I’m 43 years-old and have a 100% stock portfolio. We just paid off our house that is 20% of our total net worth. Housing prices in our area have been appreciating 5% per year lately. Is there any rationale to treat paying off your house similar to a bond investment early in your career (conservative return on investment)? I’m thinking about gradually moving to 85/15 split by the time I’m 50 while working toward Fat FI.
I count my residential rentals as my bond type allocation but tend to keep my primary residence out of the equation completely. Although your area might remain steady I wouldn't count on the growth continuing at that rate. If you are certain you will eventually sell the home and downsize it is likely a reasonable approach. Important to remember however real estate isn't liquid and in many cases people either can't or more likely won't wait until the market corrects when they want to move which could derail your strategy.
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