At 29 years old, I bought a 10,000 square foot mansion.
At first, it was a lot of fun. We watched movies with friends in the home theater, had family members stay with us, played pool volleyball, and threw great parties. Our 70 year old curmudgeon homeowners association president across the street hated us.
A year after buying that house, I wanted to sell it. With two pools, seven air conditioning units, and two acres of yard space, maintenance was expensive. Our property taxes alone were $75,000 per year.
We only used a small portion of the house for ourselves: our bedroom, the kitchen, my office, the gym, the downstairs living room, and the main pool. (We stopped using the movie room because of the hassle of using seven devices to get the projector and sound system running.)
It took two years and a $600,000 loss to sell that house.
It’s Not the Upfront Costs
Three years ago, we bought an 8-week old Bernedoodle for $4,000. Over the next three years, however, we spent over $100,000 on Rex-related costs including the following:
- Food (only the best for Rex)
- Treats (at least $300 per month)
- Dog daycare
- Grooming
- Training (over $10,000)
- Car damage (Rex chewed threw three seatbelts in my SUV)
- Turf for our yard ($30,000)
- Airbnb upgrades
- Upgrading our own homes for Rex’s comfort (and our sanity)
As with getting a puppy, the upfront costs aren’t what hurt when buying an expensive home. Here are some of the direct and indirect costs:
- Mandatory homeowners association and country club dues
- More maintenance (larger pool, larger yard, larger roof, more space to clean)
- Higher monthly utilities
- More expensive parties (you’ll want to hire a cleaning crew)
- More furniture
- Higher property taxes (even if you pay off your house, these never go away)
- A larger garage to fill means more cars and toys to buy
- Fancier neighbors means more temptation to buy more stuff to keep up with them
Don’t Buy a Mansion
For as long as possible, resist the temptation to buy a huge, expensive home. The research I’ve read, like that in the book Happy Money: The Science of Happier Spending by Elizabeth Dunn, backs up my experience: buying bigger homes doesn’t make us happier.
What’s guaranteed to make you less happy is working more to pay for a house, commuting further, being further away from friends and family, feeling less wealthy living next to neighbors with even nicer homes, and taking on too much debt.
Unlike buying a sports car (Lesson 16), the costs to reverse a large home purchase decision are too high to justify the risk.
How Much House to Buy
Buy the least amount of house you can, an extremely subjective and personal target.
If you make good money, have little debt, put away plenty in savings, and take care of your obligations, then buy whatever you want. Spend your money on nice cars, exotic vacations, and nice homes.
Know that buying more cars and bigger homes won’t make you happier. You’re only purchasing temporary pleasure. If you don’t believe me, before your next purchase, write down how happy you think that purchase will make you. Six months after the purchase, review your prediction and compare it with the realized result.
Most people, like me at 29, stretch their budgets as far as possible to buy the maximum house they can afford. You can spot them by looking in their home office windows. You’ll see them grinding away on Tuesday afternoons while they scowl at their semi-retired family members drinking margaritas, floating in their upper level pools.
This post is part of a series inspired by Steven Pressfield’s calling question, “What would you do if you had three months left to live?” I’d share what I’ve learned with those I love and anyone who’d listen. Here are all Lessons.