Reply to How do people afford 5 million + homes?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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 [b]good salary[/b] to start with.

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How much is that though?[/quote]

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".

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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.[/quote]

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. 
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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. [/quote]

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+.  [/quote]

In laws are third gen real estate family. They purchased multi million dollar homes for each of their children outright. They paid for us to renovate, update and we made another million on the sale. Now we own a 5m+ home and our story is similar to most of the family friends we know. Family money. [/quote]

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