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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][b]How much money do you think it is prudent to have in retirement and investments before buying a vacation home (really a condo)?[/b] Some facts - have a $1.5m house here with mortgage around $800k. Rate is low, so no plan to pay this off early, plus we deduct the full amount of the interest payments. With vacation home, we would likely pay cash since we are maxed out on interest tax deduct and it is not a necessity. How much would you want in the bank to feel like this is not a stupid thing to do? We would pay costs associated with house out of cash flow (taxes, condo fees, etc). [/quote]

We are biting the bullet and buying a vacation house, but not without some angst just because it is such an expensive luxury and we are not used to spending like this given our relatively frugal personalities and working class backgrounds. Vacation house is $500K. HHI is almost $2M. About $1.5M saved for retirement, $200K for kids' college, 15-year mortgage on a house worth about $1.2M with PITI about $4K (less than $500K left on mortgage). We have about $800K liquid. [/quote]

Did you just start making that much? Because our savings/investments/college are quite a bit higher and our income is lower. [/quote]

Yes, just a couple of years ago. Also, both of us come from working class backgrounds, so no financial support from family for college tuition, grad school, wedding, or down payment on house. [/quote]  All the more reason, to keep spending in check, pay off your primary residence, shore up retirement and kids college costs now.  Then pay cash for a second home.  If everything is on credit, you have nothing at the end if things go south. [/quote]
We are paying cash.[/quote] But you still have a mortgage on your primary house as well as woefully inadequate retirement and college funds.  Get those on more solid ground before you go for the splurge house. [/quote]

This is totally dependent upon their age. If they are 30 with $1.5m in retirement and $200k in 529s with kids who are 2 and 4, they are in excellent shape. If they are 45 or 50, totally different story. [/quote] I say save in the beginning when you have such a HUGE income.  It may or may not last.  If you spend it all and it goes away- then you will be stuck.  If you get everything stocked, then you can have a much nicer life for your whole life. [/quote]

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