Large house

[Charlie]

In one of his last interviews Munger explained why he didn´t want to live in a very large fancy house:

 

″[Buffett and I] are both smart enough to have watched our friends who got rich build these really fancy houses,” Munger said. “And I would say in practically every case, they make the person less happy, not happier.”

A “basic house” has utility, said Munger, noting that a larger home could help you entertain more people — but that’s about it. “It’s a very expensive thing to do, and it doesn’t do you that much good.”

Another drawback to owning a mega-mansion, he added: Such an ostentatious display of wealth could spoil his kids by encouraging them to “live grandly.” Munger had nine children across two marriages, including two step-sons and a son who died of leukemia at age 9.

″[Buffett and I] both considered bigger and better houses,” Munger said. “I had a huge number of children, so it was justifiable even. And I still decided not to live a life where I look like the Duke of Westchester or something. And I was going to avoid it. I did it on purpose ... I didn’t think it would be good for the children.”

 

Expenses, Envy and Ego goes up and it's not good for the children. 

First you shape/chose your house (environment) and then it shapes you.

The same goes probably for big expensive cars.

I always considered a larger house, but it sounds like a No-Brainer to avoid it. Feeling happy in my mid-sized house. 

 

Anyone with the same observations?

Edited January 14 by Charlie

[Sweet]

He’s definitely right but at what point does a basic house become a large one?

[jouni1]

I think 4700sqft is a large house, but I'm European so what do I know.

[james22]

Guys, just remember, if you get real lucky, if you make a lot of money, if you go out and buy a lot of stuff -- it's gonna break. You got your biggest, fanciest mansion in the world. It has air conditioning. It's got a pool. Just think of all the pumps that are going to go out. Or go to a yacht basin any place in the world. Nobody is smiling, and I'll tell you why: Something broke that morning. The generator's out; the microwave oven doesn't work; the captain's gay; the cook's quit. Things just don't mean happiness.

Ross Perot

[Sweet]

1 hour ago, jouni1 said:

I think 4700sqft is a large house, but I'm European so what do I know.

I think that’s a big house too, but I think it’s a big house anywhere.

 

The best thing about American houses, at least the older ones, is they tend to sit on a good bit of land.

 

My own house, I feel as if I’d like it about 50-100% bigger.  Not to show off but just to have more room.

[Kuhndan]

I live in the same house we bought 36 years ago. I’m couldn’t imagine living any place else. 

[boilermaker75]

30 minutes ago, Kuhndan said:

I live in the same house we bought 36 years ago. I’m couldn’t imagine living any place else. 

 

Same with us. We moved into our current house in 1985! We did make it a little bigger with an addition around 1997.

[ICUMD]

Lots of variables that make a suitable house a home, size only being one of them. Location, quality of construction, proximity to work, crime, upkeep to name a few etc.

 

Generally speaking, larger = more frictional costs of running it = more headaches.

 

For example, have heard that in exclusive neighborhoods, trades people charge a fortune for basic things like painting, just because they can.

 

I was plenty happy just renting back in the day. 

Job allowing, you can rent anywhere in the world. Having a family was main reason for me to buy.

[adesigar]

When buying our house we had a max size of around 2200 sqft. We didn’t see any use for something bigger. Current house is 1700 sqft and very happy with it.
 

A bigger house is just more money to buy, higher property taxes, higher insurance, more to furnish, more to heat/cool more to clean and maintain and we end up with more stuff. 

[longlake95]

I love my 1750 sq. Ft. 
 

go smaller and make it custom. Way more enjoyable. 

[fareastwarriors]

I live in 1,900 square feet.

3 bedrooms, 3 bathrooms, 3 people.

Sometimes it feel too big already. Too much work(lazy) to keep up with cleaning. 

Have everything I need and pretty much most of what I want. Life's good. 

[SharperDingaan]

There's the principal residence (where you live), and the vacation home. For most people, a principal residence of 1,300-1,800 square feet in an accessible location, is more than adequate; thereafter, its primarily lifestyle choice. The privileged, also have vacation homes that are primarily investments (yesterdays fishing shack on remote lakefront, rebuilt into today's mansion with dock/motorboat on a busier lakefront).

 

The issue for many, is inability to separate 'residence' from 'investment'. The reality is that a residence is just shelter; safe, dry, well serviced/maintained, comfortable, and always there whether it be boom or bust. Paying the mortgage off before retirement is just shelter in a different form; ability to afford the house while in retirement, and afford the nursing home when the time comes (house sold to pay the bills). 'Investment' has nothing to do with it. 

 

Of course, nothing prevents housing from also being a rental income investment; a common retirement income practice all around the world. The big difference is that it is typically not your own residence, and while you're living in it; before AirBnB the widow renting rooms out in the family home, was called the 'rooming house' lady. That rental income investment is almost always another property, and those properties could be anywhere, with ownership in many forms.

 

In most neighbourhoods, many a millionaire lives very modestly, and for all appearances is much like any other Joe. The difference is usually just a better neighbourhood, a better car (leased) that is never more than 'X' years old, a better maintained lawn/garden/driveway through summer/winter, and maybe a few more lights outside over festive seasons. Maybe a mansion, and a bigger garage, if multiple generations are living in it. In a better apartment building, maybe you'll just see them getting off at a different floor, or getting in/out of a better car.

 

Different strokes.

 

SD  

 

Edited January 14 by SharperDingaan

[jks327]

Have seen some big ones, and have seen people get tired of maintaining.  To me 2200 sq ft is a good size for one person.

[LC]

Largest I had was 2400 sqft and it was way too big. 3 rooms went totally abandoned.

 

Downsized to 1100 sqft post-divorce and it’s perfect for just me. With a partner I am looking at maybe 15-1600 sqft and that will probably feel roomy!

[mattee2264]

Reminds me of the UK aristocracy. They have huge estates handed down the generations. But with all the upkeep not to mention death taxes they have to keep selling Old Masters just to keep the lights on and eventually hand over the keys to the National Trust. With some exceptions they certainly aren't living the high life as a result of having far too much house.

 

My mum lives in a rich neighbourhood. Rich people buy million dollar houses. Then spend another million knocking them down and rebuilding them and making endless extensions and improvements. So the house is always full of workmen and covered in scaffolding and I do not know how much actual utility they get from it. 

 

I suppose it is "an Englishman's house is his castle" and everyone wants the biggest and fanciest castle. But it is an expensive ego trip.

 

Something I also see is people move out to the suburbs/commuter towns for more "house". Then end up spending lots of time commuting and they miss all the entertainment and culture of a big city. And to go anywhere or do anything even if it is only grocery shopping you need to get in your car. 

 

Another thing is the "holiday house". It is a status symbol. But locks you into going to the same place every year.  And then you have the hassle of renting it out when you aren't there and staying on top of maintenance and so on. And while many see it as a potential retirement home who knows the state of your health when you retire or the kind of lifestyle you want. We are very bad at predicting what our future self wants. 

[james22]

OTOH, you have to spend your money somewhere.

 

Homes can be enjoyed every day.

[Sweet]

2 hours ago, LC said:

Largest I had was 2400 sqft and it was way too big. 3 rooms went totally abandoned.

 

Downsized to 1100 sqft post-divorce and it’s perfect for just me. With a partner I am looking at maybe 15-1600 sqft and that will probably feel roomy!

Get that.  We gave four in ours at 1,700 sq feet.  Think it depends to a large extent how many you’ve got in your house.

[Parsad]

11 hours ago, Sweet said:

He’s definitely right but at what point does a basic house become a large one?

 

Everybody's family is a bit different.  Buy based on your needs and what lets you sleep at night.  

 

Make sure it's relatively comfortable, but a little uncomfortable so that there has to be some sacrifice/compromise/etc by the kids.  In other words, select the ideal size and buy a bit smaller than that. 

 

Cheers!  

[Sweet]

7 minutes ago, Parsad said:

 

Everybody's family is a bit different.  Buy based on your needs and what lets you sleep at night.  

 

Make sure it's relatively comfortable, but a little uncomfortable so that there has to be some sacrifice/compromise/etc by the kids.  In other words, select the ideal size and buy a bit smaller than that. 

 

Cheers!  

We bought for location, which I don’t regret, but the cost of our area is probably 50%-75% higher than comparable houses in other areas.  So the house is a bit smaller than I’d like and so is the site, but it’s probably the right trade off overall - even if I get grumpy during Spring when I cant plant all the crops I want in the garden.

 

Edited January 14 by Sweet

[Eldad]

12 hours ago, james22 said:

Guys, just remember, if you get real lucky, if you make a lot of money, if you go out and buy a lot of stuff -- it's gonna break. You got your biggest, fanciest mansion in the world. It has air conditioning. It's got a pool. Just think of all the pumps that are going to go out. Or go to a yacht basin any place in the world. Nobody is smiling, and I'll tell you why: Something broke that morning. The generator's out; the microwave oven doesn't work; the captain's gay; the cook's quit. Things just don't mean happiness.

Ross Perot

One of the greatest things I have read in a while and 100% true. This is the reason my dad says “just rent everything you can”
 

Low tech, simply things are almost always more dependable and lower stress. Mon Oncle is a good old French movie with this theme. 

[WayWardCloud]

12 hours ago, james22 said:

the captain's gay; the cook's quit.

Wait what ?!

Maybe they ran away together.

[schin]

13 hours ago, james22 said:

Guys, just remember, if you get real lucky, if you make a lot of money, if you go out and buy a lot of stuff -- it's gonna break. You got your biggest, fanciest mansion in the world. It has air conditioning. It's got a pool. Just think of all the pumps that are going to go out. Or go to a yacht basin any place in the world. Nobody is smiling, and I'll tell you why: Something broke that morning. The generator's out; the microwave oven doesn't work; the captain's gay; the cook's quit. Things just don't mean happiness.

Ross Perot

@james22 - I miss Ross Perot. That guy is a character and he often shows up in some crazy places like his meeting with Steve Jobs.

 

I can see a lot of those as problems... "The generator's out; the microwave oven doesn't work; " and then he says "the captain's gay; " LOL.... Is that a problem?

[Eldad]

1 hour ago, schin said:

@james22 - I miss Ross Perot. That guy is a character and he often shows up in some crazy places like his meeting with Steve Jobs.

 

I can see a lot of those as problems... "The generator's out; the microwave oven doesn't work; " and then he says "the captain's gay; " LOL.... Is that a problem?

Haha. It’s the 1990s. It is said as if this information just came to light in some annoying and problematic way.  More unwanted drama in your life. 

[Paarslaars]

Don't need a big house, do like a big yard though... Love lots of room outside and neighbours not too close.

[Gregmal]

I’ve had big and small houses and honestly my favorite place is a 1600 sq/Ft lakehouse because it’s small enough that everyone spends good time together and interacts. Our bigger house the girls are in the movie theatre, my sons doing legos in the living room, wife’s using the home office, I’m doing yard work…it’s cool but just kinda different. And we still only probably use 40% of the home.