I'm sure this has been asked and answered 100x, but i just can't seem to wrap my head around the "proper" answer:
Do you include home equity in your progress numbers?
On the one hand, if you have home equity, but still have a mortgage payment, that home equity is more or less worthless, right? So, maybe i should take it out of my stash number, and then include the mortgage payment (in perpetuity) as part of my 4% SWR yearly requirement...
On the other hand, I could cash this out and put it in the market and count it towards my stash, but then i suppose my monthly payment would be higher...
On the third hand, I could count it because it makes me feel like i am making better progress (my home equity is like $180k right now - so not nothing)
On the last hand, I could plan to pay off my mortgage and not count it towards my stash, and just leave it out of the equation...
What is everyone doing?
When i examine the extremes, i think of things like, "Well, i could have a 1.2 million dollar house with 200k loan on it, and $1 million saved. If i completely disregard the house, I have a SWR of 40k a year. If I downsize the house, I could have a SWR of $80k ($1M house + $1M investments) - doubling my yearly income.
What is everyone else doing? Maybe it all depends on our goals for our houses, but i know there is a "right" answer in the math somewhere.