that might save you over the long run, but there is likely to a compromise and add some uncertainty. In other words, to make things work you would need to spend less than 500K over a 30 year period on rent. Even to rent a 1 br apartment for 30 years you end up spending more.
So houses… a necessary evil. Probably the best you can do is buy a house that requires the least amount of upkeep (I’m thinking townhouses in the long run). Condos have the instability of condo fees …. which often can equal rent payments over the long run if not run correctly. Also areas where taxes are lower and/or appreciation potential is higher make it a more attractive investment.