@soccerluvof4 - Downsizing "sounds" ideal, but where we live downsizing still has a hefty price tag. Plus, we're not as urgent on the FIRE train as most. I already have a very FIRE style life having created my own company with total flexibility (hiked in Peru for 3 weeks this past May and hiking the JMT this August for 20 days), unlimited vacation, work remote (we lived in France for a month this past summer all together), etc. so staying close to where we are, in the school we're in (for our daughter) is best for us and our happiness. It's all about happiness level. So, downsizing in the area we want to be means still spenind at least $1M on a home as something priced at $850k will bid up to $1M so we'd be looking at that price range and, trust me, what you get for that is a MAJOR downsize from what we have now. So much so that it shifts the happiness meter way too far on the negative side.
@Tuskalusa - I have a Google sheet I'd be happy to share with you where you can change the ratios of investment in Index funds vs house, refinance, etc and it recalibrates the 4% ratio in 10 years. I currently have it set year by year for 10 years.
Using "borrowed" money shows the best result when investing in anything as the compounding grows SO much faster when the pool is larger at the start. I really don't have any issue with borrowing money from myself (in this case from our home). What would be your concern/reservation?
For us it comes down to not being so leveraged in our home for our retirement and spreading that out. I didn't use to think that way, but the numbers, even conservative planning, feels like it works well. Of course I can't predict a downturn in the economy, etc, so I just use smaller return % to account for the ups and downs in the market.
Yes the interest only payment works great for us too so that we keep more, invest it, but having more up front to invest shoots the growth curve up much more.
With all that being said, the market is volatile right now so we currently plan to refinance shortly (next 30 days), pull out the $200/225k, put that into CIT Bank at 2% interest (that's what we're currently getting), and riding the cycle a bit. With all the speculation with the market, even within the FIRE community, I think it makes sense for us to ride it out a bit before we throw down that money into the Index.
Edit/Add: We'll most likely dollar cost average over 6 months until the full amount is in. This will allow us to hedge our bets a bit without waiting TOO long to just get going.
These are my current thoughts. Open to other ideas, too.