A friend of mine recently bought a mansion. It’s 6,000 square feet with 6 bedrooms, 6 bathrooms and three balconies. He paid $1M for it.
The house is magnificent. It looks like something out of Tuscany. But I have to wonder, is it really worth the cost?
For me – not a chance.
My friend’s family is just him, his wife and their preteen daughter. They now each have 2 bedrooms, 2 bathrooms and 2000 square feet per person indoors plus they share a pool and a 3 car garage.
I’d estimate his mortgage, plus taxes, insurance, utilities, and landscape maintenance is $15,000 per month.
That’s a huge monthly nut.
Less than 8 years ago, this same friend was in bad financial straits.
At the time he asked me for advice. He was considering taking a 100% commission sales job because he needed to make more money.
He told me he was so broke that he couldn’t pay a plumber to fix his leaky sink. He said he wanted more for himself and his family.
I helped him work his way into a promotion with more pay. From there, his career took off, due to hard work and good timing. Within a year, both he and his wife had high paying positions making great money. Financially, things had turned completely around.
Since then, I’d estimate that they earned 4X what I did during the same time period. Had I made that much, I would be fully retired today and financially secure for the rest of my life.
But I suspect they are not. Instead they have the mansion, 2 leased BMWs, private school, a 2nd house, and all of the expenses that accompany a luxury lifestyle.
My Dream House is not a Mansion
When I grew up, I frequently shared a bedroom with my sister or my step-brothers. We shared 1 bathroom with up to 7 people. Mornings and bath times were hectic, but we made it work.
I dreamt of being able to own a house someday. I wasn’t dreaming of granite countertops, stainless steel appliances and a bathroom for every person. I dreamt of not being subject to a landlord’s whims. I wanted to have a dog, paint the walls any color I liked, fence in the yard, and not need to move when our lease was up.
Today, I have a beautiful 3 BR 2 BA house that’s 1900 square feet. We have a 2 car garage, a small pool (although I’d like to fill it in with rocks), and fenced in yard. For my wife and I, this is more than enough.
It’s also paid off. That’s a dream come true!
Two years ago I lost my job.
I received a call out of blue, that the company was reorganizing and my position was eliminated. Because we had saved aggressively for the previous 8 year and because we had lowered our monthly expenses, this was the first time in my life that I was unemployed and not stressed out. I was able to do an extended job search before deciding to try starting my own business.
My friend recently lost his job unexpectedly. He had to do an aggressive search search and find employment asap so he could pay his bills. Fortunately he landed another high paying job with in a few weeks.
Despite our much different circumstances, we’re both happy.
The thing is, although I never had the mansion and luxury vehicles, I used to have big monthly expenses that required a huge paycheck.
I’m grateful those days are over.
As for my friend, I wish he and his family nothing but the best. It’s a lifestyle I wouldn’t trade him for – even if I had the money.