Wednesday, September 23, 2009

are you overweight real estate?

Thicken My Wallet posted an interesting piece today on asset allocation. I contributed to his article and he used my concept of tracking the ratio house value / total assets.

You can find the article here.


Sampson said...

Hey MG,

I posted over on TMW's site but thought I get your take on it too. Did you guys come up with a consensus of how much is too much?

I know 80-90% house/total assets was mentioned, but the post wasn't too # intensive. I'm guessing the mean and median in Canada is actually quite (i.e. principle residence is the most valuable asset people have).

MG (moneygardener) said...

We didn't decide on a concrete limit.

I think it depends on your life situation. If you are in your twenties just starting out, you are excused.

If you are over 30 years old it is my belief that a percentage over 80% means that you are set up poorly for future asset growth. You will have to make a concerted effort to buy non real estate assets to diversify away from RE and better position yourself for asset growth as the years go on.