If you had $4M, would you spend $2M of it building a house?

After FIRE we downsized once, and now twice. No way I'd drop 1/2 my savings/investment on a larger home, excluding land already purchased. But do what makes you happy.
 
I'd go with an abundance of toys and little to no hesitation to do any type of travel/experience we may desire rather than spend that amount of money on a house. Most people I know, including my wife and me, spend about 90+% of their time in the main living area. As others have posted though, you've made up you mind and it's good for you so enjoy!
 
I have no input, as I will never be in your financial position. I do have a question, tho.

Building in a mild weather & low natural disaster threat area. What is the driving force for going ICF?

Thanks & I hope you enjoy the process!
 
As others have noted, this comes under the heading of deeply personal decisions. But, since you asked, no, I would not spend 50% of my stash on building a new house. My biggest concerns would be:
  1. Anticipating all of the ongoing costs and how those costs might increase over time (ex. taxes, upkeep, etc.). In general I have found the bigger the house/property, the bigger the ongoing cost. Have seen folks who thought new construction would reduce maintenance and upkeep only to be disappointed in that regard. Big question is how much margin for error would you have with "only" $2M remaining.
  2. How marketable is the home/property? Often custom built is so specific to the owner's tastes and quirks, can be tough to unload. What if you don't like living there after all this (or if your circumstances change such as illness, death of spouse, etc.)?
  3. Overall, how certain are you that $2M provides adequate cushion for all the usual risks of inflation, healthcare, etc.
 
No, I would never imagine spending 1/2 my investable assets on a house. Sounds like you are already committed - curious why you ask. LCOL Tennessee - seems even crazier. Carrying costs, insurance etc., once it’s built?
 
It all depends on your priorities. In my case it would also be a "No"- I have large budgets for travel and donations (including my grandchildren's college funds). As long as the OP has factored in the property taxes, insurance, utilities, etc. that go with a $2 million house and is willing to accept the risk that it may be very hard to sell somewhere down the road, it's a personal decision.
 
Go for it, as this sounds like not just your "forever home" but the center of your life--where you will spend most of your time doing the things that are most dear to you. Tied to a single, large house is not how I want to spend my retirement, and I would need money to do the things I am planning to do. But we're all different.
 
rmcelwee said:
If you have ever eaten a steak you are throwing away money. You could have had a hot dog. Have you never bought anything that was something you wanted instead of needed? I've only been saving money for 40 years for this.
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Very bad analogy.... the cost of a steak will not change my retirement option one bit... a $2 million house will drastically...

BTW, still did not answer the question... what would it sell for in the open market...

But, if you REALLY want it then why even ask here? You said you have been saving 40 years 'for this'... so it is a done deal... Kinda a waste to ask except to see what others have to say... maybe you do not like the answers you are getting..
 
Texas Proud said:
But, if you REALLY want it then why even ask here? You said you have been saving 40 years 'for this'... so it is a done deal... Kinda a waste to ask except to see what others have to say... maybe you do not like the answers you are getting..
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Based on the video he posted in the other thread, he has not broke ground yet so maybe there’s some thought to adjusting the plans.
 
Just to add... the pics you show of the deer etc. can be had with a cheaper option... heck, you already have them so no new house is needed (just having some fun here)
 
My "dream retirement" includes "dream family time", "dream experiences", "dream travel" , and "dream freedom".

It does NOT include a "dream house". Hard for me to understand why anyone would want to spend half their wealth on materialistic stuff in TN.....

Even if it made sense financially (and I don't see how it could) - I'd view it as a prison and ball-and-chain.
 
Short answer: no
Long andwer: no

"dream house" is an oxymoron.

Have a safe, nice enough place to sleep and store all your stuff and junk and things.
 
have moved so many times in my adult life (well, and before) that the idea of a "dream house" is not in my frame of reference. A piece of land with a box. If it meets my needs, that's all I want; nothing more.
 
That's great for all of those that feel that way. It's the beauty of the world. We can pick and choose what's important to us.
My wife and I have lived together in exactly two homes now. She has lived in three counting her parents home so there's a lot of different viewpoints out there.
 
bloom2708 said:
Short answer: no
Long andwer: no

"dream house" is an oxymoron.

Have a safe, nice enough place to sleep and store all your stuff and junk and things.
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heh heh; when I retired I pushed to get a house with no basement and no attic to limit the junk. Semi-successful.:hide:
 
I apologize if this seems harsh but to me this plan seems crazy! You will be so house poor! There will be little money left for cars, travel, life, etc.... Or god forbid severe asset valuation changes!? Also, the cost to build always exceeds budget! Always! We are similar aged and the happiest day of my life was when we sold our $2m house a couple years back... and our net worth is north of $10m. The costs to maintain such a house are excessive. We are in a townhouse now, 1/2 the size and 1/2 the cost, of previous big house, and loving life... but certainly don't feel like our assets are endless even still. I'd move to a smaller house if I could! Having said all that I acknowledge that I put a high value on travel and spend over $100k a year on that but even still I can't imagine spending so much of our net worth on a house.
 
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It is your money so do what you want. But since you are asking what someone else would do then my answer is NO. I don't see the point. I have the resources but I still live in the same 1465sq ft house I bought 40 years ago a couple of blocks from the beach. I am in a great location, with everything I need or want nearby and settled where I want to be I did swing a hammer and build a couple of additions because my wife wanted a sunroom and an informal TV room so the sq footage is a little more now. I guess if a hurricane was to blow this concrete block house into the sea I would rebuild but otherwise NO and certainly no more than 2000 sq ft.
 
It would depend on my income streams, the real estate market, the monthly/annual cost of running the house (tax, utlities, mtce, insurances, etc).

When we retired and were about to downsize I was surprised at a comment by our bank advisor at the time. She said most retirees who sell spend more on their new home than they net from the old one.
 
Delawaredave5 said:
My "dream retirement" includes "dream family time", "dream experiences", "dream travel" , and "dream freedom".

It does NOT include a "dream house". Hard for me to understand why anyone would want to spend half their wealth on materialistic stuff in TN.....

Even if it made sense financially (and I don't see how it could) - I'd view it as a prison and ball-and-chain.
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Indeed. I have dreams of a comfortable, stable domicile... where there is some consonance with neighbors, a feeling of belonging, an affinity for the state/town, amenities, security, comfort... but this is very weakly contingent on the size or construction of the house. The house might end up being expensive, but only because the locale is expensive (which challenges the assertion of "dream"... but self-contradictions get problematic, from both sides).

The salient questions are, (1) what are our dreams, and (2) at what point, do we grant ourselves permission to pursue them? I am beset with dread, of having foolish or intractable dreams - and not just in material matters. Attempting to achieve some dreams, might become worse, than letting them go.
 
Me? I wouldn't do what you're doing. I don't want or need that much square footage. It's not the amount of money, but the size. but as mentioned, you clearly have already made up your mind and it seems to me that you are seeking justification, which you don't need from us.

enjoy the build. I did a major gut reno/roof raise 19 years ago, was nerve racking, stressful and about as much fun as I could have (at the time) with my cloths on. I love it, the adrenalin rush was like nothing before. I wouldn't do it again today however.

And I've got a pretty good view too.

20200525_161933.jpg
 
CaliKid said:
I apologize if this seems harsh but to me this plan seems insane! You will be so house poor! There will be little money left for cars, travel, life, etc.... Or god forbid severe asset valuation changes!? Also, the cost to build always exceeds budget! Always! We are similar aged and the happiest day of my life was when we sold our $2m house a couple years back... and our net worth is north of $10m. The costs to maintain such a house are excessive. We are in a townhouse now, 1/2 the size and 1/2 the cost, of previous big house, and loving life... but certainly don't feel like our assets are endless even still. I'd move to a smaller house if I could! Having said all that I acknowledge that I put a high value on travel and spend over $100k a year on that but even still I can't imagine spending so much of our net worth on a house.
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No need to apologize (unless you are attacking me - some of these posts feel like it). Your plan seems insane to me as well. $100K per year on travel? We do ZERO travelling - what a complete waste of money. Every day is a vacation on our land. Little money left for life? You believe that someone frugal with $2M in a LCOL area could not retire? Severe asset valuation changes? If the market dropped to zero and society collapses you will be in your townhouse fighting for food. I will be sitting in my hot tub in a bullet proof, weather proof, sound proof, bug proof off grid fortress with stores of freeze dried food. High cost to maintain? What extreme cost is there for maintenance on concrete and metal? The LVP floors will be cleaned by robot vacs. Costs to build exceed budget? I believe it will cost $1.4M but I'm rounding up to $2M.

Lots of responses saying "why are you even asking if you have made up your mind". As the very first line of my post stated "it suddenly hit me that we may be spending half our money on it". I wanted to see if anyone had any constructive guidance on this or had done something similar. I thought that was the reason for this forum.
 
No, but then, I've never been a big (expensive) house type person. ~2000sq ft living space is more my speed.
 
We do have the ability but are perfectly happy in our paid off, 1600sf, 3BR/2 bath suburban split level. Last Christmas we visited a retired co-worker in his 7000sf mansion. Not our cup of tea but good luck to the OP.
 
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