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From Novelty to Necessity: The Growing Tiny Home Movement

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The Tiny Home Movement

Visualizing the Rise of Tiny Homes

Born out of the desire for a simpler, more affordable way of life, the tiny home movement has spread at a furious pace—with the global market estimated to grow by a CAGR of almost 7%, adding nearly $5.2 billion in market size by 2022.

Given the economic pressures of today’s world, these alternative housing solutions have become not only a viable option for many people, but a vital one.

Today’s infographic from Calculator.me illustrates how the tiny home market got so big, and how it fares against traditional housing when it comes to providing environmentally friendly and affordable options.

How Did Tiny Homes Get So Big?

It was not until the 2009 recession hit the U.S. that tiny homes became more of a realistic option, as the benefits of downscaling became more apparent.

From then on, three things propelled the popularity of tiny homes: rising house costs, shrinking incomes, and a greater consideration for the environment.

Today, 63% of U.S. millennials would consider living in a tiny home. However, the need to go tiny is not only confined to millennials, as 40% of tiny home owners are over fifty years old.

Tiny Vs. Traditional

According to the infographic, a home is considered tiny (or micro) when it is between 80-400ft², and is at least 8ft in height.

Tiny homes also come with a tiny pricetag, costing just $23,000 on average to build—meaning tiny homes are almost ⅒ the price of traditional homes.

MetricTiny HomesTraditional Homes
U.S. Median Cost$59,884$312,800
Average Cost To Build$23,000$206,132
Home Ownership78% own their home65% own their home
Mortgage32% have a mortgage64.1% have a mortgage
Credit Card Debt40% have credit card debt37% have credit card debt

Other benefits of tiny home living include:

  • Avoiding mortgage debt
  • Less maintenance required
  • Allows for a more flexible lifestyle

Further, tiny homes are providing people with alternative solutions for more sustainable living.

An Environmentally Friendly Way of Living

Certain models of tiny homes use energy from solar panels—presenting ample opportunities for an independent off-grid lifestyle. Moreover, research from Virginia Tech shows that living in tiny homes reduces energy consumption by up to 45%.

Using less energy can also be attributed to tiny homeowners using the space outside as an extension of their home. In fact, when there is usable space available outdoors, tiny home living may not seem as drastic in comparison to living in a traditional home.

Room For Improvement

There are however, some challenges for those who are considering this way of life. Zoning laws and building codes in the U.S. can be restrictive, with some states more supportive of the idea than others.

Despite these barriers, there are numerous organizations and initiatives that have been created in order to eliminate the pain points that come with tiny homes, and legitimize the industry.

Not Just a Passing Trend

With the promising trajectory of tiny homes, it is inevitable that the interest from global retailers continues to grow.

Japanese minimalist company, Muji, released their own tiny homes in 2017, costing $26,000 on average. At just under 107.6 ft², these tiny homes are prefabricated, meaning they are constructed in a factory off-site.

Amazon also recently announced their foray into the tiny home space, with dozens of models available on their website—delivering new homes right to their customers’ front doors.

The Future Comes in All Shapes and Sizes

Beyond the typical tiny home formats we see entering the market en masse, there are other alternatives which will become more readily available to consumers, including:

  • Traditional modular homes
  • Shipping containers
  • 3D printed houses
  • Recreational vehicles

It is also worth pointing out that tiny homes and these alternative models don’t have to be restricted to under 400ft². Flat packs and do-it-yourself tiny homes can be as big as 1,000ft², with some of the largest models housing up to 24 people.

It is clear that the tiny home movement is not just about going back to basics, but rather, about making home ownership a reality for everyone—potentially disrupting the current housing market in the process.

The question is not if tiny homes will become the new normal, but when.

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Investor Education

The Top 5 Reasons Clients Fire a Financial Advisor

Firing an advisor is often driven by more than cost and performance factors. Here are the top reasons clients ‘break up’ with their advisors.

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The following content is sponsored by Morningstar
This circle graphic shows the top reasons for firing a financial advisor.

The Top 5 Reasons Clients Fire a Financial Advisor

What drives investors to fire a financial advisor?

From saving for a down payment to planning for retirement, clients turn to advisors to guide them through life’s complex financial decisions. However, many of the key reasons for firing a financial advisor stem from emotional factors, and go beyond purely financial motivations.

We partnered with Morningstar to show the top reasons clients fire an advisor to provide insight on what’s driving investor behavior.

What Drives Firing Decisions?

Here are the top reasons clients terminated their advisor, based on a survey of 184 respondents:

Reason for Firing% of Respondents
Citing This Reason
Type of Motivation
Quality of financial advice
and services
32%Emotion-based reason
Quality of relationship21%Emotion-based reason
Cost of services17%Financial-based reason
Return performance11%Financial-based reason
Comfort handling financial
issues on their own
10%Emotion-based reason

Numbers may not total 100 due to rounding. Respondents could select more than one answer.

While firing an advisor is rare, many of the primary drivers behind firing decisions are also emotionally driven.

Often, advisors were fired due to the quality of the relationship. In many cases, this was due to an advisor not dedicating enough time to fully grasp their personal financial goals. Additionally, wealthier, and more financially literate clients are more likely to fire their advisors—highlighting the importance of understanding the client. 

Key Takeaways

Given these driving factors, here are five ways that advisors can build a lasting relationship through recognizing their clients’ emotional needs:

  • Understand your clients’ deeper goals
  • Reach out proactively
  • Act as a financial coach
  • Keep clients updated
  • Conduct goal-setting exercises on a regular basis

By communicating their value and setting expectations early, advisors can help prevent setbacks in their practice by adeptly recognizing the emotional motivators of their clients.

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Curious about what drives investors to hire a financial advisor? Discover the top 5 reasons here.

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