avacohen100[at]yahoo.com wrote:

- quote -

You say 'home' implying a house to live in, not a rental property. There
are guidelines for how much house one can afford, and 2-3 times one's
income is the range, depending a bit on down payment and interest rates.
Some would also say that the house isn't quite an investment, and
shouldn't be counted as an asset toward retirement (although, in the big
picture one can plan to trade down, and if you start with a house worth
3X income, once it's paid off, it may be worth 6X at retirement. A trade
down can give you 2-3X in cash, not chump change.)

The attempt to include it as a percent of one's net worth it a bit odd
to me. When starting out, one might buy a house and have little other
savings. Over time, the retirement accounts grow and the house is paid
down. At your brother's age, he should be approaching 10 times his
annual income as a net worth, if he'd retire at 62 with the goal of
replacing 80% of his income. If he's on track, I don't recommend he
takes half his savings to buy the house.
I hope that is close to an answer.
JOE

Pls help Asset Allocation Question

My brother is 51 years and his wife is 46 yrs old.

He is thinking of buying a home.

He is not sure of how much of his total wealth / net worth should be in

Stocks and Real estate

Someone told him that cash and bonds aside,
real estate and Stocks ( incl stock mutual funds) should be approx 50%
each

Since both stocks ( incl stock mutual funds) and real estate are more
volatile, he was told to split that portion of his net wealth.. 50%
each.

Pls let me know if this is generally speaking, approximately
correct...because I know it is difficult to be absolutely correct in
these things with so many variables.


Thanks
Ava