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Quote: Originally posted by ginmqi on May 14, 2013
Thanks for the welcome!
I agree no one should be living like hobo. I guess for me and in my opinion I would not do that because I do not want nor need a 10 million dollar house. I am perfectly happy in a 500,000 house...which to me is already an amazing upgrade to what I'm living in currently. But yeah if someone wants a 10 million dollar home and they can afford it right now then they can get it. It's their money. Just don't come crying to me if/when housing market/stock market crashes! :D
I do like cars (S2000, NSX, Diablo, etc.) and traveling so I'll get a RV and drive all over the USA. That'll be my big splurge.
I agree, I'd feel uncomfortable rattling around in a humongous house. When I'm bored I go look at the MLS map to see photos and videos of local properties for sale. Prices are rising here. Used to be a $400K house was perfect. Now I see a bunch for $600K. The ones I see for more than $750K are what would be a monstrosity to me. One had a huge bar, like bigger than some commercial bars I've been in. WTH would I do with that? And if I decided to take it out, what would I replace it with? It's practically in the living room which is already cavernous and certainly doesn't need to be expanded.
Here's the map. It's a Boise real estate site, but it looks like you can put any zip in and see homes for sale anywhere you'd like to live.
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Quote: Originally posted by HoLeeKau on May 14, 2013
I agree, I'd feel uncomfortable rattling around in a humongous house. When I'm bored I go look at the MLS map to see photos and videos of local properties for sale. Prices are rising here. Used to be a $400K house was perfect. Now I see a bunch for $600K. The ones I see for more than $750K are what would be a monstrosity to me. One had a huge bar, like bigger than some commercial bars I've been in. WTH would I do with that? And if I decided to take it out, what would I replace it with? It's practically in the living room which is already cavernous and certainly doesn't need to be expanded.
Here's the map. It's a Boise real estate site, but it looks like you can put any zip in and see homes for sale anywhere you'd like to live.
Yeah, housing prices are going up again and many think it's another bubble because of people who are flipping them and the people who were just waiting to buy are now finally coming in after the housing crash hit bottom.Dave Ramsey has it right in that you want to buy a home in a neighborhood that's a bit lower in price than the average home price in that area. Because then your value will likely go up, as opposed to buying a very high priced, nice home in a neighborhood that's over-valued.
Alot of people are looking at insane mansions just because it looks pretty on paper and just because they (think) they can afford it. But yeah a vast majority of people would do amazing with a 500,000 house (which is already an insanely nice home to start with). Hell, my friend is in a 250,000 home and it's better than where I'm at and that would honestly be so awesome to me. I like being close to my neighbors and not have a huge woods separating people.
Besides, the truly wealthy who made their millions who are in the million dollar neighborhood will probably laugh at the lotto winners who move in.
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Quote: Originally posted by JoshUK on May 14, 2013
Not a fan of huge houses, would just like a nice house in a nice place. Maybe a nice car and a few extra luxury items.
Agreed. It's all about how nice you can make it inside than having all these useless sitting rooms and library and all that. I like a nice, cozy place with very well furnished things. Also I like being relatively close to neighbors instead of having a huge piece of land.
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Quote: Originally posted by Ronnie316 on May 13, 2013
Welcome my friend. You make a good point and I respect your opinion, however I think part of winning should be finding a way to enjoy the windfall and I don't see how "only" 300 million would require scrimping and saving to the point of not buying a $10 million house if that's what a person wants.
I know people in their 70s with millions in the bank who are scrimping and saving for the future.......
Hello, do the math. The future is limited and $200 million divided by a life expectancy of 40 years equals $5 million a year of spending money even if you never made a dime off of interest!
I'm not saying its right for everyone, but I am saying its not necessarily an irresponsible decision.
A house in Paradise Valley that I would be quite happy with will run $2-$3 million.
Here's the thing. If your take home money is $120M then $10M is still very much doable. I get the arguments about insurance, taxes etc, but really, you could invest just $20M and still rake in at LEAST $60K a month on interest with any half decent financial advisor, a decent advisor will get you 85k-$100k.
You can get $30K if you do it yourself and don't do anything other than keep it in a low yielding savings/money market account. and if you have no mortgage, no car payments, no major monthly expenses to worry about, there is absolutely no reason why you couldn't afford a $10M home even if you lived somewhere ridiculously expensive like Cali where cost of living is ridiculous.
Chances are, unless you're looking in Manhattan or Cali or South Florida, it's actually hard to spend that much money on a house. There are GORGEOUS ESTATES (not houses...ESTATES) in Georgia for $5M or less. We're talking acres of land, 12k to 25k square feet with all the bells and whistles. Use the other half to get a winter house on the beach or canal in South Florida and a nice little condo in Manhattan. It would be the best of all worlds.
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Quote: Originally posted by Teddi on May 14, 2013
Here's the thing. If your take home money is $120M then $10M is still very much doable. I get the arguments about insurance, taxes etc, but really, you could invest just $20M and still rake in at LEAST $60K a month on interest with any half decent financial advisor, a decent advisor will get you 85k-$100k.
You can get $30K if you do it yourself and don't do anything other than keep it in a low yielding savings/money market account. and if you have no mortgage, no car payments, no major monthly expenses to worry about, there is absolutely no reason why you couldn't afford a $10M home even if you lived somewhere ridiculously expensive like Cali where cost of living is ridiculous.
Chances are, unless you're looking in Manhattan or Cali or South Florida, it's actually hard to spend that much money on a house. There are GORGEOUS ESTATES (not houses...ESTATES) in Georgia for $5M or less. We're talking acres of land, 12k to 25k square feet with all the bells and whistles. Use the other half to get a winter house on the beach or canal in South Florida and a nice little condo in Manhattan. It would be the best of all worlds.
You could make it work and if that's what someone really wants then it's their money. With investing, you need to be raking in at least 3% just to keep up with inflation. So you need to make way more over that to have actual spending money on top of the growth to keep up with inflation.Keeping it in a savings/money market/CD is very safe (super low risk) but also you're losing money each year because inflation rate is higher than the interest earned in those accounts. Also certain investments you need to be in it for a while or you get penalty/taxed if you take it out too early. So you need to establish low tax, low penalty ways to generate annual liquidity. Just because a person is earning that much a year doesn't mean they have that liquidity (cash) to use it. With a 120 million portfolio, you need to be making at least 3.6 million each year (or $300,000 a month) just to keep up with inflation. So you need to make more than 300,000/month if you want to have extra spending cash. Not to mention the cut that the financial advisor is going to take (1 or even 2%)
Even without mortgage or car payments there are tons of monthly expenses to worry about keeping up a 10 million dollar home: taxes, insurance, land scaping, water, electricity, trash/sewage, gas, repair/maintenance work in and out of the house like roofing, siding (if needed), specialized work for any weird/extra things a 10 million dollar home has (hot tub, bar, swimming pool, tennis court, home theater, etc.), also any home owner's association fees. Having a very large and expensive home would increase these costs tremendously. Especially insurance (and obviously taxes) because the insurance company would be taking a HUGE risk in insuring something that big. It'll be interesting to see what real 10 million dollar home costs in terms of yearly expenses.
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Quote: Originally posted by Teddi on May 14, 2013
Here's the thing. If your take home money is $120M then $10M is still very much doable. I get the arguments about insurance, taxes etc, but really, you could invest just $20M and still rake in at LEAST $60K a month on interest with any half decent financial advisor, a decent advisor will get you 85k-$100k.
You can get $30K if you do it yourself and don't do anything other than keep it in a low yielding savings/money market account. and if you have no mortgage, no car payments, no major monthly expenses to worry about, there is absolutely no reason why you couldn't afford a $10M home even if you lived somewhere ridiculously expensive like Cali where cost of living is ridiculous.
Chances are, unless you're looking in Manhattan or Cali or South Florida, it's actually hard to spend that much money on a house. There are GORGEOUS ESTATES (not houses...ESTATES) in Georgia for $5M or less. We're talking acres of land, 12k to 25k square feet with all the bells and whistles. Use the other half to get a winter house on the beach or canal in South Florida and a nice little condo in Manhattan. It would be the best of all worlds.
You are right on the money Teddi, thanks for posting.
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Quote: Originally posted by ginmqi on May 14, 2013
You could make it work and if that's what someone really wants then it's their money. With investing, you need to be raking in at least 3% just to keep up with inflation. So you need to make way more over that to have actual spending money on top of the growth to keep up with inflation.Keeping it in a savings/money market/CD is very safe (super low risk) but also you're losing money each year because inflation rate is higher than the interest earned in those accounts. Also certain investments you need to be in it for a while or you get penalty/taxed if you take it out too early. So you need to establish low tax, low penalty ways to generate annual liquidity. Just because a person is earning that much a year doesn't mean they have that liquidity (cash) to use it. With a 120 million portfolio, you need to be making at least 3.6 million each year (or $300,000 a month) just to keep up with inflation. So you need to make more than 300,000/month if you want to have extra spending cash. Not to mention the cut that the financial advisor is going to take (1 or even 2%)
Even without mortgage or car payments there are tons of monthly expenses to worry about keeping up a 10 million dollar home: taxes, insurance, land scaping, water, electricity, trash/sewage, gas, repair/maintenance work in and out of the house like roofing, siding (if needed), specialized work for any weird/extra things a 10 million dollar home has (hot tub, bar, swimming pool, tennis court, home theater, etc.), also any home owner's association fees. Having a very large and expensive home would increase these costs tremendously. Especially insurance (and obviously taxes) because the insurance company would be taking a HUGE risk in insuring something that big. It'll be interesting to see what real 10 million dollar home costs in terms of yearly expenses.
Taxes on a $10M (14,000 square ft) house in Palm Beach county...on the water is $67k. But we can round that up to $6k per month for the sake of this convo.
Let's pretend you can actually do this and assign $15K per month on utilities (light, water, gas), and you'd probably have to keep every light on 24/7 and run water constantly to get there.
Security system, housekeeper, gardening, homeowners and flood insurance we can guesstimate to be 15K a month, but let's tack on extra $$ for an umbrella policy...and cable. So put that up $20k per month.
Now let's add 15K per month for any incidentals on the house. Maybe you'll need to patch the roof or fix a fence.
For everything, and asuming you're in a party house where lights, water, hot tub are constantly in use, we're up to $56,000 per month. Round that up to $60K for anything else I might have missed like HOA fees, PPV boxing and a butler. $60,000 per month = $720,000 per year. But let's still add an addtl $30K for anything else house-related that could even pop up like an unexpected hike in insurance premiums. Maybe another $50k on top of that for more palm trees, a tricked out grill and a per diem personal chef. Now we've covered EVERYTHING, every conceivable eventuality and we're up to $800,000 per year.
And this is Palm Beach county. Home of Billionaires' Row. Where when police, firefighters and teachers complained that the cost of living was too high, they couldn't afford to live in the county they serve, and the mayor told them to move somewhere else.
Take that $10M house and put it somewhere like Georgia, Tennessee, the Carolinas and your costs go way way way down. Especially if you're not on the water and you don't have to contend with monster flood policy payments.
You could invest ONLY one quarter of your JP CONSERVATIVELY and make enough in interest ALONE to cover that $800K and still have another half a million dollars to play around with. Without ever needing to touch your principle. If you only invested $30M at 5% per annum, that's $1.5m in interest payments per year. That's almost double what you would need to run your $10M home. Invest $40M, $50M, $60M and...you get the picture.
If after you paid every single bill and expense you can conceivably have, and still have anywhere from 1/2 a Million to $2M to play with... money left over AFTER ALL EXPENSES and STILL never ever touching the rest of the jackpot, seriously, do you really and honestly think paying an extra 3% on anything for inflation should put you in a tizzy? I guarantee an extra 50 cents for milk or an extra dollar for steak will not send you to debtors prison. Unless the US turns into a 3rd world country in your lifetime and you have to contend with a 15% -20% inflation rate, you'll be fine. Millionaires in 3rd world countries deal with those inflation rates every year and they're doing just fine. Believe me.
You don't even need to break even with inflation, all you need is enough to pay your bills. Once you have that, why are you fretting about a 3% increase in anything? Whether your home value goes up or down, why would that bother you? It's paid in full. If it goes down, you have less taxes and lower insurance premiums to contend with. If it goes up, you've made a fine investment choice and you can flip it if for a profit if you want to. Either way, you're golden.
The stock market could crash, you could lose the entire $30M you invested and never receive a single interest payment again and still be fine. Still $90M left. Cut back on the butler, personal chef and 24/7 hot tub parties, and you'll still manage to do more than scrape by.
Do I think it's prudent to spend a possible $800K on upkeep on one house. Absolutely not. I'd either have a less expensive house in a less expensive county or allot $10M to my real estate portfolio and buy multiple properties with it. But I'm certainly not going to call it a waste or stupid for someone else to buy a $10M house if they can afford it and it's what they want. Because that's the marvelous thing about a large jackpot lottery, you don't have to be prudent. As long as you've factored in everything, considered all expenses and you can more than afford it, you can go hog wild within those parameters and enjoy life like you never have before.
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Quote: Originally posted by ginmqi on May 14, 2013
Agreed. It's all about how nice you can make it inside than having all these useless sitting rooms and library and all that. I like a nice, cozy place with very well furnished things. Also I like being relatively close to neighbors instead of having a huge piece of land.
"...I like being relatively close to neighbors..."
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Quote: Originally posted by rdgrnr on May 14, 2013
"...I like being relatively close to neighbors..."
Me and you are polar opposites, LOL.
Me and you both. No close neighbors.
Less neighbors = less problems.
I have a large extended family and good friends. I'm good. We can wave to each other as we pass by. That's good enough. No one needs to bring over a pecan pie or lend me a cup of sugar.
I want land and plenty of it. Grow my own herbs, fruits and veggies. Maybe have a stocked lake to go fishing in when the mood strikes. I'd trade an herb garden and fish for close neighbors any day. LOL.
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Quote: Originally posted by Teddi on May 14, 2013
Taxes on a $10M (14,000 square ft) house in Palm Beach county...on the water is $67k. But we can round that up to $6k per month for the sake of this convo.
Let's pretend you can actually do this and assign $15K per month on utilities (light, water, gas), and you'd probably have to keep every light on 24/7 and run water constantly to get there.
Security system, housekeeper, gardening, homeowners and flood insurance we can guesstimate to be 15K a month, but let's tack on extra $$ for an umbrella policy...and cable. So put that up $20k per month.
Now let's add 15K per month for any incidentals on the house. Maybe you'll need to patch the roof or fix a fence.
For everything, and asuming you're in a party house where lights, water, hot tub are constantly in use, we're up to $56,000 per month. Round that up to $60K for anything else I might have missed like HOA fees, PPV boxing and a butler. $60,000 per month = $720,000 per year. But let's still add an addtl $30K for anything else house-related that could even pop up like an unexpected hike in insurance premiums. Maybe another $50k on top of that for more palm trees, a tricked out grill and a per diem personal chef. Now we've covered EVERYTHING, every conceivable eventuality and we're up to $800,000 per year.
And this is Palm Beach county. Home of Billionaires' Row. Where when police, firefighters and teachers complained that the cost of living was too high, they couldn't afford to live in the county they serve, and the mayor told them to move somewhere else.
Take that $10M house and put it somewhere like Georgia, Tennessee, the Carolinas and your costs go way way way down. Especially if you're not on the water and you don't have to contend with monster flood policy payments.
You could invest ONLY one quarter of your JP CONSERVATIVELY and make enough in interest ALONE to cover that $800K and still have another half a million dollars to play around with. Without ever needing to touch your principle. If you only invested $30M at 5% per annum, that's $1.5m in interest payments per year. That's almost double what you would need to run your $10M home. Invest $40M, $50M, $60M and...you get the picture.
If after you paid every single bill and expense you can conceivably have, and still have anywhere from 1/2 a Million to $2M to play with... money left over AFTER ALL EXPENSES and STILL never ever touching the rest of the jackpot, seriously, do you really and honestly think paying an extra 3% on anything for inflation should put you in a tizzy? I guarantee an extra 50 cents for milk or an extra dollar for steak will not send you to debtors prison. Unless the US turns into a 3rd world country in your lifetime and you have to contend with a 15% -20% inflation rate, you'll be fine. Millionaires in 3rd world countries deal with those inflation rates every year and they're doing just fine. Believe me.
You don't even need to break even with inflation, all you need is enough to pay your bills. Once you have that, why are you fretting about a 3% increase in anything? Whether your home value goes up or down, why would that bother you? It's paid in full. If it goes down, you have less taxes and lower insurance premiums to contend with. If it goes up, you've made a fine investment choice and you can flip it if for a profit if you want to. Either way, you're golden.
The stock market could crash, you could lose the entire $30M you invested and never receive a single interest payment again and still be fine. Still $90M left. Cut back on the butler, personal chef and 24/7 hot tub parties, and you'll still manage to do more than scrape by.
Do I think it's prudent to spend a possible $800K on upkeep on one house. Absolutely not. I'd either have a less expensive house in a less expensive county or allot $10M to my real estate portfolio and buy multiple properties with it. But I'm certainly not going to call it a waste or stupid for someone else to buy a $10M house if they can afford it and it's what they want. Because that's the marvelous thing about a large jackpot lottery, you don't have to be prudent. As long as you've factored in everything, considered all expenses and you can more than afford it, you can go hog wild within those parameters and enjoy life like you never have before.
So just rent, it's much cheaper.
Rich people do that now with personal jets and high end boats. It's like time shares but with jets and boats. Time shares allow one or more occupants to share a living space, mostly on the shore, and everyone who participates buys a time share for a period of time that all agree on. The occupants may have a month or two and then some other person/s takes over. No maintenance, fees, or any other expenses, just a flat rate.
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Quote: Originally posted by noise-gate on May 14, 2013
I have lived all my life in big homes, so its no big deal, but $10 mil is a lot of house and if its just you and the wife- its a little overkill.
There was one couple featured on TLCML, who built a huge house in a very blue blood neighborhood. And they agree that it's much too much house for just the 2 of them. But they wanted the opportunity to experience what it was like to live in a mansion. Jetted tubs, home theater, the works. They planned to stay there only for a few years, then sell it and get a smaller place.
I love that concept. Experience a little extravagance then go back to being you. Best of both worlds.
and they felt the way I've read a lot of people on here have said, that they expected these neighbors to look down their noses at them, but they didn't. They've fit right in with no snobbery issues. So you never know.
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Quote: Originally posted by onlymoney on May 14, 2013
So just rent, it's much cheaper.
Rich people do that now with personal jets and high end boats. It's like time shares but with jets and boats. Time shares allow one or more occupants to share a living space, mostly on the shore, and everyone who participates buys a time share for a period of time that all agree on. The occupants may have a month or two and then some other person/s takes over. No maintenance, fees, or any other expenses, just a flat rate.
What do you mean rent? Rent your primary home, or rent a vacation home? If it's a primary home, then no. That would be too big of a waste. Same money you pay for rent you could pay for a mortgage and still have something to show for it later on.
And even a mortgage I wouldn't get if I had a choice. I never could understand millionaire winners or athletes who have their homes foreclosed or have nowhere to live. Someone gives you a check for $20M, why take out a mortgage on a $1M house. If it's your primary residence, if you aren't planning to move soon, buy it outright. No millionaire should ever end up homeless is my view.
If it's a vacation home, then yes. Renting makes more sense in a way. No extra taxes or utilities to worry about on a place that is used only a couple of weeks/months out of the year. If property values take another plunge it's one less place to worry about. But really, why not just spend the same amount of money and book a hotel room when vacationing? Nothing beats no housework. Clothes laundered, gourmet food available 24/7. In suite massages. Drivers at your beck and call, a concierge to get you tickets to whatever events you want to attend. THAT I'd pay for.
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So, I was thinking no way would I ever spend $10m on a home even if it was possible... then I came across this:
"Exquisite Colorado Estate on 370 bucolic acres in Saddle Notch, Loveland surrounded on three sides by open space. State of the Art log home designed by Architect Kathy Scott and built by Pioneer Log Homes of British Columbia with incredible attention to detail. All interior wood surfaces designed and created by homeowner's personal company Genesis Innovations. Extraordinary hand carved kitchen cabinets. Gorgeous hand planed hickory wood floors. Immense carved pieces throughout created specifically for the home by artist Paul Stark. Beautiful custom light fixtures by artist, Peter Fillerup. Stone hearths from indigenous rock."
* In hot pursuit of $ *White Shores- California
100The Hall Of The Mountain Kings Tennessee
