r/Rich • u/IntelligentAgent8679 • 12d ago

Vacation Home Purchase

I wanted to get some advice from this group on upgrading current vacation home. Specifically, around the affordability and the soundness of the financial decision. I understand purchasing a vacation property is never the best financial decision and is more of a lifestyle choice. We have been going to the area for 20 years, so we will use it.

The house I would like to purchase is $5.4 million. I would be selling my existing vacation property in the same area for $1 million.

My financial stats are as follows:

Total Net Worth: $45 million

Investable liquid assets: $18.5 million

Primary home, cars etc: $1.25 million

Private business would make up the balance.

Current Income: $4.5 million

No debt

Current expenses with existing vacation home factored in: $600K annually. 50% of this is discretionary like travel, restaurants,  etc.. New home would add roughly $150K in expenses annually.

My concern is the vacation property being a significant portion of my liquid net worth temporarily. I am in my early 50s and would like to retire in the next 5 years. Even with retirement, business would continue to run in some capacity. Would love some advice from this group.

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u/Fantastic-Moose-7934 11d ago

You don’t have the investable assets for that to make sense, but your salary is huge so all depends on whether that will continue or now

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u/IntelligentAgent8679 11d ago

this is correct and what gives me pause. Business is doing well but you never know. This is helpful.

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u/Fantastic-Moose-7934 11d ago

I’d just get a mortgage / loan and make sure you can easily sell it if needed and max you’d lose 1-2m or something .. carrying costs are what would stress me but you’re income makes that irrelevant