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View Poll Results: How much of your net worth does your home represent?
Less than 5%. 16 5.48%
Equal to or more than 5%, but less than 10%. 66 22.60%
Equal to or more than 10% but less than 20%. 104 35.62%
Equal to or more than 20% but less than 30%. 55 18.84%
Equal to or more than 30% but less than 40% 18 6.16%
Equal to or more than 40% but less than 50%. 9 3.08%
Equal to or more than 50%. 6 2.05%
"Other" - - I don't have a main home, I rent, or I just need an "other" category for whatever reasons. 18 6.16%
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Old 11-07-2014, 05:06 PM   #61
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So here it goes:

My lovely 1100 sq ft house located in Boston's equivalent of Palo Alto area sitting on about 6000 sq ft lot is about 14% of our NW not counting future SS.
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Old 11-07-2014, 05:07 PM   #62
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Try monster.com on Boston Massachusetts. 100s and 100s of software jobs just like in Silicon Valley with not much salary/RSU difference.

You can look at glassdoor.com. RSUs and Stock options are here as well.
I've looked at those sites but never trusted them. Their salary data never seemed to match up with my own numbers (and numbers from friends). I think this is because using job title is way too coarse a filter. Ideally I'd want something like IEEE salary survey where they aggregate by education level and years of experience (e.g. Masters EE) but I don't believe they breakdown geographic regions finely enough to pull out "bay area" or Boston (I could be wrong about this -- I haven't looked at IEEE's data in a long time).
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Old 11-07-2014, 05:14 PM   #63
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A well-known corp whose name starts with a G wanted my brother back, and offered a stock grant worth $1/2M. I do not know about the salary, but my brother said "NO". There was no way he could afford a 4,000-sq.ft. McMansion like the one he lives in now. Heck, he couldn't even afford that $1.8M derelict shack.
My friends moved from a 4500 sf McMansion in Carmel Valley (pricey area in San Diego)... The wife is not super happy about the downsized home - but it's her husband's dream job.

My husband was offered a job with Disney, back when they were designing EuroDisney... They offered him 30% less than he was making in Philly - he'd have been based in CA. They didn't understand why he declined the offer because "everyone wants to work for Disney". LOL.
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Old 11-07-2014, 05:18 PM   #64
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For me, about 7%. That excludes SS, my frozen company pension, and small cash balance amount. I own my small co-op apartment outright.
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Old 11-07-2014, 05:31 PM   #65
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My home near Valley Forge is about 8% not counting SS.
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Old 11-07-2014, 05:36 PM   #66
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That place in Palo Alto sold for that much money because it will be leveled and a McMansion built on it. If I sold my house here the same thing would happen though my house is a bit nicer but small relatively speaking at 1900sf. The lot though is 13000sf and lots this size don't exist in very many places in the Bay so those that want one are willing to pay for it. Since I don't live in PA I won't get 1.8M for it though

To the original poll though, my house is not considered in any net worth calculations. It is paid for and the budget considers the PT and other expenses. But you have to live someplace so I would never consider it as part of my net worth. I would only consider it if I knew categorically that I would be selling in short order and what I would likely have after getting something else
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Old 11-07-2014, 05:50 PM   #67
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The OP's instruction is to include home value in NW calculation. However, same as many posters here, what I care about is the bottom line in my Quicken screen, and that has no home value in it.

The home expenses do appear in Quicken under the "Spending" tab though. How can they not? Aye, aye, aye... They certainly are a drain on net worth, at least for me. Utilities, taxes, insurance, and repairs... Aye, aye, aye...

I would have more money to count if I convert them to cold cash. It would also lower my WR, if I live and travel in the motorhome.
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Old 11-07-2014, 05:56 PM   #68
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Originally Posted by NW-Bound View Post
The OP's instruction is to include home value in NW calculation. However, same as many posters here, what I care about is the bottom line in my Quicken screen, and that has no home value in it.

The home expenses do appear in Quicken under the "Spending" tab though. How can they not? Aye, aye, aye... They certainly are a drain on net worth, at least for me. Utilities, taxes, insurance, and repairs... Aye, aye, aye...

I would have more money to count if I convert them to cold cash. It would also lower my WR, if I live and travel in the motorhome.
+1

Yes home is really expense but it is one expense I am willing to make without saving money.

Once we retire we will sell our house in expensive area whose purpose is focus on career and making money and...........we will buy property in area with focus on quality of life.

Neither Boston nor Silicon Valley has focus on quality of life IMO.
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Old 11-07-2014, 06:05 PM   #69
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Ah, but quality of life is so subjective. My nephew, a pharmacist, went to work in Manhattan because he wanted to experience life there. Then, he said he would want to spend a few years in SF next.

I am glad that my definition of quality of life requires less money than what others need.
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How much of your net worth does your home represent?
Old 11-07-2014, 06:14 PM   #70
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How much of your net worth does your home represent?

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It's possible to get a nicer house for 1.8M in Palo Alto. I have good friends that recently did. They were able to buy an Eichler house (mid century modern) in Palo Alto for 1.8. Fortunately, they're used to living small - it's only 1600sf... but the layout works for them.

Their rental they lived in prior to purchase sounds more like the hoarder house - small rooms, not a lot of light, etc.. But the rent was still super pricey.

His google salary doesn't go as far as his qualcomm salary did when you look at home values.
Sometimes I wonder who can afford to buy all these houses. We have a very nice income but I feel like a $1.8M house is WAY out of our league.
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Old 11-07-2014, 06:38 PM   #71
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That's cheap. Article in the local paper a week or so ago highlighted a 900 sq ft house in Palo Alto that sold for $3M :face palm:. It's all about location, location, location and I'm still kicking myself for not buying the tiny house in Cupertino 17 years ago, although we did pretty well.

We're at 23% not counting SS. Recently got approved for a HELOC and I had to pick myself up off the floor when I saw the appraisal valuation.
I actually was looking for the $3M house article link but I stumbled across this one instead and this one was actually funnier. Well, it is funny until we go out house hunting anyway. Then it gets kind of depressing even though we have a house to sell. The smaller houses seem to be in high demand and sell for more per square foot, so downsizing may not make any financial sense, even in the areas where us lesser mortals reside, miles from Palo Alto.

The $3M house was sold by a musician who never made more than $30K a year in his life. I think he bought a retirement home in Guerneville, so I imagine he had quite a bit left over to invest.
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Old 11-07-2014, 06:45 PM   #72
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What are taxes on these Cali homes?
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Old 11-07-2014, 06:49 PM   #73
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What are taxes on these Cali homes?
Depends when you bought it.... taxes are based on the sale price and then Prop 13 only allows a 1.5% increase (I think) per year. That has allowed many of my neighbours who are retired to stay in houses that would list at $1.5-2M. OTOH those people who just bought a 1.5M house, tore it down to put up their own personal touch (and it happens all the time) are going to be hit with a rather large PT bill every year
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Old 11-07-2014, 07:55 PM   #74
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Proposition 13 means that as a newcomer to the state, you will be paying 20X or more of what your neighbor is paying because he's a long-time resident.

In actual dollar amounts, you can expect to pay around 1.1-1.2% of the sales price each year. This means close to $20K/year for the lovely $1.8M tear-down home mentioned in a previous post.

Just go on Zillow, look around and you can find homes offered on the market at $3M+, yet the current owner is paying less than $2K/year.

And by the way, the above tax rate is roughly the same in Southern CA too.

Prop 13 means that if someone pays less, then somebody else has to pay more. I would not want to be that somebody else.
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Old 11-07-2014, 10:43 PM   #75
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Housing is cheap in Tulsa. Our house is right at 5%
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Old 11-08-2014, 04:04 AM   #76
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Our 2000sf home on 1 acre of land in Boston's metrowest area is 15% of our net worth not accounting for SS.


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Old 11-08-2014, 06:18 AM   #77
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I'm a renter, but if I would buy the place I'm in right now that would cost me about $300k - $400k. Puts me in the 35% - 45% range.

One of the main reasons I'm here though is because there is plenty of income opportunity (semi-FIRE atm). No way I would stay here if perma-FIRE. If I would perma-FIRE, housing would drop to $200k - $300k. Still 25% - 35%.

Still quite high, but that's what happens as a single guy with no children and modest spending habits I guess ..
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Old 11-08-2014, 06:35 AM   #78
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I'm in the 20-30% range but valuations are out of this world around me. A row house down the block (newly refurbished) just went for $1.7M. DW and I plan to age in place so it will never matter to us but the kids should profit nicely.
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Old 11-08-2014, 12:59 PM   #79
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Proposition 13 means that as a newcomer to the state, you will be paying 20X or more of what your neighbor is paying because he's a long-time resident.

In actual dollar amounts, you can expect to pay around 1.1-1.2% of the sales price each year. This means close to $20K/year for the lovely $1.8M tear-down home mentioned in a previous post.

Just go on Zillow, look around and you can find homes offered on the market at $3M+, yet the current owner is paying less than $2K/year.

And by the way, the above tax rate is roughly the same in Southern CA too.

Prop 13 means that if someone pays less, then somebody else has to pay more. I would not want to be that somebody else.
Paying 20X more than your neighbor is not particularly accurate. Prop 13, passed around 1978, set a base value on 1976 assessment (I can't remember exactly, somewhere around that time). Then the increase is capped at 2% per year. All other base values are on the purchase price (or renovation). So if someone bought a house 10 years ago for $1M and a new person just bought the house next door for $1.5M, their base values will be $1.22M (10 years at 2% per year increase) vs. $1.5M. Hardly a 20 to 1 difference.

Some of my friends parents bought their houses in the 50s and 60s and their property taxes are quite low. However, this is the exception and not the rule. The number of housing units in 40+ year old neighborhoods are becoming a smaller and smaller percentage of overall housing and there has been a lot of turnover.
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Old 11-08-2014, 01:19 PM   #80
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A $4M house in a flood zone? I dunno.
While legally a Flood Zone, that is severely overstated. I worked in Palo Alto for 25 years and many of my co-workers lived there. I remember one winter many years ago (can't remember which year) we had torrential rains and one of the creeks flooded. One person I know had to put out a few sand bags across the front of their house maybe one or two sand bags high. The water recessed quickly, no damage at all and a very rare occurrence.
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