Taylor Swift is currently worth around $360 million and is the owner of 8 homes in the United States. Just how many homes does a person need?
Ok, perhaps she is doing an AirB2B with them or something, I don’t know. But if she just owns them to stay in them temporarily, she is incurring the following expenses:
- Taxes
- Interest unless she bought the homes outright, which is possible
- Maintenance
- Care taking
- Utilities such as electric and gas. She would probably also want internet when she stays there.
Instead of buying a home, she could rent a home or condo where she wants to stay, or even a big hotel room, for less.
Now, on the flip side of the argument, she likely earns appreciation from the homes she owns. But even at best, homes earn around the rate of inflation (i.e. 3-4%). If you are a renter and somebody else is paying the bills, this appreciation is like free money. But if you’re not, this is the only thing on the plus side of the equation.
Now I am picking on Taylor Swift, who likely has more income for the rest of her life than 10,000 people, so maybe blowing this kind of money is no big deal. But for most athletes, actors, and other high income individuals, your shelf life may not carry you forever. Especially if you spend all of your income.
Yes, own a home. But make sure it is a moderate home that meets your needs, not a $10 million mansion. Yes, own a car. But why buy a Bentley when you can have a nice Camry. Showy things attract thieves.
And last but not least… save and invest at least half of your take home income. The three to six months rules goes out the window… Save as quickly as possible for early retirement and make sure you are getting a good return on your investments. Learn to do it yourself, depend on nobody to do it for you.
It will take time to learn to invest properly but it’s worth the time. The time it takes to actually invest and trade will be almost nothing if you focus invest. If you don’t have the time to learn, make sure to invest in a nice index fund like SPY.
More Reading:
- 4 Ways Through Which Athletes Can Create Long-Term Wealth Through Investments – Money Smart Athlete
- Being a Pro Athlete Made Me a Terrible Investor – The Simple Dollar
- A Mini Finance Guide For Indie Musicians – Tune Core
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