we’re running an old poll again, and we’ll do this from time to time to see how your opinions have changed. for example, is the shoe you’re running in made by the same company as the shoe you were running in a year ago?
but this poll re-do is not about products, it’s about how much things have changed financially among those in the slowtwitch family. 5 months ago we asked you the same questions we’re asking you now, on the poll on the right hand side of this page. 732 of you answered back then. if you’ll be so kind as to take the poll again, this will tell us all how we’re currently doing, as a group, versus how we were all doing back in september.
“I might have missed it, but what exactly do you do with all the data you’re collecting?”
we send it to the IRS and the NSA, matched up with your social security number and current porn subscriptions.
no, actually, we do nothing with the data, with these exceptions:
we use the poll data to forecast and, from time to time, report back to you all, the readers.
we have concurrent discussions, that you don’t see, with manufacturers, retailers, RDs, etc. for example, i had a talk on friday with a major component manufacturer. he’s looking for forecasting help. to the degree you tell us what you’re intending to buy, avoid, spend, not spend, we can tell the industry how to best ready themselves for your likely rate of consumption. this is not a revenue stream for us, we don’t charge for this, it’s just to help the industry better throttle up or down their production.
we track which IPs have voted. we only let one IP vote per poll. i know this excludes people who would vote from the same IP, nevertheless that’s what we do. but we don’t track which IP voted which way.
This is probably the wrong forum- but since you posted this here- The results of your poll baffle me a bit- actually quite a bit-especially with the typical triathlete demographics- own a home, household makes a higher than average income- probably a fair amount of retirement and investable assets- especially if an older triathlete household. Not sure who answers these polls (I tyipically don’t- and didn’t fwiw)- but a staggering 91% are either unaffected or lost a little. I’ll assume most, if not almost all the people answering are U.S. based- even though it’s a global recession (with the U.S. stock market fairing better than MOST all other developed or emerging country markets). I would define unaffected- as not losing anything (b/c if you lost some- you at least lost a little). And the category ‘lost a little’ would be - say 5-10% in my mind- and some might say 10%- historically is a lot. If you have a 1 Million dollar housing/stock portfolio on Jan 1- and it’s worth 900k at Dec 31- most would say losing a 100k is a lot of money and would not be happy about it. Anyway- for 91% to be unaffected or lost a little- that would lend me to believe that all of those people have- no money invested in anything other than money market funds (or no money?), or just don’t have investments- beyond money market funds/CDs, and rent an apartment/home, versus own a home. Maybe if you had an in between category: it might ellicit a different poll pattern.
Anyway- the AVERAGE- U.S. home has lost just under 20% of its highest appraised value in the last 2-3 years. Some areas have lost less, some areas have lost nearly 40%. So if a poll responder once had a 500k home- in an average area- it’s worth 400k, and if they had average stock market performance- S&P 500 they’ve lost 47.3% from Oct 2007. Maybe they are half cash half S&P- that’s still 25%. Also- January- ended up being the WORST January EVER for the U.S. stock market- down almost 10%. Anyway- the poll demographics just don’t seem to remotely reflect the economic conditions // triathlete income/assets/home ownership.
US ECONOMY: US November S&P/Case-Shiller 20-City Home Price Index Down 18.2% YOY
01.27.09, 09:15 AM EST
Washington, January 27 - The S&P/Case-Shiller 20-city home price index fell a record 18.2% in the year ending November to 154.59. The 10-city index matched the previous month’s record decline of 19.1% over the year, bringing the index down to 166.05.
Both indices fell 2.2% from October to November.
The index showed yearly price declines in all 20 of the cities surveyed, 11 of which experienced record annual price declines. For the third consecutive month, all 20 regions experienced monthly price declines. Eight cities – Atlanta, Boston, Charlotte, Chicago, Dallas, New York, Portland and Seattle – posted record monthly declines. Phoenix and Las Vegas experienced the steepest price declines in the month, at -3.4% and -3.3% respectively
specific to your point, i’ll tell you how i look at it. yes, my home has gone down in value. yes, i think most folks’ investments have gone down. but investments, and real estate, is always cyclical. you don’t gain and you don’t lose until you cash out. speaking for myself, i haven’t lost a thing, because the investments i have are long term. i would only lose if i sold, which i don’t plan to do. likewise, if my investments triple tomorrow, i haven’t gained a thing, because i don’t plan to sell. i don’t know if others feel similarly, or not. but this might explain why some vote as they do.
specific to your point, i’ll tell you how i look at it. yes, my home has gone down in value. yes, i think most folks’ investments have gone down. but investments, and real estate, is always cyclical. you don’t gain and you don’t lose until you cash out. speaking for myself, i haven’t lost a thing, because the investments i have are long term. i would only lose if i sold, which i don’t plan to do. likewise, if my investments triple tomorrow, i haven’t gained a thing, because i don’t plan to sell. i don’t know if others feel similarly, or not. but this might explain why some vote as they do.
imho, that’s a rose colored glass view of your net worth- and maybe other people share that viewpoint, which is a misnomer. talk to any Japanese Citizen- their stock market index was 38,900 in the late 1980s and is in the 7955 range today (i wonder how many of those investors had your long term perspective with their holdings in the early 1990s- only to find their investments to continue to plummet). 20 years later the Japanese index is- 79% lower- most of those investors will be long dead before it recovers- whether they decided to sell or not. Our Nasdaq market is down 71%- 8 years later- I wonder what someone who invested in QQQ in 2000 would say if they lost on that investment, b/c they hadn’t sold yet. The average homeowner- will be long dead before they inflation adjust recover their home price- in the cities where homes have dropped 40% from their value. typically homes improve by inflation- about 1-3% in most areas per yrear (this statistic held nice and true for nearly 50 years- from the 1950s up to 2000 or so-- until credit was given out to Fido for signing his paw print and stating his income. Too bad 3 woofs didn’t pay the mortgage. so for a home that went from 200k to 120k (say- Las Vegas, Phoenix, Tampa, etc)- It now has to go up 67% to get to where it was. It will take 21 years- for that homeowner to get back to the prior peak of 200k- 21 years- if it appreciates by typical historical inflation (2.5%)- so that’s a return to their highest appraised price- in approx 23 years. now here’s the kicker- they haven’t even remotely gotten back to even- the home just appreciated with inflation- they in a sense treaded water- no real gain above inflation. so how do they really recover their home price- they would have to DOUBLE the inflation rate for 17 YEARS IN A ROW on their home- to fully recover to their prior highest appraised price. call me a cynic- but i don’t think homes will double the pace of inflation for 17 years- straight- as homes will most likely go back to the mean- and appreciate with inflation as they did from 1950s to 2000. If a person lives in the avg town that lost the avg 20%- they will have to have their home increase at DOUBLE the pace of inflation for 9 years straight - just to get back to their highest appraised price… and many economists feel home prices will continue to drop another 15-20%- based on the current nearly 13 month supply of single family home inventories (a record in a very bad way) and 17 month condo inventories nationally (normal is 5-6 months in a healthy economy)- and this is with the Nat’l assoc of realtors saying the affordability index is at an all time low- i.e.- purchase prices and interest rates.
Now on this networth aspect. Well- when an individual or any business- private or publicly traded company that has put together their balance sheet of assets and liabilities- their net worth summary has gone down (based on average market movements). The same reason many financial stocks have lost so much money- lots of the ‘toxic assets’ haven’t been sold- are still on their balance sheet- but the assets ‘marks’ (fair market value price) have torpedoed the company’s networth, and the financial’s//insurance stock price has plummeted- even though they haven’t sold. if 25% of americans wanted to refinance their home with some of the recent low mortgage interest rates- they won’t qualify without bringing money to the closing table b/c their mortgage is more than the value of their home. if you want to qualify for a loan based on assets - the decline in assets (again use market avgs) will result in a much smaller loan (even if qualifying standards were the same- but they are not- it’s more difficult now, much more difficult- and jumbo 30 year mortgages are 7%- that’s quite a bit more than 5%). Many successful (investment net worth wise) retired people have large portfolios of dividend producing stock investments- and the person might have been living off, say for example a 2 million dollar portfolio of stocks with a 4% dividend yield of their stocks - generating a 80k income, plus social security, etc. Well- many, many stocks have cut their dividends- in half or even more, so the income of that portfolio is much less- maybe 25k versus the prior 80k, and if the portfolio faired like the market- they would be down to about 1 million- and that person, like you, wasn’t planning on selling- but if you talk to people like that- they might go from retired to back to work and would not say they haven’t lost b/c they haven’t sold. just my humble opinion…
I understand Mark’s interpretation of the poll but I agree with Slowman’s reply to Mark’s first post. In my family, we have lost 40-50% of our 401k investments and some of the appreciation on our house. However, our salaries are stable (for the moment …) and our house is still worth more than what we paid for it. When I answered the poll with “Lost a little” I didn’t count what I think of as “bubble money” - the net worth that we had at the height of the bubble that we weren’t ready to cash in. For many retired people, as Mark already mentioned, this is a big problem. My wife and I are 35 years old and our philosophy is to keep working and spend a little less. To add to the financial stress we are about to have our first baby. But the info for Slowman is that my family’s $100k-plus combined income will not get spent on very much tri gear this year. We are worried about the possibility of layoffs, my wife gets no paid maternity leave, and adding a new member to the family might be more expensive than what we planned. And despite the downturn in the economy childcare in Boulder is over $1200 a week. Maybe the cost of childcare should be pegged to the DOW. In this economy, I wouldn’t mind
but investments, and real estate, is always cyclical. you don’t gain and you don’t lose until you cash out. speaking for myself, i haven’t lost a thing, because the investments i have are long term. i would only lose if i sold, which i don’t plan to do. likewise, if my investments triple tomorrow, i haven’t gained a thing, because i don’t plan to sell.
in totally “rational” economics, this may be generally correct. however, studies have repeatedly shown that 99% of human beings do not feel or behave in this way. these “paper losses” and “paper gains”, even if only theoretical, make people behave in completely different ways with regard to their other spending.
I want to meet those people who are unaffected. They must be in college or are “kept”.
Our 401k took a dump and our house lost 20%, but the rest is all good so I answered “lost a little”.
In many ways the economic problems are a positive for me personally as we(spouse and I) reevaluated our spending. No, we didn’t stop spending, but we did change a little bit in the need vs. wants area. My goal is to get my wife to cut 20% off her expensive coffee habit and I will cut down on “stocking up” on tri clothing just because it is on sale. A drop in house value was good for me as it saved me $1K/year in property taxes, although I probably could save another K or so just by protesting the assessments.
My father-in-law lost his job very early in 2008, but it turned out for the best. He DESPISED the job and most of his co-workers. Now he is teaching english at a community college and really enjoys it. He figures he can live on this if he adjusts his lifestyle a bit.
I bought my house in Chattanooga for $77,000 (yes $77,000) in 2000 and put maybe $5000 in it to fix up the kitchen and garage. The house was beautiful and many thought I got a great deal.
As I knew I was going to put it on the market late in 2008 I had all kinds of experts tell me that I should get around $150,000 for the house. We listed it in June for $129,000 but in the end we closed in late December for $105,000. Did I not get as much as I might have during a better economy? yes. Did I get screwed? no.
Yeah, if there was an option in between “lost a little” and “lost your fortune”, I would have chosen that option.
Dan,
I agree with TBB on this. When I was responding to the poll last night I told my wife the same thing. We have lost, at this point, one year combined income. We’ve owned our home 23 years and have no major debt or kids. We are both working…for now. So we’re ok but it still stings(:
Using your criteria, I have lost nothing. However, technically my net worth has been reduced if I had to cash out everything today. While we can’t fixate on net worth constantly as if we are cashing out today, it does have a psychological impact on how individuals and the entire economy on the aggregate, behaves.
My cash flow certainly has not changed, in fact technically with the new Govt of Canada budget, my cash flow should go up. I could buy a new car with cash today or go race in St. Croix, but I’m holding off cause I’m holding off with no good logical reason other than I feel better with a thick wad of cash under the mattress at the moment.
specific to your point, i’ll tell you how i look at it. yes, my home has gone down in value. yes, i think most folks’ investments have gone down. but investments, and real estate, is always cyclical. you don’t gain and you don’t lose until you cash out. speaking for myself, i haven’t lost a thing, because the investments i have are long term. i would only lose if i sold, which i don’t plan to do. likewise, if my investments triple tomorrow, i haven’t gained a thing, because i don’t plan to sell. i don’t know if others feel similarly, or not. but this might explain why some vote as they do.
