As I hinted at in the retire early thread, I have a hard time factoring in the home equity into “wealth” calculations. You can’t spend a house and if you want to live in it, you can’t sell it. Home equity is only wealth when your ready to sell. If the bulk of your wealth is in an illiquid asset that you’re unwilling to sell, are you really wealthy?[/quote]
I TOTALLY agree with you UCGal. I don’t think anyone should be factoring in any home equity or supposed home equity in their retirement assets. Even if the home is paid for and worth a million bucks. I still think you have to count any assets besides your asset in your home.
As you mentioned, home equity is only wealth when you are ready to sell but also IF you are able to sell it. I think anyone counting their equity in their home in their retirement plans isn’t being conservative enough.
Sdsurfer,
Yes, absolutely safety is a big factor. There are some gorgeous places around the world that are wonderful to visit for a vacation of a few weeks or even a few months but living there full time isn’t the best or the easiest.
Some places the cost of living can be GREAT but there can be safety issues to deal with. Then other places the real estate might not be as expensive as San Diego but the utilities can be sky high. Some places I own I was getting $500 a month water bills!
Even in some beautiful cities that aren’t dangerous you still have a hassle factor of petty crime. I owned a house a few blocks from the beach in Punta del Este, Uruguay (“St. Tropez of South America”) and while it is VERY safe there, the summer is only the real time that it’s busy. Many houses are owned by wealthy owners that only use it during the summer. So you have to deal with break ins the rest of the season.
I had my house broken into twice even having a good security system and also being a few doors down from a police station. Both times they got expensive LCD TV’s where they are 300% more expensive than in the USA. And to make it worse, thieves figured out that they can rob people even during summer so they will go in and rob their houses while they are at the beach.
So you have things like that you have to deal with in some locations.
In other countries you have to deal with corrupt police or run away inflation. In countries like Argentina, where I own properties, you have 25% to 30% ANNUAL inflation. So your expenses go up each year typically by large amounts. Or if you have employees, you’re forced to give 25% to 30% a YEAR raises mandatory by law!
In places like Rio de Janeiro, Brazil where I bought many years ago….yeah the place is worth a LOT more than a decade ago but with the horrible fluctuation in the exchange rate, things are much more expensive. It’s more expensive there vs. the USA with many things. Plus even in exclusive and expensive areas like Ipanema, you have luxury condos not far from the slums. And again you have to deal with crime.
So you just have a multitude of things to deal with vs. the USA. For as many problems and issues that the USA has…people don’t realize how wonderful it is to live in and the excellent quality of life.
In other places it just comes down to tons of red tape and not efficient to be full time. Like not getting mail or it constantly getting lost, waiting in line at the post office up to 2 hours to get a package, waiting in lines for up to 45 minutes at the grocery store, power outages, etc.
Like I said before… San Diego is paradise. Yeah, there are many pikers here but I agree with sdrealtor that San Diego North County is full of truly affluent as well that are living within their means. It’s all relative…
