Christmas 2007

The holiday season is just around the corner with a few days left to go.

First of all, I wish to thank all the regular readers and to those who have left comments, contributing the on-going discussion of personal finance.

Second of all, I must apologise to the same regular readers for the lack for articles over the last 6 or so weeks. My life getting complicated and blogging must take a back seat for the time being. However, a couple of updates.

1. We have change over to a new car, purchased on a novated leased agreement. The procees from the sale  of our previous car went to paying off all of our credit card debts (~$12K). The remainder was put into an online high interest bearing account.
2. Reduce our credit card liability by cutting the credit limit on the cards to $1000.
   
3. One of the complications was things are not being done, so I am trying to embrace the GTD or similar philosophy . Shall let you know how I go.
4. Start to think about schooling for our son, so expenses for these are sure to mount up.

Third of all, if you are able to spend some time with your love ones, please do so as they are the things that money can't provide.

Merry Christmas!

How to calculate how much of the house you own?

The other day, I wrote an article on visualising how much of your house you own. I am currently trying to work this out. The simplest method is take price you paid for the house, minus the mortgage you took from the bank to help you buy the house.

% house own = ( house price - mortgage ) / house price

If I am going to do this correctly, it will tracked over a long period of time, probably in terms of years, so we need to factor two major affects into the calculations.

1. Appreciation of the house price
2. The movement of the interest rate on your mortgage.

The appreciation of the house price should be adjusted on a yearly basis. However, if the area of your house changes considerably, like it did in the inner suburbs of Melbourne about 5 years ago when it changed by 20% per year, the adjustment period may need to be smaller, like every 6 months.