How do people afford 5 million + homes?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Own 2 homes, combined worth about $5.5M. How did we get there? Living below our means for many years, bought first home as one we could afford on only 1 salary (either of ours), and continued to save for retirement and life. Did not upgrade that home for 7+ years, until we relocated. Then bought a home for 50% of what "we could have".
Had that $500K+ home fully paid off by time we were 40.
But made the jump to $5M+ once we were able to cash in stock options. But without that we would still be at the $2M+ as affordable to us. Thru savings and living below our means and having a good salary to start with.

How much is that though?

Salary of $300-400K, with bonus possible up to 100% of salary (which typically is only 50% on average).

Key was in our 20s, we made 200K combined, and chose to buy a home of only $200K. Then we worked to save as much as possible. Soon after the combined salary went to $275K. We didn't take over the top fancy vacations, we drove a Nissan Sentra and a Honda Civic for 10+ years, when we could have easily afforded something newer, larger and much nicer.
So while that alone didn't get us to $5M homes, it was a strong start.
We also didn't have a dining room set or living room furniture in that $200K home (4 bed/2.5 bath typical family home). We didn't see the need to spend $4-5K to furnish those rooms that would hardly be used. so it was a mindset of not wasting $$$ and living comfortably but well below what you could easily afford.

Whereas, everyone else I knew bought a house based on both salaries (not 1) and then had to furnish it all with new stuff in first 3-4 months. They drove newer/bigger cars and everything else so many do to "keep up with the joneses".

So the answer is you earned a lot of money very young, that makes sense! Nothing to do with keeping up with the joneses really, more like living normally on a HUGE salary.

Yes, we had good salaries. But a large part of the key is we DID NOT spend everything we made. We SAVED and invested. Just stated that we had similar friends who did spend and save very little in their 20s and early 30s. I know because we had similar jobs and I can compare our lifestyles.

I think you’re downplaying the criticality of your incredibly high salaries here. You were able to save only because you earned so much. $200K/yr in your 20s?? I worked very hard in academia and was very frugal because I earned under $200K during that WHOLE DECADE! If I’d had your income I bet I would have saved more than you did.

[Anonymous]

I live in Mclean, and eye-balling Mclean and NW DC I see maybe 50 houses for sale above $5M. And half of those are $15M+ which is kind of a different level (government buyers, etc).

Around me, a good number of the more expensive houses go to pro athletes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Own 2 homes, combined worth about $5.5M. How did we get there? Living below our means for many years, bought first home as one we could afford on only 1 salary (either of ours), and continued to save for retirement and life. Did not upgrade that home for 7+ years, until we relocated. Then bought a home for 50% of what "we could have".
Had that $500K+ home fully paid off by time we were 40.
But made the jump to $5M+ once we were able to cash in stock options. But without that we would still be at the $2M+ as affordable to us. Thru savings and living below our means and having a good salary to start with.

How much is that though?

Salary of $300-400K, with bonus possible up to 100% of salary (which typically is only 50% on average).

Key was in our 20s, we made 200K combined, and chose to buy a home of only $200K. Then we worked to save as much as possible. Soon after the combined salary went to $275K. We didn't take over the top fancy vacations, we drove a Nissan Sentra and a Honda Civic for 10+ years, when we could have easily afforded something newer, larger and much nicer.
So while that alone didn't get us to $5M homes, it was a strong start.
We also didn't have a dining room set or living room furniture in that $200K home (4 bed/2.5 bath typical family home). We didn't see the need to spend $4-5K to furnish those rooms that would hardly be used. so it was a mindset of not wasting $$$ and living comfortably but well below what you could easily afford.

Whereas, everyone else I knew bought a house based on both salaries (not 1) and then had to furnish it all with new stuff in first 3-4 months. They drove newer/bigger cars and everything else so many do to "keep up with the joneses".

So the answer is you earned a lot of money very young, that makes sense! Nothing to do with keeping up with the joneses really, more like living normally on a HUGE salary.

Yes, we had good salaries. But a large part of the key is we DID NOT spend everything we made. We SAVED and invested. Just stated that we had similar friends who did spend and save very little in their 20s and early 30s. I know because we had similar jobs and I can compare our lifestyles.

I think you’re downplaying the criticality of your incredibly high salaries here. You were able to save only because you earned so much. $200K/yr in your 20s?? I worked very hard in academia and was very frugal because I earned under $200K during that WHOLE DECADE! If I’d had your income I bet I would have saved more than you did.

High salaries are how you buy a 5 million dollar house. That or family money, stock awards, lucky investments etc. Not earning $300k and saving.

Almost every wealthy person I know got there with family money, starting a business or large stock awards for a decade+.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Own 2 homes, combined worth about $5.5M. How did we get there? Living below our means for many years, bought first home as one we could afford on only 1 salary (either of ours), and continued to save for retirement and life. Did not upgrade that home for 7+ years, until we relocated. Then bought a home for 50% of what "we could have".
Had that $500K+ home fully paid off by time we were 40.
But made the jump to $5M+ once we were able to cash in stock options. But without that we would still be at the $2M+ as affordable to us. Thru savings and living below our means and having a good salary to start with.

How much is that though?

Salary of $300-400K, with bonus possible up to 100% of salary (which typically is only 50% on average).

Key was in our 20s, we made 200K combined, and chose to buy a home of only $200K. Then we worked to save as much as possible. Soon after the combined salary went to $275K. We didn't take over the top fancy vacations, we drove a Nissan Sentra and a Honda Civic for 10+ years, when we could have easily afforded something newer, larger and much nicer.
So while that alone didn't get us to $5M homes, it was a strong start.
We also didn't have a dining room set or living room furniture in that $200K home (4 bed/2.5 bath typical family home). We didn't see the need to spend $4-5K to furnish those rooms that would hardly be used. so it was a mindset of not wasting $$$ and living comfortably but well below what you could easily afford.

Whereas, everyone else I knew bought a house based on both salaries (not 1) and then had to furnish it all with new stuff in first 3-4 months. They drove newer/bigger cars and everything else so many do to "keep up with the joneses".

So the answer is you earned a lot of money very young, that makes sense! Nothing to do with keeping up with the joneses really, more like living normally on a HUGE salary.

Yes, we had good salaries. But a large part of the key is we DID NOT spend everything we made. We SAVED and invested. Just stated that we had similar friends who did spend and save very little in their 20s and early 30s. I know because we had similar jobs and I can compare our lifestyles.

I think you’re downplaying the criticality of your incredibly high salaries here. You were able to save only because you earned so much. $200K/yr in your 20s?? I worked very hard in academia and was very frugal because I earned under $200K during that WHOLE DECADE! If I’d had your income I bet I would have saved more than you did.

Good for you! We also paid off $75K in student loans, between the both of us. So we did live quite frugally for 2 years to accomplish that. Yes, we were in Tech (CS/Engineering) and had good jobs. Obviously we could have "saved more" but we did not need to in order to accomplish our goals in life.

[Anonymous]

Those shows are fake - I have learned from people who have been on them.

[Anonymous]

Anonymous wrote:I love watching realtor shows like Million Dollar Listings, and it's mind blowing to me how so many people can afford those homes. If you can afford that, how did you get there?

Accumulate (earn, extract, or inherit) $1M for down payment and reserve $250K/yr of income or cap gains for mortgage and maintenance. Numbers vary by interest rate.

Anyone with $5M net worth can afford a $5M home.

/thread

[Anonymous]

Anonymous wrote:I love watching realtor shows like Million Dollar Listings, and it's mind blowing to me how so many people can afford those homes. If you can afford that, how did you get there?

The US has 100 million households. How many homes are on Million Dollar Listing?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Own 2 homes, combined worth about $5.5M. How did we get there? Living below our means for many years, bought first home as one we could afford on only 1 salary (either of ours), and continued to save for retirement and life. Did not upgrade that home for 7+ years, until we relocated. Then bought a home for 50% of what "we could have".
Had that $500K+ home fully paid off by time we were 40.
But made the jump to $5M+ once we were able to cash in stock options. But without that we would still be at the $2M+ as affordable to us. Thru savings and living below our means and having a good salary to start with.

How much is that though?

Salary of $300-400K, with bonus possible up to 100% of salary (which typically is only 50% on average).

Key was in our 20s, we made 200K combined, and chose to buy a home of only $200K. Then we worked to save as much as possible. Soon after the combined salary went to $275K. We didn't take over the top fancy vacations, we drove a Nissan Sentra and a Honda Civic for 10+ years, when we could have easily afforded something newer, larger and much nicer.
So while that alone didn't get us to $5M homes, it was a strong start.
We also didn't have a dining room set or living room furniture in that $200K home (4 bed/2.5 bath typical family home). We didn't see the need to spend $4-5K to furnish those rooms that would hardly be used. so it was a mindset of not wasting $$$ and living comfortably but well below what you could easily afford.

Whereas, everyone else I knew bought a house based on both salaries (not 1) and then had to furnish it all with new stuff in first 3-4 months. They drove newer/bigger cars and everything else so many do to "keep up with the joneses".

So the answer is you earned a lot of money very young, that makes sense! Nothing to do with keeping up with the joneses really, more like living normally on a HUGE salary.

Yes, we had good salaries. But a large part of the key is we DID NOT spend everything we made. We SAVED and invested. Just stated that we had similar friends who did spend and save very little in their 20s and early 30s. I know because we had similar jobs and I can compare our lifestyles.

I think you’re downplaying the criticality of your incredibly high salaries here. You were able to save only because you earned so much. $200K/yr in your 20s?? I worked very hard in academia and was very frugal because I earned under $200K during that WHOLE DECADE! If I’d had your income I bet I would have saved more than you did.

Ofcourse it's easier to save/invest when one makes a high salary. I made under $40k the two decades I worked.
I invested some of the money and it just went parabolic. Most people don't seem to know that many stocks did 10x in last decade. Imagine investing since early 2000. Firms need to stop pushing those mutual funds. Those are money makers for them. Make your own fund with ten stocks and rebalance.
I have three stock that did 4x last year. Nothing to do with high income, and now I'm already investing someone else's money. Instead of doing hands on investing and keeping up with the markets, you talk about academia and how much money someone else earns. If I lost if all today, I could do it again in a minute. That's the power of learning and practicing/doing it.
I was a waiter. Dc is a expensive place to live. The minute I got my work permit, which took ten years, hence my low salary, I invested myself into freedom.
Go back and look at the stock movements and even some funds. Where in the world did you invest?
I do hold stocks that can go up and down up to 20% a day, but that's a good thing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I love watching realtor shows like Million Dollar Listings, and it's mind blowing to me how so many people can afford those homes. If you can afford that, how did you get there?

Where do you get the idea that "so many people" can afford a $5 million home? Perhaps not even 0.1% of the population can.

Probably around the top 2-3% of households in the US.

https://www.bankrate.com/investing/income-wealth-top-1-percent/

According to this article, I’m in the top 3% (approximately), and there is no way I can afford a 5M home.

In our area, lots of foreign governments and well connected people with 1%er incomes (think headliner names in business, tech, lobbyist CEOs, etc.) own these homes. Some older white shoe law firm partners. Drive through the neighborhoods once in a while and you’ll see what I mean.

[Anonymous]

And yes, I live below my means and invest like crazy. I understand how well the stock market has done generally over the last 20 years, not 40.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I love watching realtor shows like Million Dollar Listings, and it's mind blowing to me how so many people can afford those homes. If you can afford that, how did you get there?

Accumulate (earn, extract, or inherit) $1M for down payment and reserve $250K/yr of income or cap gains for mortgage and maintenance. Numbers vary by interest rate.

Anyone with $5M net worth can afford a $5M home.

/thread

🤣

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Own 2 homes, combined worth about $5.5M. How did we get there? Living below our means for many years, bought first home as one we could afford on only 1 salary (either of ours), and continued to save for retirement and life. Did not upgrade that home for 7+ years, until we relocated. Then bought a home for 50% of what "we could have".
Had that $500K+ home fully paid off by time we were 40.
But made the jump to $5M+ once we were able to cash in stock options. But without that we would still be at the $2M+ as affordable to us. Thru savings and living below our means and having a good salary to start with.

How much is that though?

Salary of $300-400K, with bonus possible up to 100% of salary (which typically is only 50% on average).

Key was in our 20s, we made 200K combined, and chose to buy a home of only $200K. Then we worked to save as much as possible. Soon after the combined salary went to $275K. We didn't take over the top fancy vacations, we drove a Nissan Sentra and a Honda Civic for 10+ years, when we could have easily afforded something newer, larger and much nicer.
So while that alone didn't get us to $5M homes, it was a strong start.
We also didn't have a dining room set or living room furniture in that $200K home (4 bed/2.5 bath typical family home). We didn't see the need to spend $4-5K to furnish those rooms that would hardly be used. so it was a mindset of not wasting $$$ and living comfortably but well below what you could easily afford.

Whereas, everyone else I knew bought a house based on both salaries (not 1) and then had to furnish it all with new stuff in first 3-4 months. They drove newer/bigger cars and everything else so many do to "keep up with the joneses".

So the answer is you earned a lot of money very young, that makes sense! Nothing to do with keeping up with the joneses really, more like living normally on a HUGE salary.

Yes, we had good salaries. But a large part of the key is we DID NOT spend everything we made. We SAVED and invested. Just stated that we had similar friends who did spend and save very little in their 20s and early 30s. I know because we had similar jobs and I can compare our lifestyles.

I think you’re downplaying the criticality of your incredibly high salaries here. You were able to save only because you earned so much. $200K/yr in your 20s?? I worked very hard in academia and was very frugal because I earned under $200K during that WHOLE DECADE! If I’d had your income I bet I would have saved more than you did.

High salaries are how you buy a 5 million dollar house. That or family money, stock awards, lucky investments etc. Not earning $300k and saving.

Almost every wealthy person I know got there with family money, starting a business or large stock awards for a decade+.

Ding ding ding! Winner!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Own 2 homes, combined worth about $5.5M. How did we get there? Living below our means for many years, bought first home as one we could afford on only 1 salary (either of ours), and continued to save for retirement and life. Did not upgrade that home for 7+ years, until we relocated. Then bought a home for 50% of what "we could have".
Had that $500K+ home fully paid off by time we were 40.
But made the jump to $5M+ once we were able to cash in stock options. But without that we would still be at the $2M+ as affordable to us. Thru savings and living below our means and having a good salary to start with.

How much is that though?

Salary of $300-400K, with bonus possible up to 100% of salary (which typically is only 50% on average).

Key was in our 20s, we made 200K combined, and chose to buy a home of only $200K. Then we worked to save as much as possible. Soon after the combined salary went to $275K. We didn't take over the top fancy vacations, we drove a Nissan Sentra and a Honda Civic for 10+ years, when we could have easily afforded something newer, larger and much nicer.
So while that alone didn't get us to $5M homes, it was a strong start.
We also didn't have a dining room set or living room furniture in that $200K home (4 bed/2.5 bath typical family home). We didn't see the need to spend $4-5K to furnish those rooms that would hardly be used. so it was a mindset of not wasting $$$ and living comfortably but well below what you could easily afford.

Whereas, everyone else I knew bought a house based on both salaries (not 1) and then had to furnish it all with new stuff in first 3-4 months. They drove newer/bigger cars and everything else so many do to "keep up with the joneses".

So the answer is you earned a lot of money very young, that makes sense! Nothing to do with keeping up with the joneses really, more like living normally on a HUGE salary.

Yes, we had good salaries. But a large part of the key is we DID NOT spend everything we made. We SAVED and invested. Just stated that we had similar friends who did spend and save very little in their 20s and early 30s. I know because we had similar jobs and I can compare our lifestyles.

I think you’re downplaying the criticality of your incredibly high salaries here. You were able to save only because you earned so much. $200K/yr in your 20s?? I worked very hard in academia and was very frugal because I earned under $200K during that WHOLE DECADE! If I’d had your income I bet I would have saved more than you did.

Ofcourse it's easier to save/invest when one makes a high salary. I made under $40k the two decades I worked.
I invested some of the money and it just went parabolic. Most people don't seem to know that many stocks did 10x in last decade. Imagine investing since early 2000. Firms need to stop pushing those mutual funds. Those are money makers for them. Make your own fund with ten stocks and rebalance.
I have three stock that did 4x last year. Nothing to do with high income, and now I'm already investing someone else's money. Instead of doing hands on investing and keeping up with the markets, you talk about academia and how much money someone else earns. If I lost if all today, I could do it again in a minute. That's the power of learning and practicing/doing it.
I was a waiter. Dc is a expensive place to live. The minute I got my work permit, which took ten years, hence my low salary, I invested myself into freedom.
Go back and look at the stock movements and even some funds. Where in the world did you invest?
I do hold stocks that can go up and down up to 20% a day, but that's a good thing.

Striking gold with stocks is definitely a great way to wealth, but most people do not have the ability to pick individual stocks well enough to do this. Mutual funds are more reliable for most.

[Anonymous]

Anonymous wrote:Those shows are fake - I have learned from people who have been on them.

Tell me more!!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Own 2 homes, combined worth about $5.5M. How did we get there? Living below our means for many years, bought first home as one we could afford on only 1 salary (either of ours), and continued to save for retirement and life. Did not upgrade that home for 7+ years, until we relocated. Then bought a home for 50% of what "we could have".
Had that $500K+ home fully paid off by time we were 40.
But made the jump to $5M+ once we were able to cash in stock options. But without that we would still be at the $2M+ as affordable to us. Thru savings and living below our means and having a good salary to start with.

How much is that though?

Salary of $300-400K, with bonus possible up to 100% of salary (which typically is only 50% on average).

Key was in our 20s, we made 200K combined, and chose to buy a home of only $200K. Then we worked to save as much as possible. Soon after the combined salary went to $275K. We didn't take over the top fancy vacations, we drove a Nissan Sentra and a Honda Civic for 10+ years, when we could have easily afforded something newer, larger and much nicer.
So while that alone didn't get us to $5M homes, it was a strong start.
We also didn't have a dining room set or living room furniture in that $200K home (4 bed/2.5 bath typical family home). We didn't see the need to spend $4-5K to furnish those rooms that would hardly be used. so it was a mindset of not wasting $$$ and living comfortably but well below what you could easily afford.

Whereas, everyone else I knew bought a house based on both salaries (not 1) and then had to furnish it all with new stuff in first 3-4 months. They drove newer/bigger cars and everything else so many do to "keep up with the joneses".

So the answer is you earned a lot of money very young, that makes sense! Nothing to do with keeping up with the joneses really, more like living normally on a HUGE salary.

Yes, we had good salaries. But a large part of the key is we DID NOT spend everything we made. We SAVED and invested. Just stated that we had similar friends who did spend and save very little in their 20s and early 30s. I know because we had similar jobs and I can compare our lifestyles.

I think you’re downplaying the criticality of your incredibly high salaries here. You were able to save only because you earned so much. $200K/yr in your 20s?? I worked very hard in academia and was very frugal because I earned under $200K during that WHOLE DECADE! If I’d had your income I bet I would have saved more than you did.

Ofcourse it's easier to save/invest when one makes a high salary. I made under $40k the two decades I worked.
I invested some of the money and it just went parabolic. Most people don't seem to know that many stocks did 10x in last decade. Imagine investing since early 2000. Firms need to stop pushing those mutual funds. Those are money makers for them. Make your own fund with ten stocks and rebalance.
I have three stock that did 4x last year. Nothing to do with high income, and now I'm already investing someone else's money. Instead of doing hands on investing and keeping up with the markets, you talk about academia and how much money someone else earns. If I lost if all today, I could do it again in a minute. That's the power of learning and practicing/doing it.
I was a waiter. Dc is a expensive place to live. The minute I got my work permit, which took ten years, hence my low salary, I invested myself into freedom.
Go back and look at the stock movements and even some funds. Where in the world did you invest?
I do hold stocks that can go up and down up to 20% a day, but that's a good thing.

Winning the lottery is not a plan. For every stock picker who got lucky like you, there are 100 who lose their investments.