Is home ownership still a big deal among wealthy investors?
One main component of the American Dream is owning a home. Even though many Americans “own’’ their home through the graces of a mortgage loan, having a place of your own is an indication of upward mobility, success and the fruition of a lifetime of work.
Spectrem wondered if that was still true for some of the wealthiest American investors. In its wealth segmentation series report Financial Behaviors and the Investor’s Mindset, investors were asked to respond to the statement “purchasing a home as your primary residence is a very prudent financial decision”.
Asked to place their belief in the statement on a 0-to-100 scale, in which “0’’ stood for “not important’’ and “100” represented “very important”, the Ultra High Net Worth investors placed the statement validity at 82.11. That is a high figure, but perhaps not as high as one might think it would be for investors who have clearly succeeded at business.
The Ultra High Net Worth Investors have a net worth between $5 million and $25 million. Their rating on the value of purchasing a home was higher than that of Millionaires with a net worth between $1 million and $5 million (81.51) and the Mass Affluent investors with a net worth between $100,000 and $1 million (78.59).
But the UHNW investor rating for purchasing a home was lower than their rating on the statements “Getting a college education is very important” (88.24) and “a dedicated and regular savings program is something I consider very important” (85.52).
Among UHNW investors, the home ownership rating climbs as age increases. Among Millennials and Gen X investors, those under the age of 52, the home ownership questioned rated at 79.88, well below the statements about savings and college education. But even among the World War II investors, the value of home ownership only rated at 83.91.
The UHNW investors were segmented by occupation as well, and Business Owners gave the home ownership statement the highest rating at 87.41, higher than any other statement in the study. Professionals (attorneys, doctors, accountants) rated home ownership at 81.05, the lowest rating in the study.
The financial appeal of owning a home is well-documented. Advisors working with investors who have not yet done so could apply the tax advantages and life cost principles to a conversation with investors to suggest that their American Dream might include purchasing a home.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.