Poll: Compare value of your residence to investment portfolio

[flyingaway]

26%. This is really bad, I wish I could reduce it to 13% before my full retirement. But that would be tough.

 

[Bestwifeever]

This poll is just for fun. It should make the San Franciscans and those with a big pension feel like they live in the Taj Mahal.

Step 1: Add the value of your investment portfolio to the equity you have in your main home. Do not include rentals, pensions, SS, additional homes, cars/boats/planes/RV's, annuities.

Step 2: Figure out the percentage of that total that your equity in your main home represents.

If you do not have a main home, or if you rent, there's an option for you, too.

I can do step 1. As a great man once said, numbers is hard. 1,234,921% is probably not right.

 

[COcheesehead]

10.5% That's with about a 40% increase in the value of the house since we bought it in 2012.

 

[samclem]

So--why buy insurance?

Looking at results so far, it looks like home value is less than 20% of the portfolio size for a majority/large plurality of participants. And, this poll likely overstates home value as a % of assets for most respondents here because:
-- Results include people early in their careers with little savings yet. Their home values will typically dwarf the size of their portfolios.
-- It doesn't include net present value of any pensions or SS
-- Many people may downsize their homes in later years.

So, maybe an average situation would be that a home represents less than 10% of the typical net worth of a retiree here.

So--I wonder if most of us plan to continue to buy homeowner's insurance? Insurance (in general) is for catastrophic losses that we would have trouble overcoming. It's a net "loser," but even so, we buy it because the potential impact of a loss would be devastating. Sure, we probably want coverage against being sued, but do we really need to pay for insurance coverage to replace our home due to fire, flood etc if that home could be replaced without undue impact to our quality of life? Many folks here are prepared to accept a drop in their portfolio values by 10%, and the chance of a house burning down is >miniscule< compared to the likelihood of a big market downturn. Maybe we just need renter's insurance to cover our stuff and to protect against lawsuits?

 

[Moemg]

close to 30% , No mortgage and house is waterfront were the values are soaring .If you add in my pension it drops to 20%. I bought this house in 2001 for a bargain and it has almost doubled in value .

 

[COcheesehead]

Looking at results so far, it looks like home value is less than 20% of the portfolio size for a majority/large plurality of participants. And, this poll likely overstates home value as a % of assets for most respondents here because:
-- Results include people early in their careers with little savings yet. Their home values will typically dwarf the size of their portfolios.
-- It doesn't include net present value of any pensions or SS
-- Many people may downsize their homes in later years.

So, maybe an average situation would be that a home represents less than 10% of the typical net worth of a retiree here.

So--I wonder if most of us plan to continue to buy homeowner's insurance? Insurance (in general) is for catastrophic losses that we would have trouble overcoming. It's a net "loser," but even so, we buy it because the potential impact of a loss would be devastating. Sure, we probably want coverage against being sued, but do we really need to pay for insurance coverage to replace our home due to fire, flood etc if that home could be replaced without undue impact to our quality of life? Many folks here are prepared to accept a drop in their portfolio values by 10%, and the chance of a house burning down is >miniscule< compared to the likelihood of a big market downturn. Maybe we just need renter's insurance to cover our stuff and to protect against lawsuits?

You insure against what you can't or DO NOT want to cover. For my $800 a year, I'll continue to buy it.

 

[CardsFan]

So--I wonder if most of us plan to continue to buy homeowner's insurance? Insurance (in general) is for catastrophic losses that we would have trouble overcoming. It's a net "loser," but even so, we buy it because the potential impact of a loss would be devastating. Sure, we probably want coverage against being sued, but do we really need to pay for insurance coverage to replace our home due to fire, flood etc if that home could be replaced without undue impact to our quality of life? Many folks here are prepared to accept a drop in their portfolio values by 10%, and the chance of a house burning down is >miniscule< compared to the likelihood of a big market downturn. Maybe we just need renter's insurance to cover our stuff and to protect against lawsuits?

Interesting point. We live in a condo, with building (studs out) insured by the HOC, so it is included in my fees. Therefore, our portion of remaining insurance costs is low ($600/year). I think I'll keep it.

Also, replacement cost can be a LOT more than current market value.

 

[emerytura]

In NJ, 38%, no mortgage, side by side duplex. We live in one half and collect rent from other half.


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[Helena]

.

Do you factor what you paid for your paid-off house... or what it is worth now ??

.

 

[Cobra9777]

Looking at results so far, it looks like home value is less than 20% of the portfolio size for a majority/large plurality of participants. And, this poll likely overstates home value as a % of assets for most respondents here because:
-- Results include people early in their careers with little savings yet. Their home values will typically dwarf the size of their portfolios.
-- It doesn't include net present value of any pensions or SS
-- Many people may downsize their homes in later years.

So, maybe an average situation would be that a home represents less than 10% of the typical net worth of a retiree here.

So--I wonder if most of us plan to continue to buy homeowner's insurance? Insurance (in general) is for catastrophic losses that we would have trouble overcoming. It's a net "loser," but even so, we buy it because the potential impact of a loss would be devastating. Sure, we probably want coverage against being sued, but do we really need to pay for insurance coverage to replace our home due to fire, flood etc if that home could be replaced without undue impact to our quality of life? Many folks here are prepared to accept a drop in their portfolio values by 10%, and the chance of a house burning down is >miniscule< compared to the likelihood of a big market downturn. Maybe we just need renter's insurance to cover our stuff and to protect against lawsuits?

Good point. I guess I never actually considered NOT carrying homeowner's insurance. In this part of Texas, hail damage is a fairly regular occurrence and tornado damage is not uncommon. This past Spring alone, I had roof claims on both rental houses, one of which had just been replaced less than a year earlier. Our main house had the roof replaced due to hail damage in 2012 at a total cost of $70K, with me paying only the deductible. The main house is quite large with a metal shingle roof, plus two smaller detached buildings with same roof material. Two years ago, we had a water leak claim that totaled $26K. We also have a pool which creates potential liability issues.

So it's not just for catastrophic loss of the entire house, which I agree would be a rare occurrence. For me, it's for catastrophic, PLUS a combination of hail/tornado risk in this area, pool liability, and all the intermediate size claims that add up over the years. Also, not sure about this, but I believe our umbrella insurance requires a certain level of home and auto coverage. Lastly, I'm currently in the 20% club. So until we downsize, a catastrophic loss would leave an awfully big dent. The premium is only 0.35% of replacement cost, so I see this as reasonable value.

 

[UpAnchor]

9.6% after a fresh 15yr refi. Equity is slightly over half of current market value so, as we're not far away from entering the decumulation phase, I only expect this percentage to grow. Unless investment assets end up chasing one of those upper lines in Firecalc.

 

[Nemo2]

.

Do you factor what you paid for your paid-off house... or what it is worth now ??

.

Yes.

 

[Koogie]

9.016% here......those rolled up newspapers in the middle of the road are getting pricier.

Rolled up newspaper !! LUXURY !! We live in a culvert under the road...

(Which is 15% of our total and we have no mortgage or liens on the culvert..)

 

[emerytura]

Helen, I use the number that we paid for the house. 10 years ago. Today we can sell for more, but we do not know how the future market will be.


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[Teacher Terry]

I used what my home is worth now.

 

[samclem]

So it's not just for catastrophic loss of the entire house, which I agree would be a rare occurrence. For me, it's for catastrophic, PLUS a combination of hail/tornado risk in this area . . . and all the intermediate size claims that add up over the years.

But surely that is all included in the price you re being charged for the policy, and the insurance company is charging enough above that to make a profit. Unless we know more than the insurance companies about our particular risk, then we must admit we are paying more to them then they are likely to pay to us.

Also, not sure about this, but I believe our umbrella insurance requires a certain level of home and auto coverage.

Probably so. But can't a renter get umbrella coverage?

 

[W2R]

.

Do you factor what you paid for your paid-off house... or what it is worth now ??

.

I was thinking of your best estimate of the equity you have in your house today. Sort of like the poll was a snapshot in time - - also with your portfolio value as it is today.

But really, it doesn't matter! It's not a scientific poll, so we can have fun with it.

 

[Dash man]

About 8%, not counting pension, rental or second home. No debt.


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[jazz4cash]

Looking at results so far, it looks like home value is less than 20% of the portfolio size for a majority/large plurality of participants. And, this poll likely overstates home value as a % of assets for most respondents here because:
-- Results include people early in their careers with little savings yet. Their home values will typically dwarf the size of their portfolios.
-- It doesn't include net present value of any pensions or SS
-- Many people may downsize their homes in later years.

So, maybe an average situation would be that a home represents less than 10% of the typical net worth of a retiree here.

So--I wonder if most of us plan to continue to buy homeowner's insurance? Insurance (in general) is for catastrophic losses that we would have trouble overcoming. It's a net "loser," but even so, we buy it because the potential impact of a loss would be devastating. Sure, we probably want coverage against being sued, but do we really need to pay for insurance coverage to replace our home due to fire, flood etc if that home could be replaced without undue impact to our quality of life? Many folks here are prepared to accept a drop in their portfolio values by 10%, and the chance of a house burning down is >miniscule< compared to the likelihood of a big market downturn. Maybe we just need renter's insurance to cover our stuff and to protect against lawsuits?

I have a very bad habit of voting before I read the instructions so maybe I missed something....I only used the EQUITY I have in the home so value does not come into play. I don't think the mortgage company would let me drop coverage. Your point may be valid for those without a mortgage, but home insurance is cheap for me, especially after a 50% premium reduction when I left State Farm. High COL area, too. It is a fun poll and I am surprised to see my results are in the largest band

 

[Dawg52]

8%. As far as insurance is concerned, I wouldn't feel comfortable self insuring all of it. But I do have a higher deductible than some people I know. I have high deductible on health insurance as well.

 

[txtig]

About 9% with no mortgage. But, since you're not counting pensions (which I don't have) in the calculation, I would have a vastly different number (probably 18%) if I had not made the decision to take a lump sum payout in lieu of a pension. So, omitting present value of pensions distort the results, in my opinion.


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[ProspectiveBum]

I have a very bad habit of voting before I read the instructions so maybe I missed something....I only used the EQUITY I have in the home so value does not come into play.

Isn't your equity the current value of the house, minus your mortgage balance?

I'm one of those Californians with a high percentage of my NW tied up in the family home: 39.7%. I'll be glad when that number drops, since it'll mean that our investment balances are growing!

 

[rodi]

I didn't use the value we paid - I used my best estimation of what it's worth based on 2 sales on my street within the past 2 years of similar size/models. One was fixed up/updated more than ours is.... the other was pretty original to the 1963 "new" state... So the new owners had to update it. I averaged the prices.

Zillow was useless for me because our house is now a multifamily since we added our granny flat detached cottage... And zillow includes that. Instructions indicated not including rental properties.

Looking at results so far, it looks like home value is less than 20% of the portfolio size for a majority/large plurality of participants. And, this poll likely overstates home value as a % of assets for most respondents here because:
-- Results include people early in their careers with little savings yet. Their home values will typically dwarf the size of their portfolios.
-- It doesn't include net present value of any pensions or SS
-- Many people may downsize their homes in later years.

So, maybe an average situation would be that a home represents less than 10% of the typical net worth of a retiree here.

So--I wonder if most of us plan to continue to buy homeowner's insurance? Insurance (in general) is for catastrophic losses that we would have trouble overcoming. It's a net "loser," but even so, we buy it because the potential impact of a loss would be devastating. Sure, we probably want coverage against being sued, but do we really need to pay for insurance coverage to replace our home due to fire, flood etc if that home could be replaced without undue impact to our quality of life? Many folks here are prepared to accept a drop in their portfolio values by 10%, and the chance of a house burning down is >miniscule< compared to the likelihood of a big market downturn. Maybe we just need renter's insurance to cover our stuff and to protect against lawsuits?

samclem - I think the poll was asking for home equity - not home value. So those youngsters with small portfolios and expensive houses - also have small equity, most likely.

 

[highlow65]

12%

 

[eta2020]

13% We live in extremely expensive area in extremely small house and we live here in a same small house for most of our working life.