Reply to What item could you “afford” but don’t buy?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Same with a beach house. I would love one but we would not go enough and it would just be a pain. [/quote]

Same. A wise financial investor friend told me long ago beach houses were the most regretted purchase of many people whose money she managed. Of course there are exceptions, but many feel [b]either tied to going there for their time off[/b] because of the opportunity cost or frustrated by the continuous list of chores every time they went. For my money, I'll take luxury vacations to different places and have someone else cook, clean, and re-stock toilet paper. [/quote]

[b]It's because at the end of the day, they can't really afford the beach house.[/b]

So much of this discussion I guess is perhaps what an independent 3rd party would say you can afford after looking at your finances vs. psychologically how someone thinks of their money.

I guess I could afford to fly business or first class, but psychologically I don't feel like I can afford it because I would make adjustments to my other spending.

If I won the powerball tomorrow, I would never fly coach again (and definitely look into flying private using NetJets or something equivalent)...would buy a vacation home, etc. and wouldn't change anything about my life as a result of that spending.[/quote]

There are many who can easily pay for the beach house but end up feeling tied to it in a way that they don't like. A friend is a Biglaw partner and his wife is a lobbyist and they have a beach house in Connecticut. They feel like they have to go there for at least a week or two each year. It makes no sense to let it sit empty. But they are extremely busy people and can only get away for certain amounts of time and they have found they wish they could spend the time elsewhere doing other things. But that would mean the beach house sits empty.  Sure, it's 2026 and one can WFH to a certain extent, but you can't do that when you are at trial, need to be attending a lot of events in DC or meeting with clients or whatever. It's not that simple when both parents have very busy jobs.  [/quote]

I believe PP made all of this up. A wise financial planner told PP their clients regret diversifying their investment portfolio with real estate their family can make lifelong memories at, whole exploiting tax loopholes? Total nonsense. Any planner who told someone such a thing was just sweet talking a low net worth pal or prospect.[/quote]

I’m a NP, but I have a family member who is a very successful financial planner, and also happens to have at least three different vacation properties he keeps for his family’s exclusive use, and he counsels people against buying vacation homes they don’t realistically plan to use.

Homes on barrier islands are just not a smart long term investment - the maintenance costs are massive because the salt air just eats through everything, and flooding remains a yearly risk you have to deal with (or pay to deal with). If you only go 1-2 weeks per year you’re better off renting and investing the difference. [/quote]

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