That’s Not Our Dream House Anymore

The stone mansion dream house of my childhood is not the ideal home for our desired lifestyle. To retire early, we'll need something smarter, not bigger.

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:

  1. The mortgage payments and maintenance costs would gobble up our income and delay our retirement date.
  2. 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.

Not Envious

The stone mansion dream house of my childhood is not the ideal home for our desired lifestyle. To retire early, we'll need something smarter, not bigger.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

24 Responses to That’s Not Our Dream House Anymore

  1. brian503 February 16, 2017 at 8:49 am #

    What’s the old saying, location, location, location. Sounds like your are in a pretty good spot with your neighborhood. I tend to agree with you. I’m much rather have just enough space, so I don’t have to waste time and money on cleaning, and maintaining house space I don’t need. I think sometime people get caught up when relocation from say the Northeast to say the South. With the high cost and taxes in the the NE, you can get more house in the South for the same price, people bite even though they don’t need it.

    • Retire Before Dad February 16, 2017 at 10:28 am #

      DD,
      There’s always more space to buy 🙂 Location could be better. It’s still good, we just compromised some when we bought. I’d love to be able to walk to more stuff. But we do have a nice neighborhood to walk around.
      -RBD

  2. Rich from www.pennyandrich.com February 16, 2017 at 9:18 am #

    RBD — If Mrs. Rich and I bought a home, it would need to be modern, in a prime location, and … expensive! We’d need to get really frugal to save up the downpayment, and stay really frugal to afford the mortgage. Frugal forever. So, knowing that we’d overspend, we’ve made the decision to rent indefinitely.

    I know it’s not financially optimal, but here’s what we get by renting: 1- a very short commute, 2- no debt, 3- no maintenance hassles, 4- amenities (pool, gym, etc.), 5- city neighborhood (walkable), and 5- mobility (we currently live overseas). The trick, of course, is we need to be disciplined with investments because we don’t have the forced savings and growing equity in a house. We also, admittedly, pay a lot every month for renting in a high cost city.

    Question for you and other finance bloggers: is there ever a situation where you’d consider renting instead of owning?

    Great article! –R

    • Retire Before Dad February 16, 2017 at 10:30 am #

      Rich,
      You make some tempting points there. Ya know, we do t really think much about renting in retirement. But that would make some sense if we execute on our plan to travel. So maybe we should think about it more! It fits my goal to not have a mortgage in retirement.
      -RBD

  3. Mr. SSC February 16, 2017 at 9:36 am #

    We ended up in a McMansion when we moved to Texas, similar but probably smaller than the house your friend has. We use all the space, but admit it could be just as functional with 25% less space. We also can’t wait until we move and can downsize. Like you, we’ve learned what we don’t like about the house design (open concept sucks ass for us – too loud) and what we’d want in a different house. Unlike your friend, the smaller houses we had previously been looking at were $100k – $200k higher than our current larger house. So yeah, we got a bigger footprint, but saved ourselves $150k on the mortgage, while still being within 30 min to work.

    We do love that we can walk our kids to school and daycare, and that our neighborhood comes with awesome amenities (2 pools, loads of playgrounds, 2 lakes, lots of paved walking paths and greenspace, and ~6 festivals/celebrations or so per yr) and only a $700/yr fee for that. That has been awesome.

    When we move, we also will most likely rent for a year or maybe 2 before we buy. This is because we will probably go from the Gulf Coast to almost Southern Canada and want to make sure we really do miss the cold that much before locking ourselves in with a property.

    • Retire Before Dad February 16, 2017 at 11:08 am #

      SSC,
      Only in Texas the bigger houses are cheaper than the smaller ones!

      Another person I know has a big house there and says they built the house with huge, cheap windows. So his energy costs are outrageous. They can’t wait to downsize too.
      -RBD

      • Mr. SSC February 16, 2017 at 1:19 pm #

        The windows aren’t bad in our house thank goodness. However, I did have to put UV blocker film on most of the W facing ones and that was amazing in dropping the aparent heat coming in from the sun. I also put solar screens over our 2 Master bathroom windows because it was a greenhouse in there every afternoon. Seriously, it was a good 20-30 degrees hotter than the master BR.

  4. mrfrugalfather February 16, 2017 at 9:50 am #

    Good article! We bought a realistically small house for well under value. I also had dreams of a large house. Always wanted one I’d get lost looking for the bathrio, LOL. I’m glad I got our house we have now cause it will be paid off in 10 years and I will be debt free!!! I told my wife we’ll stay in this house for the rest of our lives if that’s what it takes for me to retire early.

    • Retire Before Dad February 16, 2017 at 11:10 am #

      Paid off and debt-free sound better to me than 6000 sq ft!

  5. brian February 16, 2017 at 11:25 am #

    “At this stage, we’d rather have an imperfect home and lively neighborhood than a perfect home and no nearby playmates for our kids.”

    This is a statement to live by. We live in an upscale neighborhood that doesn’t provide us with anywhere near this level of fun. If given the choice, I’d gladly trade 500 feet of square foot living for a better neighborhood.

    • Retire Before Dad February 16, 2017 at 11:29 am #

      LTM,
      It’s something I’ve learned to appreciate. I didn’t think it would be important when we bought (and it wasn’t as lively then). But there’s constant activity, especially on nice days.
      -RBD

  6. Mali February 16, 2017 at 1:05 pm #

    We just bought a medium sized house to raise our kids in and what I love about it is pretty much all the reasons you mentioned!! I really don’t envy people with huge homes and properties that are really more work than they’re worth!

    • Retire Before Dad February 17, 2017 at 7:45 am #

      Medium sized sounds good to me. That’s about where we are, I guess. I was envious, until I realize the costs of a big house like that. My friend is buying so much furniture that they’ll rarely use. Plus it will anchor them. It’s what they want, but so expensive.

  7. Scott February 16, 2017 at 4:48 pm #

    Enjoy all of your posts, but this one really hits home (pardon the pun.) My wife and I have this conversation at least once a week. Like you, we’re in the VA/MD/DC area and live in a 60’s style house that sounds similar to yours. Have great neighbors and our grade school aged children can walk out the door and have multiple playmate options w/out us having to worry about where they are…which is how most of us grew up.

    The problem is seeing many of these older homes being bought by contractors and throwing up McMansions that cost 2 to 3x what we paid. It leaves us with house envy, but we won’t be thinking much about it while in Jamaica with the kids in a few weeks! Not to mention, just like with anything new, those fancy houses will soon become stale and you’ll likely find yourself wanting to make changes/renovations, thus costing even more $$. I have several friends who can attest to that…and they’re left with a limited travel/entertainment budget due to their inflated mortgage.

    We’ll stick with our older home and maybe do an addition and more renovations down the road as the kids get older….as long as it doesn’t affect our travel budget!

    • Retire Before Dad February 17, 2017 at 7:49 am #

      Scott,
      It’s similar in our nook of NOVA/DC. Any small house on a .50 acre house gets torn down and a huge McMansion is put up. All among the 1960’s era houses. It’s always contractors that design and build the houses, so they are ugly! They never hire a decent architect. Or they buy a plot of land and put up as many big houses as possible, all the same floor plan.

      These houses don’t look so nice from the outside, but the interiors are beautiful. So nice, you can fill them with a ton of crap and become a hoarder extraordinaire!
      -RBD

  8. Roger February 17, 2017 at 12:08 am #

    RBD, lovely website and great info. just seeking some general guidance. so we a couple myself 41, and spouse 35. we were fortunate to secure a foreign assignment in a country that imposes ZERO income tax (middle east). combined we earn $300K (excluding any bonuses- which can bump up total to $320max), we also get $200K tax exemption from US govt:) so taxes are on the balance 100-120K.. assets are $330K house (equity at $120K), both kids (one is 6 & other 6 month old) parked $70K and $50K into 529 plans respectively + no car payments+ 401K (only me) of $260K+ no credit card balance or any other balances+ $200K cash sitting in diff mutual funds…+ if i stay here for another 3 years we could have another $650K cash (post tax). now i dont know what is the best plan forward to use this funds. when we return back to the uSA, i dont intend to work for 6 months.. so i will be 45 then…

    • Retire Before Dad February 17, 2017 at 7:55 am #

      Roger,
      Thanks for stopping by and sharing your situation. You and your wife sound like you have your $hit together. Great incomes, no consumer debt, tax benefits of living abroad, and some support from the US government. I can’t give specific advice because I don’t know your entire situation, but I’ll point you to a post I wrote called the Triforce of Wealth a few weeks ago. If you keep your expenses low, and your income stays strong, you can easily formulate an early retirement by using your surplus to build low-risk income streams (investments, etc). You’re relatively young. So save as much as possible while you’re in this favorable tax situation.
      -RBD

  9. Joe February 17, 2017 at 8:47 am #

    A big old house like that would cost a ton to repair too.
    My dream home would be in Hawaii. I want a few acre and we’ll build a few small structures on the property. Check it out. 🙂
    http://retireby40.org/ultimate-long-term-goal/
    Our current place is a small condo (1,000 sq ft) and we’ll probably move to a bigger place soon. We need a little more room with a kid. Hawaii is still a long way off for us.

    • Retire Before Dad February 17, 2017 at 8:57 am #

      Joe,
      Thanks for sharing your long-term goal. We haven’t quite figured out our ultimate dream house yet. With three kids, we expect we’ll want to stay in the same area for the school years. We still have 17 years of that to go! The idea of moving to world cities during the summers with kids for a few months at a time appeals to us. In retirement too. That would still require a home base and a lot of passive income in retirement. I think we’ll be more city dwellers instead of beach goers. I’ve never been to Hawaii, but it does seem like the ultimate. We’re just too far away.
      -RBD

  10. Jacq February 18, 2017 at 12:18 am #

    Currently my dream home is a tiny house. Maybe not a road worthy one, but something I design for more energy efficiency and a logical lay out. To get reasonable land, I’d probably need to ditch the commute, so remote work, and or FI. I did just buy my current place, as it was cheaper than renting and plan to stick around at least 5 years, while saving up to go tiny. 🙂
    Hawaii is a long flight but so very worth it! Mom used flight miles to get me there which meant a stop in Atlanta but I urge you to experience Hawaii, it’s amazing! ! !

  11. A Frugal Family's Journey February 20, 2017 at 10:02 am #

    Great article. Love and agree with everything you say! I too used to want that big house. We have a decent size house now and sometimes I think it’s too big. Nice neighborhood and good schools are most important to me and my wife. We could care less about the size!

    We are on track to pay off our mortgage and retire in 10 years, and hopefully sooner! Buying a bigger house now only delays that retirement date. Many don’t understand that your biggest wealth builder is your income, and more importantly, what’s left over after all your expenses. The more your expenses, the less you have to save and invest for retirement!

    Thanks for sharing. AFFJ

    • Retire Before Dad February 20, 2017 at 7:19 pm #

      AFFJ,
      Even though we spent somewhat conservatively on our home, I still feel like it’s a burden. That’s why we talk about leaving the area altogether to find somewhere else that is cheaper. But we don’t want to leave, and don’t know of an other place we’d want to move to. So we’re making the best of our current situation by lowering our expenses through refinancing and other variable costs. Thanks for your input, and good luck on your ten year goal!
      -RBD

  12. Chad Carson February 20, 2017 at 12:13 pm #

    This is an awesome article, RBD. I love the analysis and the wise analysis of the balancing of different emotional tugs we all have.

    I think your point about older homes in nicer neighborhoods is right one. I’ve been in real estate for 14 years and looked at plenty of houses. The charming neighborhoods always do more for my quality of life than the big new house out on the edge of town with trees 5 feet tall.

    More and more I’m convinced I can still enjoy all of the appeal of those mansions by renting. AirBnB is so cool because you can stay in amazing places all over the world and act like you live there for a few days or even months at a time. I’ve also heard of people house sitting mansions. I mean – if you’re super rich and have 3-4 houses, chances are you only use the house a few days per year anyway! Crazy.

    I’m going to share the article around. Good stuff!

    • Retire Before Dad February 20, 2017 at 7:21 pm #

      Thanks Chad. It is a tug-o-war. Sometimes I still think we’re aiming for that big house. But then I’m reminded it does align with what we really want to do, which is not work and travel. AirBNB wasn’t around when I was traveling a lot. I do like the idea of spending a month here and there to experience different places in houses like that. As long as they’re not too expensive. Thanks for sharing.
      -RBD

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