6 Year Plan for 20% of Networth in Home Equity

Even though it seems impossible, my goal is to keep my family networth with 20% of total AFTER TAX networth in home equity. This means I need to carefully stick to contributions and growth in my other funds (after tax values) to hit my savings goals (my goal is $5M of after tax networth by 50.) This assumes an increase of 5% in home value per year for next 6 years. This does not make any assumptions for stock gains, it just notes how much I would need to have in each bucket to keep the target asset allocation.

The first chart before is of my after tax goals for the next 6 years. Below this chart are my current actuals (and gaps that need to be fixed by end of 2020.)

The below notes that in order to be on track for 2021, I need the following adjustments/additions:

  • $35k more saved (allocated based on goals)
  • US bond fund and developed market fund need more investment

*note, this does not include emergency fund cash or expenses

1 2 3 4 5 6
37 38 39 40 41 42
2021 2022 2023 2024 2025 2026
Target Post Tax
Home Equity 20% $254,160 $303,036 $355,356 $411,292 $471,024 $534,743
Company Stock 10% $127,080 $151,518 $177,678 $205,646 $235,512 $267,372
Large Cap US 29% $368,532 $439,402 $515,266 $596,373 $682,985 $775,378
Small Cap US 4% $50,832 $60,607 $71,071 $82,258 $94,205 $106,949
Developed 24% $304,992 $363,643 $426,427 $493,550 $565,229 $641,692
Emerging 4% $50,832 $60,607 $71,071 $82,258 $94,205 $106,949
Bond US 6% $76,248 $90,911 $106,607 $123,387 $141,307 $160,423
Bond Int 3% $38,124 $45,455 $53,303 $61,694 $70,654 $80,212
$1,270,800 $1,515,180 $1,776,779 $2,056,458 $2,355,121 $2,673,717
Actual Post Tax
TARGET GAP TARGET V DIFF
Home Equity 20.00% $254,160 20% 0% $254,160 $0
Company Stock 12.35% $156,887 10% -2% $127,080 $29,807
Large Cap US 29.02% $368,845 29% 0% $368,532 $313
Small Cap US 4.30% $54,601 4% 0% $50,832 $3,769
Developed 21.48% $272,924 24% 3% $304,992 -$32,068
Emerging 4.96% $63,003 4% -1% $50,832 $12,171
Bond US 0.87% $11,074 6% 5% $76,248 -$65,174
Bond Int 4.22% $53,665 3% -1% $38,124 $15,541
Missing 2.80% $35,641 0 -2.80% $35,641
$1,270,800
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2 thoughts on “6 Year Plan for 20% of Networth in Home Equity”

  1. 5% CAGR in home value seems optimistic, especially at these high levels. My Peninsula house bought for $1.8M in 2018 just appraised for $1.85 a few months ago.

    I would target 3%.

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