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View Poll Results: Primary residence(s) as a % of net worth (without primary residences)
Less than 5% 22 7.51%
6-10% 87 29.69%
11-15% 59 20.14%
16-20% 42 14.33%
21-30% 51 17.41%
31-40% 16 5.46%
More than 40% 16 5.46%
Voters: 293. You may not vote on this poll

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Old 04-03-2018, 09:35 AM   #61
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Originally Posted by Midpack View Post
And I know polls here always have outliers, I don’t think I can remember one that floated through without some concerns expressed. I’ve come to expect that.
Yes I am an outlier because we rent for 5 months in one location. I am also Canadian so I am used to being an outlier on this forum.
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Old 04-03-2018, 09:44 AM   #62
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We just retired in a High cost of living area and we are at about 25%.
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Old 04-03-2018, 09:58 AM   #63
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Originally Posted by Midpack View Post
The home we’re considering would cost about $200K more than our current home, and that would come from our investments, reducing net worth as defined for this poll.

Thankfully the poll seems to be yielding the range of results I was expecting.

I’ve seen the debate on this forum many times, and it seems the consensus guidance here has been to not include their primary residence in net worth, at least when figuring out what you can spend in retirement - e.g. SWR. Even aside from homes, what makes up net worth for each of us can vary considerably. Those who have generous pensions and retirement health care could have a relatively lower net worth. That would have a PV/FV but I wasn’t sure everyone includes that in net worth. In any event, I was just trying to establish some basis for the poll, there are several legitimate approaches, none I know of that will work for every situation.

And I know polls here always have outliers, I don’t think I can remember one that floated through without some concerns expressed. I’ve come to expect that.
Net worth has a definition, and it includes home equity. The preference to not use net worth when talking about SWRs is because it is immaterial to the subject, since only those parts of your net worth that will provide income are applicable when calculating a SWR (and home equity is generally not an income source for most people).

For this poll, I could use my current values and get ~66%, not including pension. Or I could use the NPV of my pension and drop that number to about 25%. Or I could use my projected retirement balance without pension and get around 22%. Or I could use my projected retirement balance with pension NPV and get an even lower number.. so I don't know what to vote here. Oh, and then there's the value of my free healthcare for life to take into consideration...I think I'll just skip voting.
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Old 04-03-2018, 11:53 AM   #64
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I answered 10%, but expect the % to rise if/when I move, sell my current house and buy another (likely smaller house). Why? Because the areas I am looking at seem to be more expensive than where I currently live.

I'm always amused by the "how much house" or "how much car" can one afford. That question makes sense (particularly the house one where its expected value should go up over time around the rate of inflation) for those who are house limited by income, but doesn't make sense (to me) once one reaches a certain wealth point. I could sell a bunch of assets and buy a considerably more expensive house, but for what purpose? More to take of? Bragging rights? Living around snobby people? No thanks.
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Old 04-03-2018, 12:02 PM   #65
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... But if it were $10M, I would have no hesitation buying a $3M house on the waterfront on Bainbridge Island.
We're in the former, and only live in a 1240 sq ft 1950's home - plenty for DW and I. I often think we need to put more NW into our primary, but it's hard to even think about putting 30% of our NW into a home. I suppose it's just that ol LBYM habit, and the fact that that sized house would also include much more in the way of expenses. I'd rather have it in the portfolio.
I do not want a mansion, but my pipe-dream location is expensive. And on a waterfront lot, it is rare to see something less than 3,000 sq.ft.

PS. If I had $10M, I would more likely buy a $3M home than a $150K car. It's all about priority.
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Old 04-03-2018, 12:33 PM   #66
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For me a house has to "grab me" somehow, I have to have some emotion from it. It has to make me feel good.

And it always costs more than you want to spend yes?

And by all means, it should make you happier than where you are now or why bother?
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Old 04-03-2018, 12:36 PM   #67
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If I had $10M, I would more likely buy a $3M home than a $150K car. It's all about priority.
If I had $10m, I would probably get both.

Example of home
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Old 04-03-2018, 01:17 PM   #68
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Hey, the forum software messed up, and labeled my post as written by Midpack!

Anyway, the Vancouver $6M home makes the Bainbridge waterfront homes look like a steal.

Here's one on the market now for a mere $2.4M, with a nice view of the Seattle skyline. No-bank waterfront. Perfect for me to go crabbing, and my wife to watch me from the deck.

https://www.redfin.com/WA/Bainbridge...0/home/2140711
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Old 04-03-2018, 01:25 PM   #69
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Hey, the forum software messed up, and labeled my post as written by Midpack!
Which post?

Edit - is it "if I had $10M"?
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Old 04-03-2018, 01:39 PM   #70
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It is as quoted by Kcowan in post #67.

Perhaps Kcowan did some edit, and caused the mislabeling.
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Old 04-03-2018, 01:42 PM   #71
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It is as quoted by Kcowan in post #67.

Perhaps Kcowan did some edit, and caused the mislabeling.
Got it, thanks. I did an edit to fix - no harm done.
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Old 04-03-2018, 02:42 PM   #72
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I'm always amused by the "how much house" or "how much car" can one afford. That question makes sense (particularly the house one where its expected value should go up over time around the rate of inflation) for those who are house limited by income, but doesn't make sense (to me) once one reaches a certain wealth point. I could sell a bunch of assets and buy a considerably more expensive house, but for what purpose? More to take of? Bragging rights? Living around snobby people? No thanks.
We simply want to move south for better weather, and a change in scenery, and it’s going to cost significantly more. After a life of LBYM, it takes a little thought for me to essentially increase our fixed costs. We’re not looking to test our financial limits at all, nor for “bragging rights” or “living around snobby people.”
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Old 04-03-2018, 02:44 PM   #73
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Net worth has a definition, and it includes home equity. The preference to not use net worth when talking about SWRs is because it is immaterial to the subject, since only those parts of your net worth that will provide income are applicable when calculating a SWR (and home equity is generally not an income source for most people).
Hindsight is a wonderful thing. In retrospect I probably should have used your definition of net worth, I’m just used to thinking about net worth WRT supporting spending, which typically excludes home value. My mistake. Fortunately the poll results have served the intended purpose for me at least.
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Old 04-03-2018, 02:46 PM   #74
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Doing the computation as specified, ours is just under 19% with the current value of our house. It would be just over 13% using our actual purchase price almost five years ago when prices were still under the influence of the real estate crash (which is why we bought then). We would likely be reluctant to buy our house now at its current value.
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Old 04-03-2018, 03:59 PM   #75
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If I had $10m, I would probably get both.

Example of home
That home would be around $500-600K here. Location, location, location.
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Old 04-03-2018, 04:17 PM   #76
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We simply want to move south for better weather, and a change in scenery, and it’s going to cost significantly more. After a life of LBYM, it takes a little thought for me to essentially increase our fixed costs. We’re not looking to test our financial limits at all, nor for “bragging rights” or “living around snobby people.”
OP, I wasn't referring to you. I too will likely have a more expensive home if/when I move.

However, there are many people out there who do think they need to be in the "best" home and have the "best" car. They don't tend to be the same people as who post here because many here are advocates of LBYM, even after retirement.

Since people are posting houses, I'll contribute one from my recent random looking at areas around the country:https://www.zillow.com/homes/for_sal...ct/15_zm/1_rs/
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Old 04-03-2018, 04:49 PM   #77
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Originally Posted by NW-Bound View Post
I do not want a mansion, but my pipe-dream location is expensive. And on a waterfront lot, it is rare to see something less than 3,000 sq.ft.

PS. If I had $10M, I would more likely buy a $3M home than a $150K car. It's all about priority.
Agreed, and Bainbridge island is quite beautiful. I know the area from my grad school days at UDub. I would certainly put something like that above a fast car on my priority list.
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Old 04-03-2018, 05:23 PM   #78
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Evidently we are not at that "wealth point." I would love to have more to spend on a house, although grateful to have as much as I do. The house does not need to get bigger and bigger, but there is no upper limit on desirable locations/cost thereof.

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I
I'm always amused by the "how much house" or "how much car" can one afford. That question makes sense... for those who are house limited by income, but doesn't make sense (to me) once one reaches a certain wealth point. .
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Old 04-03-2018, 05:49 PM   #79
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Using the formula given we are at 13% total using current plausible values for our N&S homes. I keep looking, because I like real estate. Think it is funny that we have loans secured by this
https://www.zillow.com/savedhomes/fo..._zm/1_rs/1_fr/

and this

https://www.zillow.com/savedhomes/fo..._zm/1_rs/1_fr/

but our homes are quite modest in comparison. My dreams are something else though - bank turned down our offer on this great views home, then accepted $10k less a year later, just after we had bought our SoCal home:
https://www.zillow.com/savedhomes/fo..._zm/1_rs/1_fr/

More recently there was this wacky place trying to lure me - would have been a big stretch and it is very nutty, but a great location and not your normal tract home..
https://www.zillow.com/savedhomes/fo..._zm/1_rs/1_fr/
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Old 04-03-2018, 06:03 PM   #80
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Hindsight is a wonderful thing. In retrospect I probably should have used your definition of net worth, I’m just used to thinking about net worth WRT supporting spending, which typically excludes home value. My mistake. Fortunately the poll results have served the intended purpose for me at least.
I have a cousin the Bay Area. He is retiring soon. Good state pension, but I don't think he has a large retirement account (at least by the norms on this site). Using your original basis his home is probably approaching 200% of his invested net worth (not counting the PV of pension/SS.)

But, when he retires, moves out of state, and buys a new house for 1/2 the current one, that could flip to 60%.

Your original basis was not bad, it just accentuates the cases where the house value is really high relative to investments.
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