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0 pointssokoloff7y ago0 comments

An appreciating asset bought with leverage provides one of the most readily available means to go from "I am in the bottom quartile of net worth" to "I have at/above the national median net worth".

I did buy basically the most expensive house we could afford (slightly less than the most expensive we could qualify for) in 2007 in a desirable city. That decision (vs continuing to rent or buying a $500K condo in that city) has likely added more to our net worth than our working for the last decade did. We bought it as a place to live and raise a family, but the financial upside (as yet still an unrealized gain) is large enough to not ignore.

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benj1117y ago

That's with the benefit of hindsight though.

Were you thinking the same in 2009?

sokoloffOP7y ago

For us? Yes. We were still thinking that this is a good place to live and raise a family (that we just started that year).

On the money side, I continued to believe throughout the GFC that Cambridge, MA was going to continue to be a desirable place to live and work. I don't think the Zillow guesstimate on our house ever fell more than 5% below our purchase price, which was vastly better than our 401(k)s and brokerage accounts. (I changed my personal finance tracking spreadsheet in 2013, so I don't have records of house price estimates prior to then to confirm and Zillow only seems to go back 10 years.)

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