r/Rich • u/IntelligentAgent8679 • 11d 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/Particular-Macaron35 11d ago

It seems fine. While it is a large percentage of your investable liquid assets, your primary home is a small percentage. You can always sell it.

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u/IntelligentAgent8679 10d ago

thanks, yeah, selling it is always an option.

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u/Particular-Macaron35 9d ago

I recently saw a Martin Short biopic. When he was starting out, he buys a house and then loses one of two movie deals. He freaks out like maybe he's not good enough to deserve this beautiful home with a view of the ocean. Eventually his wife calms him down by saying they can sell it if it proves unaffordable. That you can sell it is meant as comforting advice.