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Real estate has long been seen as a safe and lucrative investment, but the financial crisis of 2007 changed that perception. While home prices have steadily risen over the past decade, they are still below their peak, causing many to rethink their approach to real estate ownership.
For the average homeowner, a house is a place of shelter and a foundation for their financial future. But for high net worth individuals, real estate is much more than that. It is a multifaceted investment that can be leveraged to build even greater wealth.
This is evident in the case of a Redditor on r/fatFIRE, who shared his ambitious real estate plans. In his 30s, he already owns $3.5 million worth of property, including a primary residence and a beachfront escape. Now, he is eyeing a 24-acre estate with a custom-built home for $2 million. But he doesn’t want to stop there. He is considering a total overhaul of the property, with a budget of $3 to $4 million.
While this may seem extravagant to some, for someone making nearly $5 million annually with $9 million in cash and investments, it is a calculated move. This individual also owns a successful business, highlighting their strong financial standing.
The question posed to the community was whether this plan was as crazy as it seemed. The answer, in this case, is no. For high net worth individuals, owning millions of dollars in real estate and investing millions more can be a practical financial decision and a wise investment choice.
This highlights the stark difference in perspective between the average homeowner and the wealthy. As F. Scott Fitzgerald famously said, “The rich are different from you and me.” For them, real estate is not just a place to live, but a means to build and preserve wealth. And in a constantly changing market, it is important to have the financial means and perspective to make strategic investments in real estate.