"Just 55% now believe that buying a home is the best investment most families can make. That’s down from 79% over the past eighteen months. Just 54% of homeowners believe their home is worth more than their mortgage. Earlier polling showed that 65% now think it will take the housing market at least three years to recover".Caveat: polling on housing has been a lagging indicator.
Thursday, January 14, 2010
Rasmussen Poll Today
Posted by Harriet at 8:57 AM
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54 comments:
Sounds like a contrarion indicator if I ever saw one.
Didn't we all say that once the US public stopped thinking about their homes as an investment and rather just as a house, we'd be on the road to recovery? The housing downturn has sunk in to the American psyche, sounds like a buy signal to me. (or that it's really near)
As expected, and pointed out here (vis a vis expensive neighborhoods), people who earn higher annual incomes have much better equity positions in their homes.
59% percent believe their home value exceeds their mortgage debt. Did this survey include the 40% with no mortgage debt?
Va-
I would doubt the survey included people with no mortgages, because I think people tend to be optimistic about there home value so I would be amazed if only 19% of people had mortgages and thought there house was worth more than the mortgage.
I am amazed that 35% of people think that the housing market will have fully recovered in 3 years. I guess they are still expecting double digit returns every year...
housebuyer,
You're assuming that "recover" was defined to mean re-attain previous peaks, rather than simply stabilize and start appreciating again. It could have been either definition, or it could have been left open to the respondent.
Recover, to me, means stop falling.
(or at least, I can't find where it tells you what the exact questions were).
"
1* How long will it take for housing prices to fully recover from the recent downturn?
2% One year
17% Two years
20% Three years
45% More than three years
15% Not sure
NOTE: Margin of Sampling Error, +/- 3 percentage points with a 95% level of confidence
"
My apologies, the link was at the bottom of the page. In people's defense, I think a lot of people were not aware of exactly how bad prices had gotten at the peak. And, a lot of people will just read "recover" and re-interpret the question themselves to some sensible meaning. Although 45%answering "more than three years", when that was the "worst" case time frame given, is pretty realistic.
cara says
"Sounds like a contrarion indicator if I ever saw one."
No a contrarian indicator is
Time doinga Cover story
"American Nightmare: How buying a home isnt' the path to success but the road to ruin".
a Contrarian indicator is Leroy or Robert saying "The worst thing you can do is buy a house in the DC Area".
Sorry..posting here again from the other bit as a response.
CRT, HB,
I respect your experience & what you felt at the time. With due respect, I don't see much different reaction from anyone working at a financial institutions - after all it was a fight for their survival.
Let me be clear. I am not saying there should have been no steps taken to save the systematic failure.
They had to backstop lending institutions to some extent. Increase in FDIC limit was not a bad idea either.
There was no need to backstop hedge funds. There was no need to get TA on fed balance sheets at tax payer's expense. Backstopping pure lending operations (not casino ones) and changing MTM should have allowed the banks to carry those assets. There would have been a period where lending would have stagnated or gotten expensive. It would have healed in due time.
People go to casino and lose millions. Hedge funds should have been allowed to fail. Debt/Stocks of every single risk-taking institutions should have been allowed to be completely wiped out. I am sure you have seen the news on how GS got paid 100 cents on the dollar during AIG bailout. Does this sound like right thing to do in your opinion?
My point is - as a society we have become bunch of crying babies. There is no concept of failure anymore.
- I paid too much for my house...please forgive my principal.
- I signed contract with interest rate that I can't afford. Please adjust my mortgage.
- We made too many cars & pay our employees too much. Please pass CFC & give us few billons that we know we can't return.
- We paid millions in bonuses & took risks we never should have. But, now please save us or this will kill the employment.
Moral hazard is the biggest risk we are facing now. We lost that opportunities to clean the wall street, which was needed. Now, they won't let any meaningful regulation pass anymore. Now we wait for another disaster.
I can go on....let me say - I respect your opinions - I don't agree however.
pat,
Leroy? Really? You put him in the bull camp?
Contrarion doesn't mean contrary to what the extremes are saying, it means contrary to the common wisdom.
Though I agree on the Time magazine thing
TIme in the boom,
Except that...
Time in 2007
you might want to pick a different magazine, because while Time may have been later than Leroy to call a burst, that it was warning of the possibility in 2007, sounds to me like they were pretty on top of it.
Lots of mainstream media outlets are warning of further doom to come, just read Diane Olick from CNBC. You'd think the world was ending all over again.
Homeownership more nightmare than dream
Sure it's not on the cover yet. But that's a pretty high standard.
In response to the Time article at the link:
Actually, people SHOULD think of homes as investments, as well as places to live. Investments (e.g., the stock market) can go up or down, and different investments are associated varying degrees of risk and varying degrees of ease of getting rid of them, among other things. The problem is with those who view homes as an investment that can only go up.
Ace,
that's too rational. :)
I think most people equate all "investments" with things that "can only go up". Or rather, that will go up for them, because they "invested" in it. I.e. they apply the more fluid everyday English sense of the word to the business sense as well.
Interesting, just as everything looks like a nail when you're a hammer, everything looks like a buy signal when you are a homeowner.
Earth to shamrock,
I'm the one who posted the non-prime delinquency graph for the US in the previous bucket.
And pointed out the new potential source of supply from quicker short sales.
Do those sound like buy signals to you?
Cara,
I think they do too. But I think the major culprit here is, specifically with respect to real estate, that many in the real estate industry and the media have for years promoted home ownership as a very safe investment, one that almost never declines.
But I wish I had a net positive return for every relationship or every work project I ever "invested" in!
Spider-
Hedge funds were not bailed out directly. I guess you can say the fact the government didn't let the economy collapse sending stock and bonds prices to zero bailed them out... Also tons of hedge funds failed in 2008-2009. In fact 2008 was the worst year for hedge funds both in terms of the number of closures and in terms of returns.
Goldman owned enough CDS on AIG that even if it failed they would have done fine. Unless all of the counter parties also failed. They were one of the strongest banks and as I said before they would have out lasted all of their peers. For sake of argument lets say that Goldman would have failed if it didn't get the AIG money. That was what ~10 Billion. The government has already made more in taxes from Goldman and its employees. So I agree that the government might have been saving Goldman, but is that a bad idea if it is in fact just trying to optimize its own profits.
I completely agree with you that people are not on the hook for their bad decisions. This includes both individuals and companies... I just think that the government needs to figure out a better way to handle future problems. You need better exit strategies in advance, that just letting massive companies fail and hoping for the best is not how things should be handled.
housebuyer: "Goldman owned enough CDS on AIG that even if it failed they would have done fine."
Yeah, that's what they keep saying. I guess that's what I would say, too, to justify the sweetheart insider deal I received. Last I heard, Goldman was refusing to identify where they held the CDSs against AIG's demise. Is that still true? Why wouldn't they want us to know? Perhaps the answer is found in your statement, "[u]nless all of the counter parties also failed." Exactly. The counterparties were probably with someone even worse than AIG (e.g., AIG was insuring anything that moved and yet some company was willing to issue a CDS against them?). C'mon, c'mon.
I think a collective feeling that homeownership is a bad idea--or at the very least not a decision made because it has a financial pot of gold at the end of its rainbow--s a solid indicator that the true bottom of housing is in.
I'm loathe to call it based on one survey, particularly when that survey still indicates that a majority (though small at 55%) still see the house as a path to riches. "The best investment a family can make".
I think Harriet hit the nail on the head here, this will also likely be a lagging indicator. I'm OK with that. I'd rather buy shortly after a known bottom than try to time the bottom, if I had my druthers. With housing, we rarely do. Timing of buying a house is dependent on so many other factors.
nah, people who have good incomes always want to buy a home asap, especially couples.
i would say it may be not such a bad idea for myself to become an homeowner --- even if i'll be underwater this will be less discussed than the idea that you need to buy a place. that's irrational, but it is true.
If you think unemployment would have been higher if we didn't do TARP...here is what I think:
When an industry is bloated, it needs to be allowed to be shrunk. You don't waste money to prop that sector up. You invest money in other sectors to balance the employment (financial vs. clean energy, as an example). It would have been a smart idea to invest hundreds of billions in clean energy or infrastructure to create jobs that they wasted instead to buy TA (crap).
This would have been a much better answer to solve the employment puzzle in case they let financial institutions fail. Now, it is too late, we are almost out of money and probably bankrupt.
Financial sector is still way too bloated & too much brainpower is being wasted there.
For those in the "L-shape" camp, how long do you think the market would stay flat for? Maybe I'm not understanding the numbers right, but at 5.25%, the Amortization Schedule says it takes 48 months to pay off 6% of the mortgage balance. So if the market stays flat for five or more years, I'd be in a worse shape then today if I try to sell and move up, because the 6% selling commission and other selling costs. If I wanted to have 10% 'after selling cost' equity, in a flat market, it'd take over 9 years to get there. But even with that 10%, I'm not sure it's enough to move up a ladder in the SFH market.
So, my concern is, if we believe the market stays flat, I need to plan to be happy with the home for 10 years. Am I looking at this correctly?
MM,
You are absolutely correct. In a long term flat market you need to either buy what will suit you for 10 or more years, or plan on saving up money on the side for your next downpayment.
(not that I verified the numbers or anything)
Spider-
I absolutely agree we should be redoing the energy grid, making cars more efficient, finding clean energy... The problem is this takes time. Although there are many many brilliant people working in finance these people would not be useful if you told them to switch careers. Its a slow process convincing people these fields are the future, so they get the right education necessary.
There is currently a ton of money going to these fields. My financee does work on certifying green buildings and they are having trouble training people as quickly as they are hiring them. So I think you will continue to be upset, because it is hard to make massive changes quickly so the government is slowly trying to avoid a collapse while pushing its main agenda points healthcare/clean energy.
MM,
I'm in the camp that believes the concept of 'move-up' to be a sham perpetrated by Realtors interested in multiple commissions. Regardless of the market, except in extraordinary boom times, generally the only thing you can count on from house appreciation is that it'll keep pace with inflation. So each move is costing you 6% of your saved equity, and there will be no appreciation equity (when adjusted for inflation). So--buy a house that will suit you for the forseeable future. Be that 30 years, or 10.
"Spider said...
If you think unemployment would have been higher if we didn't do TARP...here is what I think:
When an industry is bloated, it needs to be allowed to be shrunk. You don't waste money to prop that sector up. You invest money in other sectors to balance the employment (financial vs. clean energy, as an example). It would have been a smart idea to invest hundreds of billions in clean energy or infrastructure to create jobs that they wasted instead to buy TA (crap)."
Spider - again you are mistaken. I bet you didnt know this but probably the single biggest benefactor of TARP (on the "main street" end of things) was clean energy!
Like all R&D ventures, clean energy firms have huge problems with cashflow. Months or even years of next to no money coming in, followed by a huge payment when an order is completed and a product delivered. For these sorts of ventures, the chattel paper and revolving LOC markets are absolutely essential.
That was one of the big things that told me something was terribly wrong. From 2006 to late 2008, my homebuilding and autodealer clients were dying and that was fine. It was a bloated industry and needed to go. Thats part of the thinning of the herd that is the hallmark of the "creative destruction" of a recession.
but
for those 2 weeks after Lehman Failed, I was seeing not only bloated industries, but fledgling industries like green technology, small cap pharma, nanotechnology, aerospace (microsatellites), etc, all coming to me saying "our lines are frozen and we cant pay our employees," thats when I knew something was terribly wrong and must be remedied fast.
So basically that was the problem, we were on the verge of going from "creative destruction" to just destruction, and in a properly functioning market, that should never happen.
Spider-
You should be happy that Obama is trying to put a punative tax on the banks. tax
The government already made money on the TARP loans from banks, but it is becoming more and more likely these banks will also need to cover the TARP losses related to GM, AIG, and other loan mod programs affiliated with TARP.
Cara, Xpovos,
tks.
how depressing. usually this is where i write 'i need a drink.' but no, what i really need is a winning lottery ticket.
MM,
Our cat would like us to get a winning lottery ticket so we could stay home all day. She's hiding in the bathroom next to the heater whenever we're not there.
Are the properties you're looking at really untenable for the long term? They didn't look too bad to me.
"Leroy? Really? You put him in the bull camp?"
Do you see what I am dealing with?
Why is it that everyone seems intent on lumping me in with the "other" guys?
Two days ago I had people saying they were surprised I was not more bearish because they thought I was some kind of super bear... now look at me getting lumped in with Robert...
Leroy
Sorry i lumped you withthe bulls,
it was a brain fault, i was up till 3 AM delivering a cost proposal.
HB ( I Hope it's HB)
says
"Hedge funds were not bailed out directly. "
Balls,
Goldman is a hedge fund. They call themselves a I Bank but they are a hedge fund.
Lehman, Bear, all these were hedge funds.
Any entity that does significant proprietary trading becomes a hedge fund.
Frankly Harvard is a hedge fund with a universty attached, not a University.
When Endowment losses freeze their entire capital program? They are a hedge fund not a College.
it's part of the problem, we can't tell who isn't a hedge fund anymore.
Enron was a hedge fund masquerading as a utility company.
Leroy,
I totally hear you. I'm sure you've seen the occasional mudslinging in the past few months when I post a few too many "optimistic" things about the bottoming process in a row. I'm the enemy now. Self-delusional to boot.
Because you know, that whole extremely fiscally conservative approach to the buying process couldn't possibly have resulted in a rational purchase of a home we love that's well within our means... Nor could our analysis of the cost to rent ratio and acting accordingly be a sign that the fundamentals have been reached... And of course my opinion on buying must have changed completely once it was my own purchase, given that a year ago I wasn't congratulating dgg on his TH short sale, and Tabitha on buying her dream home. Nope, no, I'm entirely changed, suddenly in the last two months or so. Right. And it's the house purchase that did this, not seeing inventory down to nothing, and all the well priced homes going in under 2 weeks, and the prices getting less widely variable, and much more in line with actual attributes of the home... No, it couldn't have been what I was seeing on the ground that convinced me that buying now was a decently safe long-term bet, no it was obviously buying itself that makes me see everything else in this light.
Whatever, when I was "bearish" they were lapping it up. But I was never "bearish" I was just calling it as I saw it, and taking the data as it came. Nothing has changed but the data itself.
MM,
get a drink, it is a better investment than lottery ticket.
the only way to get comfortable with this housing crap is to re-evaluate the meaning of the house to you. if you need a nice one and it is expensive --- just need to make more money. if you do not want to --- stop thinking about it, it will be more beneficial.
MM, please do not enter the HGTV dream home sweepstakes, because that would hurt my chances of winning it (from 1 in 10 bazillion to 1 in 10 bazillion and 1).
Konstantin,
I need to make more money, with or without house purchasing. I'm willing to listen to your get-rich-quick scheme.
I agree with Cara. In my mind, the market is done correcting (and over-correcting in certain areas) in NoVA. The $8,000 credit combined with much lower home prices and low interest rates compared to several years ago heated up the housing market enough to create a level of demand necessary to stop the free-fall in prices. When the 8k credit disappears, we might see a slight drop in prices but the only thing I see causing another sudden and drastic drop in prices will be a double dip recession.
Jeff,Cara
Prices are no longer insane but they are reasonably indeterminate.
If i read the CS graph for DC, while the superbubble is over, the index is still higher then any previous bubble.
I was around in 87, when it was 18% annual appreciation in MoCo, and nothing but room to go.
I was also around for the long misery of the early 90's.
could we have 10 years of misery? Sure.
Could we have a quick, short surge down, then a growth path? Sure.
Could aliens invade? well, that's doubtful. But could interest rates go up 1%, easy. 2% sure.
6-8%?
"Chairman of the Federal Reserve
Paul Volcker, a Democrat,[5] was appointed Chairman of the Federal Reserve in August 1979 by President Jimmy Carter and reappointed in 1983 by President Ronald Reagan.[6]
Volcker's Fed is widely credited with ending the United States' stagflation crisis of the 1970s. Inflation, which peaked at 13.5% in 1981, was successfully lowered to 3.2% by 1983.
The federal funds rate, which had averaged 11.2% in 1979, was raised by Volcker to a peak of 20% in June 1981. The prime rate rose to 21.5% in '81 as well.[7]"
Cheap money is great if you need to refi, it's a dangerous thing if you are entering the market.
Me I think Bernanke hates Obama, and will wait until he's reconfirmed as fed chair, and then he'll jack up interest rates.
that will spike the deficit, slow the economy, and crush the dems.
How dare the Dems propose a tax on bankers, he'll show them the power of an accounting ledger.
pat said...
Cheap money is great if you need to refi, it's a dangerous thing if you are entering the market.
elaborate for the simple-minded, tks!
Ace,
if you tell me what you know about Alcova Heights then i won't mess up your dream home winning chances (i actually think DC lottery odds would be higher...)
Cara,
the homes i've just now begin to look at (facing reality) would work for about five years, barring lottery winning or lightning striking...
Pat-
I agree they have large trading operations, and in fact many of those banks have hedge funds but I still contend they aren't hedge funds. In my mind there are two major differences between hedge funds and investment banks. First investment banks are regulated. Hedge funds have virtually no regulations on how they invest there money and what leverage they use. All of these banks had capital requirements. Sure the regulators were idiots and had no idea how risky assets were but there was regulation.
Second hedge funds invests other peoples money rather than having their own balance sheets where they keep the profits. Obviously in both industries you are better off if you make money, but in one case the capital belongs to the bank in the other is belongs to the investors.
MM
Suppose you own a house, bought in 2000 for say 350K. You put 50K down
and began paying n a 30 year mortgage with 8.5% interest.
You are looking at a 2361 Principal and Interest payment.
now suppose you have never Refi'd, you didn't want to do the paperwork or whatever.
todays 30 year rate is 5%, so your PI drops to 1641, or $700 less per month.
Good times, Good Time, Laissez Le Bon Temps Roullet. Living La Vida Loca.
Great Deal for the long time owner.
Now consider someone who buys today
who can just barely afford 1650/month PI.
Most people buy to the max 28-33% DTI or more.
Now suppose rates rise from 5% to 7%.
That buyer who just entered in order to sell to another buyer with
that same income must lower the price 15%...
Houses behave like Bonds, the price is inverse to Rates.
If Interest rates are 25%, what price house can someone making $100K afford?
If Interest rates go to 0%, what price house can someone making zero afford.
Bernanke by smashing rates has tried to stabilize prices.
What he's done is pump air back into house prices. When interest rates return to mean, prices will collapse again.
got it MM?
Xpovos,
Just wanted to note that this blog can become a little bit depressing place if we try to rationalize things too much and complain about other people not being rational. And it was more of an advice to myself. I spend too much type thinking about housing market.
My situation is pretty funny, I have a large financial incentive to buy a place (compared to an average buyer), but at the same time not sure if I want to stay in the area for more than 2-3 years, so buying something not at rental parity does not make sense, while rental parity does not exist where I want to live. It will be not very funny if I'm still here in 5 years and renting, can be a major display of overcautios/indecisive behavior.
pat-
Your example is absolutely true if things happen quickly. I am hoping for this, but this is not the only scenario. You can also imagine rates going up ~0.5% a year and ~3% inflation making it so the nominal price on a house doesn't change. When selling the nominal price is more important than the real price, because you only care if you are underwater.
Pat, I can understand your ideas but I don't necessarily agree with them. I mean, most people plan on staying in their house for quite some time. I would have to assume that the majority of people aren't buying a house today to flip. If you look at the average house price in say, '72 then compare that to '82 what do you see? Sure there's high interest rates but the amount of inflation that occurred during that time period drastically effected prices as well. In other words, your assumption of extremely high interest rates would only apply in times of extremely high inflation. With that kind of inflation, wages and home prices also increase. Sure the true value of the house might stay the same when you sell but the amount you're paying compared to your wages during the tale end of the rapid inflation makes your home debt suddenly no so high.
Jeff-
I agree that most likely you would only see high interest rates with high inflation, but in theory you could also see them if banks need higher spreads over treasuries to compensate for the risks. During normal times a 3% inflation rate would translate into a 5% treasury rate and ~6.5%-7% mortgage rate. It would not be crazy if banks were still worried and added an additional 1%. Yielding 8% mortgage rates. This would be fairly harmful to the housing market and inflation would not really be high enough to help housing prices.
I am not saying this is what I think will happen, but it is one possibility.
Yeah, as others have noted, the notion that "houses behave like Bonds, the price is inverse to Rates" is a bit dubious.
One only needs to look at the late 70s and early 80s where mortgage rates were running 12% or more, yet nominal prices were running up "only" 7-8% a year, to see its not as obvious as one thinks.
It seems counterintuitive bigger monthly payment = lower house price. However, high mortgage rates is generally a sign of a good bit of inflation (of which wage inflation is a lagging, yet necessary component). Its likely that transaction volume will fall precipitously, but if you assume high mortage rates automatically = lower prices, you very likely are going to be disappointed.
I,too, think pat is wrong. I was going to post earlier but got too busy. As others have pointed out, one only has to look to the late '70's and early to mid 80's to see that prices did not crater during a period of high mortgage rates (up to 18%). CD's were 15%, which roughly correlates with today's spread.
As we discussed a few weeks ago, this is where an assumption or owner-financing (at a below market rate), ARMS and buy-downs come into play. I saw these instruments being used and also a frozen market, not drastic price cuts.
Assuming the "bad loans" have been flushed out by that time, people will have no reason (absent the usual - job loss, illness, etc.) to sell. In fact, if they have a low-rate mortgage and we see alot of wage inflation, their level of disposable income will increase greatly and they will have a great incentive to stay put. This will result in low inventory.
HB says
"First investment banks are regulated"
Balls.
If they were regulated, they wouldn't be sitting on CDS, derivatives, and had to steal a couple trillion from the treasury.
as for house prices in the 70's mortgages were assumable at that time, you could buy a house, and pick up the cheap financing.
My dad bought a house for 160K still sitting on it's old 5% mortgage with 13 years on the clock, he had to take a second trust
for the rest.
now the mortgages are all "Due on Sale"
Pat, I just looked at the PWC MRIS figures. Roughly half of those loans are FHA. Since the down payment on those loans is low, most of the buyers will be in those houses at least 10 years.
I mention FHA for another reason. You said "now the mortgages are all "Due on Sale"". All those FHA loans ARE assumable. So roughly half the mortgages being made right now with very low interest rates on starter homes are assumable.
While I disagree with your ideas about interest rates destroying the value of homes, if your theory actually pans out, those buying these FHA loans would have homes "worth more" than people with conventional loans.
xpovos said:
I'm in the camp that believes the concept of 'move-up' to be a sham perpetrated by Realtors interested in multiple commissions.
Amen!
Pat-
Did you read my post? I said they were regulated although the regulators were not good at what they do. This just means that by law they do have regulators go through their books and they do have capital requirements. I agree with you that the capital requirements were too low and the risk adjustments on the capital was also too low. So the regulation was not nearly stringent enough, but there is a difference between bad regulation and no regulation.
Konstantin,
I agree it can be depressing some times. We're either more rational or more cautious, or both, but the end result is that we elect to forgo a good because we perceive an intolerable risk associated with it.
Until that risk goes away, as it eventually does for most buyers, and as it has for several here. Because the risk factors are intensely personal.
So, yeah, depressing. But damn fun to bitch about.
MM,
I know this is not a fun question, but what would the math look like if you rented for another year? I know, with your landlord that may involve moving twice, but there are worse things than moving. In another year would you have the full 20% down + closing and moving costs? Would you have another raise that would nudge up the acceptable monthly payment, such that your 20 year home is within reach?
This process is painful, and making it drag on for another year is really painful, but if you'd be in a better financial position to be able to buy that 10-20 year home rather than the 5 year home, I'd say it's well worth it.
It'd be different if the 5 year home were so much cheaper than renting that the savings versus renting could be used to offset the transaction costs and build a new downpayment, but with the possible exception of condos, we're not there yet, if we ever will be.
Another possibility is the Tabitha route. If you told your parents where the situation housing wise really stood would they volunteer 13k each to firm up that downpayment? I know it's a terrible question. But when we first saw our house and were debating whether to put in an offer, both our mom's immediately volunteered financial help (not 13k). As it turned out, we didn't actually need it, but knowing that it was there if say our furnace, and all the appliances break at once, helped mightily with the piece of mind, given that we essentially moved $8k of our maintainence fund over into the DP to make it happen.
pat,
re: the 70's.
I don't know when conventional became due on sale; but they were in the early 80's, as far as I know. We were looking for FHA and VA assumptions in 1981. I don't have a memory of conventional assumptions during that time period.
MM, my perception of Alcova is that there are some nice parts and some not-so-nice parts. Very convenient location. So there might be some very good buys there.
Aunt Debbie Downer here: I think it's all well and good to plan to be in a place for 10+ years and make rent-or-buy decisions on that basis but would remind you youngsters that unexpected stuff happens. Jobs get lost or become unbearable, people are involuntarily transferred, or the job is just not as attractive as alternatives in other locations. Or the spouse/partner experiences that. Family members may need help. People marry or end marriages. Car and skiing accidents and serious illnesses occur, etc., etc., etc. So one needs to factor in not only how long one intends to be there, but does the plan still make sense if life happens in the interim?
Ace,
Very good point, and one not often brought up on here lately.
Life does indeed happen. And when adverse life events occur, they generally bring with them financial losses as well. So you need to do your best to insure that the financial losses aren't more crippling than the event itself.
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