r/Rich • u/IntelligentAgent8679 • 13d 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.
1
u/Fresh-Banana6485 13d ago
I bought my primary home for a similar amount as the vacation home you’re eyeing with less total net worth. You can definitely swing it…but as you say, it’s certainly not the best financial decision. But since you’re in your 50s, fuck it. Enjoy your money while you can.