Is Your Nest Egg Your House? Might Be a Bad Move . . .
I know people who have few financial assets and when asked about their nest egg, will point at the ceiling and say, "The House!" This problematic because you can't liquidate part of the house to pay your expenses.
They are painted into a corner because they really only have three options to access the cash:
- Sell the house-- not a good option, if you need or want to live in the house
- Get a home equity loan-- not always easy or attractive when you are retired on a limited income
- Do a reverse mortgage-- not very attractive either, usually filled with fees and charges
The answer is be sure to build liquid financial assets outside of your home . . . cash, brokerage accounts, retirement accounts, etc.
I'm doing a related post, that will go up after this one that explores this issue from a slightly different perspective.
Posted by DDFD at 11/20/2008 8:22 PM 
Categories: Personal Finance, Self Sufficiency, Frugality
Tags: Personal Finance Self Sufficiency Frugal Frugality
Categories: Personal Finance, Self Sufficiency, Frugality
Tags: Personal Finance Self Sufficiency Frugal Frugality
One alternative here would be to sell when the market is up, and then rent somewhere. Then you need discipline to keep your hands off that emergency fund.
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You also need the discipline to sell when the time is right and not "wait a little longer" for a few thousand more that never came for some at the end of the latest bubble . . .
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Please write more about this interesting idea.
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Thanks-- glad you like the post. I will be glad to expand upon this topic. Unfortunately, it will have to wait a week or two.
I haven't announced it yet, but I am taking a few days off for my first real vacation in years. Monday's posts will be the last of the week until Friday night or Saturday morning.
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