Reply to How rich are people buying 1-1.5 mil homes?

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[quote=Anonymous][quote=Anonymous]lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.[/quote]

No, it's a question of wealth distribution. Consider it your asset portfolio. You don't want to put all your eggs in the same basket.  For most people, a house is the most expensive single asset they will ever own, but it doesn't need to represent more than 50% of your total net worth. Now, you can argue that if you buy in a very coveted region, with access to government jobs, wealthy private firms, good public and private schools, your house is a great investment opportunity... sure. Then the conversation switches to making sure your multimillion dollar home that constitutes a large part of your fortune is, indeed, in a highly desirable location. Don't build a large tract of land in the exurbs on which to buy a palace, unless you divine that your great-grandchildren will be able to make a mint because that was THE exurb that is now a desirable suburb :-)

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