Weekend Reading: 75% of Your Net Worth Should Be Invested
Here is some weekend reading that has peaked my interest:
- 75% of Your Net Worth Should Be Invested - I really like this article that says no more than 20% of your net worth should be tied up in your house and no more than 5% in other stuff. That leaves 75% invested in investments. Maybe these are the rule of thumb measurements I have been looking for on how much we should spend on a house. I am thinking the house equity should be 10-20% of your net worth (less is better in the long run), but given housing prices these days I think the lower end of that range is harder and harder to reach. So for us with a $2million financial freedom goal we should would consider ultimately spending between $200k-$400k on our home.
- Wachovia Capital Infusion - As we have been loading up on Wachovia over the past couple months, this is timely news for our investments. Wachovia has cut the dividend to raise cash, and added a $6B capital infusion to improve it capital ratios. In my opinion the company is now in better shape to ride out the rest of the housing crisis.
- RMB vs US Dollar - Sun has posted a graph of the RMB to the USD - highlighting what my wife and I have been previously seeing with the RMB exchange rate while we are on our assignment in China.
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