View Poll Results: Primary residence(s) as a % of net worth (without primary residences)
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Less than 5%
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22 |
7.51% |
6-10%
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87 |
29.69% |
11-15%
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59 |
20.14% |
16-20%
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42 |
14.33% |
21-30%
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51 |
17.41% |
31-40%
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16 |
5.46% |
More than 40%
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16 |
5.46% |
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04-03-2018, 09:35 AM
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#61
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
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Quote:
Originally Posted by Midpack
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.
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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.
__________________
For the fun of it...Keith
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04-03-2018, 09:44 AM
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#62
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Recycles dryer sheets
Join Date: May 2017
Posts: 79
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We just retired in a High cost of living area and we are at about 25%.
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04-03-2018, 09:58 AM
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#63
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Thinks s/he gets paid by the post
Join Date: Sep 2016
Location: Acworth
Posts: 1,214
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Quote:
Originally Posted by Midpack
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.
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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).
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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04-03-2018, 11:53 AM
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#64
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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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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04-03-2018, 12:02 PM
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#65
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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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.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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04-03-2018, 12:33 PM
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#66
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2016
Posts: 8,968
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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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04-03-2018, 12:36 PM
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#67
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 7,677
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Quote:
Originally Posted by NW-Bound
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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If I had $10m, I would probably get both.
Example of home
__________________
For the fun of it...Keith
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04-03-2018, 01:17 PM
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#68
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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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
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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04-03-2018, 01:25 PM
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#69
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,586
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Quote:
Originally Posted by NW-Bound
Hey, the forum software messed up, and labeled my post as written by Midpack!
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Which post?
Edit - is it "if I had $10M"?
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04-03-2018, 01:39 PM
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#70
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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It is as quoted by Kcowan in post #67.
Perhaps Kcowan did some edit, and caused the mislabeling.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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04-03-2018, 01:42 PM
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#71
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,586
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Quote:
Originally Posted by NW-Bound
It is as quoted by Kcowan in post #67.
Perhaps Kcowan did some edit, and caused the mislabeling.
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Got it, thanks. I did an edit to fix - no harm done.
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04-03-2018, 02:42 PM
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#72
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,205
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Quote:
Originally Posted by copyright1997reloaded
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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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.”
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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04-03-2018, 02:44 PM
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#73
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,205
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Quote:
Originally Posted by exnavynuke
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).
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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.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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04-03-2018, 02:46 PM
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#74
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Recycles dryer sheets
Join Date: Mar 2013
Posts: 285
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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.
__________________
How can you tell when a cat is retired?
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04-03-2018, 03:59 PM
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#75
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by kcowan
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That home would be around $500-600K here. Location, location, location.
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04-03-2018, 04:17 PM
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#76
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Location: Upstate
Posts: 2,948
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Quote:
Originally Posted by Midpack
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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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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04-03-2018, 04:49 PM
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#77
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Full time employment: Posting here.
Join Date: Aug 2013
Location: https://www.google.com
Posts: 750
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Quote:
Originally Posted by NW-Bound
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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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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04-03-2018, 05:23 PM
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#78
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Posts: 12,598
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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.
Quote:
Originally Posted by copyright1997reloaded
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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__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Even a blind clock finds an acorn twice a day.
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04-03-2018, 06:03 PM
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#80
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Thinks s/he gets paid by the post
Join Date: Dec 2014
Location: St. Charles
Posts: 3,903
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Quote:
Originally Posted by Midpack
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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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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If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
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