My Mom and her sisters used to take me and my cousins on house tours. We’d visit city mansions and historic homes that were preserved for viewing or opened to show off antiques and interior designs.
I loved walking through the old homes. I remember exquisite stone exteriors and unique customizations like hidden doors, secret passages, and secluded play areas that made us kids feel like we were in castles.
McMansions don’t give you that feeling. They’re just big.
As a kid, I always thought I’d be rich someday and live in one of those old mansions. Instead, I ended up broke and living with my parents when was 27 and never formulated a plan to end up in a house like that. I guess it’s never become a priority.
Our Biggest Problem With A Big Old House
We don’t live in a mansion today. Our house is suitable for our family. It’s in a fairly typical near-city suburb. The schools are good and everything we need is close.
Our area does have some ridiculous mansions and much larger homes nearby and I sometimes think it would be cool to own one for the sake of living in a big cool house.
The pragmatist in me thinks otherwise.
Big houses are expensive. Not just for the cost to acquire the property, but to maintain and keep it livable.
In addition to a mortgage, there’s:
- Property taxes
- Heating and air conditioning
- Yard maintenance
- Routine handy jobs
- Cleaning the damn thing
- Gas and electricity
- Furniture to fill the place
Our current house is already expensive enough, and it’s not that big. Plus, we’re responsible for anything that goes wrong with it. We’ve been on a relative lucky streak with no major problems since we’ve lived here (knock on wood). Something expensive will go wrong. It’s inevitable.
And the bigger the house, the more that can go wrong.
But there’s an even bigger deterrent to moving into a more spacious home.
Our primary goal is to retire early and travel. Owning a large and expensive home works against that goal.
It does so in two ways:
- The mortgage payments and maintenance costs would gobble up our income and delay our retirement date.
- Cost burdens would persist when we’re off traveling, leaving less money to travel with.
My retirement number is much lower than my dream house number. So I’ll never become wealthy enough to purchase the dream house of my childhood because when I have enough money to retire, I’ll stop working. I won’t be able to justify working longer for the “privilege” of higher housing costs.
A friend recently bought an old, really nice, and pretty darn big house in an affluent area.
A couple of years ago he told me he had an upper spending limit and didn’t want to spend over it. That amount was high but still sounded reasonable for the area and their economic situation.
He’s a cheap guy by nature and has mostly made good financial decisions. He traveled on a tiny budget and lived cheaply during graduate school.
So I was surprised when he told me that he and his wife paid a few hundred thousand over his original cap. He makes good money and has a solid career. His wife works too.
But this was an expensive house.
After the close, I went for a visit. I worried I’d be envious. Instead, I felt kind of sad for him.
He’s usually a pragmatic kind of guy. When he bought this, he knew what he was getting into and still went ahead with it. He said it was at least a 25-year commitment. He was “all in”. Suburbs, dog, house cleaning, yard maintenance, and maybe a full-time nanny.
While showing me the dual water heaters he sort of joked, what the hell did I just do?
To manage the size of the house, it has two HVAC systems to go with the over-sized pair of water heaters (this is a family of four). Parts of the house can be shut off to the heat and air conditioning because it’s impossible to live in all that space. There’s an entire upper floor for a nanny and a basement perfect for creating a man-cave (at additional expense).
You can’t put IKEA furniture in a house like this. Crate & Barrel, Ethan Allen, Restoration Hardware, mostly. Have you seen the cost of that stuff? Furniture is costing them $15-$20 thousand more, easily!
The only furniture that makes him happy is the leather couch and the 60 inch TV. The monthly cost to operate and maintain this house is at least 3-4 the cost of ours.
They love the house. It’s their dream house.
We love the house. It’s got a beautiful kitchen, flat and spacious backyard, awesome TV room, huge garage, tons of storage space, giant play areas for the kids, and extra bathrooms and guest rooms.
But it’s not our dream house. Not anymore.
Our House Today
In the context of early retirement, a house like that is out of the question. The cost to maintain and operate the thing is too damn high. Let alone the mortgage.
And what do you do with a house and yard like that when you travel for a few months?
Our current house is far from perfect. But all three kids have their own room and our mortgage payment is easily covered by one income (after two refinances).
We’d prefer a flatter yard, colonial style, newer, better outdoor living space, bigger kitchen, double sinks, a garage, and a dedicated guest room.
Buying a McMansion down the way would give us that wish list and more, but cost us twice the value of our home.
Mrs. RBD would have to go back to work full-time to help fortify our cash flow. We’d need to budget for a ton of new furniture. The heating and cooling would waste a ton of energy. We’d be burning money to pay the utility company to burn coal to heat our vacuous home of which 80% isn’t used, instead of using all that money to build income streams and growth our liquid wealth.
If all that isn’t bad enough, we hear that neighborhood down the street is boring.
The Dream Neighborhood
Our house may very well be in a dream neighborhood. Our street has 5-6 events each year to which all neighbors are welcome. There’s a bunch of families with tons of kids of all ages. We have sidewalks, mature trees, and we’re next to a park and a wooded area. The kids can walk or ride a bus to school.
There’s bonfire nights, Mom’s night out, a Superbowl party, Easter Egg hunt, Halloween parade, and July 4th fireworks. We were invited to them all the day we moved in.
If we left today, chances are we’d end up somewhere less charming.
At this stage, we’d rather have an imperfect home and lively neighborhood than a perfect home and no playmates for our kids.
A Smarter Dream House, Not Bigger
When we bought our current home, we estimated we’d stay for 5-10 years. It’s been almost six years and moving at this point makes no sense now that we have kids. We’re comfortable in our community and school district. We’ve made some friends, and the thought of starting over again somewhere else is daunting. The house is plenty big, even with all the toy clutter.
We don’t consider this a forever house. But since we likely aren’t moving in four years, we’re looking ahead to when it’s more likely we will move and positioning our financial lives so that one day when we’re ready, a move is possible.
We’ve eliminated car debt, never to borrow for cars again. This frees up cash flow to save and invest more.
We’re saving aggressively for college now. Each has a 529 account that gets a $300 deposit every month. We’ve never missed a month since the day each was born. Saving for college now will lessen the burden later on, giving us more options when we want to move.
When our tenants move out, we’ll most likely sell our investment property. The $100k+ of cash proceeds will empower us in many ways. Cash = flexibility.
Between now and the day we start looking for a new home, we’ll formulate what our perfect house will look like. Though our timing is unknown due to the kids and school, we know that our next house will be smarter, not bigger.
That’s because living in a 1960’s era house has shined a light on all the inefficiencies and bad design that were popular in those days. We want modern design and better use of space. Everything we need, and nothing we don’t need.
Perhaps we might consider a remodel of our current house someday. Some rearranging of walls could really improve the space. But at what cost? If the cost to remodel or add an addition is too high, we may as well buy something else or build.
Sure, we’ll end up leaving our dream neighborhood. But as the kids get older, we don’t see ourselves as excited about it. We may prefer better access to the city or more privacy somewhere else in the burbs. We’re not sure yet.
But we are sure about one thing. We refuse to let our housing costs dictate our ability to retire early. Buying that exquisite stone mansion, or even a not-so-elaborate dream house around the corner would certainly derail our main objective.
So as we drive past all the big homes and turn our heads in admiration, we make sure to redirect our vision back to what’s important to us. Perhaps one day, the folks living in those ultra-nice houses will look at our dream retirement lifestyle with envy.
Photo Credit: tpsdave via Pixabay