Feeling rich and poor, simultaneously
February 27, 2017
What would it take for you to feel rich? Specifically money rich? Joe at Retire by 40 asked.
I feel rich and poor at the same time. A very strange feeling, that. I told Joe that we’re at this weird crossroads of nearly being there, for us, and then having the rug pulled out from under us with the house thing. It wouldn’t matter in another COLA but it matters a great deal here.
About 80% of our assets are invested in real estate and the stock market, intentionally. That was a long term plan I developed based on the assumption that we would pay off this mortgage in approximately 7 years. During that time, we’d go on to save at least half the same amount of cash that we do each year now, and invest that cash. At the end of 7 years, I’d legitimately feel wealthy, if all went according to that outline.
Ignoring those categories of assets, as I do in covering a contingency of this size, we’re not near the shouting distance of the neighborhood of rich.
It would be shortsighted to sell off our budding portfolio or rental property and I’m not prepared to toss either of those to the winds. It would require a far bigger catastrophe for me to be willing to liquidate our long-term assets.
On the other hand, a couple weeks ago, I started the conversation with our lender. Apparently he thinks we’re great borrowers and is totally competent as well because after 4 days, he approved our loan for a vast sum. (This is in stark contrast to our refinancing with SoFi that took almost six months. I’m at least a little bitter that I wasted all that time, now!) I don’t even like to think the number, but it’s real: $800,000.
Even with that large a loan, we’re still priced out of most homes in this area. Even smaller places, and more rundown places, than what we have now are running more than $1M. I’m just not willing to take on more debt than that.
Pardon me as I shudder in the corner for a while.
Safe to say, where we are right now? Weird. I also don’t like our financial stability to be dependent on “as long as nothing else goes wrong” because in my experience, that’s an open invitation to my old friend Murphy to come kick me in the ribs.