diff --git a/examples/hosts.yaml b/examples/hosts.yaml
index 0cb42f5bb07..d29e081b21e 100644
--- a/examples/hosts.yaml
+++ b/examples/hosts.yaml
@@ -4,15 +4,16 @@
 #
 #   - Comments begin with the '#' character
 #   - Blank lines are ignored
-#   - Top level entries are assumed to be groups
+#   - Top level entries are assumed to be groups, start with 'all' to have a full hierchy
 #   - Hosts must be specified in a group's hosts:
 #     and they must be a key (: terminated)
 #   - groups can have children, hosts and vars keys
 #   - Anything defined under a hosts is assumed to be a var
 #   - You can enter hostnames or ip addresses
 #   - A hostname/ip can be a member of multiple groups
-# Ex 1: Ungrouped hosts, put in 'ungrouped' group
-##ungrouped:
+
+# Ex 1: Ungrouped hosts, put in 'all' or 'ungrouped' group
+##all:
 ##  hosts:
 ##      green.example.com:
 ##          ansible_ssh_host: 191.168.100.32
@@ -21,23 +22,29 @@
 ##      192.168.100.10:
 
 # Ex 2: A collection of hosts belonging to the 'webservers' group
-
-##webservers:
-##  hosts:
-##      alpha.example.org:
-##      beta.example.org:
-##      192.168.1.100:
-##      192.168.1.110:
+##  children:
+##    webservers:
+##      hosts:
+##        alpha.example.org:
+##        beta.example.org:
+##        192.168.1.100:
+##        192.168.1.110:
 
 # Ex 3: You can create hosts using ranges and add children groups and vars to a group
 # The child group can define anything you would normally add to a group
 
-##testing:
-##  hosts:
-##      www[001:006].example.com:
+##    testing:
+##      hosts:
+##        www[001:006].example.com:
+##      vars:
+##        testing1: value1
+##      children:
+##        webservers:
+##            hosts:
+##                beta.example.org:
+
+# Ex 4: all vars
+# keeping withing 'all' group you can define common 'all' vars here with lowest precedence
+
 ##  vars:
-##      testing1: value1
-##  children:
-##      webservers:
-##          hosts:
-##              beta.example.org:
+##      commontoall: thisvar