Everybody Loves Your Money

A large chunk of people’s wealth is tied up in their homes. There are lots of factors that affect home price and there are lots of things that you can do to increase your home’s value. Unfortunately, there are a few things that can negatively impact your home value and the neighbors you have are right up at the top of the list.A few years ago, I decided to move in to a neighborhood that has a homeowners association. Sure, there’s always a bit of drama in those neighborhoods, but it’s worth it to me. I like the idea of having rules that EVERYONE has to follow. Every now and then, I’ll be driving through another neighborhood without those rules and see a house that just shocks the heck out of me. Cars parked on the lawn, junk all over in their yard, house in disrepair. Every time I see a house like that I wonder what their neighbors must be thinking. It’s obviously pulling down their home values. While I’m sympathetic to those neighbors, I also can’t help but look at the junky house. It’s like a train wreck.

So, we decided to build a site where neighbors can vent and share the view out their window. As bad as the houses seem to be near my neighborhood, I’m sure there are FAR worse out there.

Check it out at: http://www.parkitonthelawn.com

Well, as some of you may have noticed, I took down the details of our net worth.  I did this for a couple reasons.  I decided that I didn’t want to put that level of detail out any more and not long after making that decision, a few of my friends discovered this blog.  Don’t get me wrong, I’m not ashamed of where our net worth is at.  Actually, I’m pretty happy with where we are at relative to our age bracket.  But, now that the cat is out of the bag on this blog, it’s probably better to speak about it in more general terms.  So, here are the trends:

Breakdown of Assets:

Home equity: 63%

401K: 20%

Misc Investments: 7%

Vehicles (paid for): 10%

Appreciation Trend:

Our net worth is appreciating at approximately 2.3% each month.  That works out to be more than our monthly gross income so we are quite happy.  Part of this is due to home equity gains and investment returns, which have been pretty positive lately.  Obviously both of those things are not going to yield that kind of return forever so we may see it slow in the months ahead.  Regardless, we are actively saving and are still seeing a savings rate of about 30% each month.  While I’m a little uncomfortable with such a high portion of our net worth wrapped up in equity, there isn’t much I can do about it.  The real estate market has gone up drastically over the 8 years that we’ve owned a home.  We will not take out any of this equity for investing elsewhere so we’ll just have to deal with the large equity amount.