To summarize, they are constructed just like smaller houses are. A block from me they tore down a shopping center and put up a development. The houses are 2,000 - 2300 sq ft, so not quite McMansion territory, but they have exactly the characteristics you’ve described, including building in parallel and tiny lots for such relatively big houses.
We toured the models, and not being the slightest bit interested in buying it was fun to find all the tricks the stagers used to make the houses seem bigger. They took a lot of doors off the hinges. The master bed room had a single bed. And the bath room, to get more light in, did not have a curtain on its window - amusing considering it looked down on a liquor store.
Mass produced big house might be a good definition of a McMansion.
How many music, screen, and sports stars hold a degree in finance…or anything for that matter?
There is a tendency at all income levels to increase your spending to match (or exceed) income levels. The additional income allows things that were once luxuries to become a necessity.
For people who feel the need to live in a house that is an overtly grotesque display of nouveau riche wealth (as opposed to simply a large, expensive, but tasteful home), there is a term - being a giant asshole.
At least he got that part right. The last thing you want to buy is the largest house on the block.
You’re still making routine things out to be a big deal.
It’s like if I were to say that I’m surprised you can post to the Straight Dope Message Board.
First, you have to own a computer. Many people don’t have the money for a computer. Even if you have the money, you have to have it all in one place at one time. It does no good if you have $20 under the couch, $40 in your swim trunks, $15 at your uncle’s house, etc. You MUST have all the money together in order to make a large purchase.
To buy a computer, there are a confusing array of options. Just go to Best Buy and you will be overwhelmed by choices. You can probably spend the rest of your life researching the best options… and who wants to make a significant purchase without researching it?
Even if you get the computer home, you need to hook it up to the Internet. For internet service, if you stop paying, they turn the service off. You don’t even know how many people there are who can’t pay monthly bills!
You need to set up a networking capability. Some people go to college for years to learn how to use computers effectively. I suppose you could hire the Geek Squad to come in to set up your computer and network, but that costs money. Plus you’ll need to interview the Geek Squad to make sure that they aren’t going to steal from you when they are in your house.
Etc., etc., etc. I can go on making up reasons why it is a huge task to post anything on the Internet… yet here we are. There might be 100 million homeowners in the United States, so obviously it isn’t as difficult as you make it out to be to get a mortgage and hire a maid. Yes, I still accept that young people can make foolish decisions with money, but it isn’t hard to buy a large house.
Actually, there’s a third way a mortgage can end, which is probably much more common than either of the ways you mentioned. The owner can sell the house, and use the proceeds to pay off the mortgage. Well, maybe that’s a form of your first method, but it doesn’t take as long. One can sell a house only a few years after buying it.
Actually, you basically have this backwards. Boats, cars, and customized jewelry are often/usually depreciating assets. A house generally appreciates in value over time. A house, even one that costs a lot, is usually not a terrible investment, nor is it one where you risk total loss. Look at an extreme example. The (Spelling) Manor was built for $12mm in 1988, and sold for $85mm in 2011. That is an 8.87% annual return if they paid cash. If they were able to leverage that using loans, they would have done even better. Not too bad considering the market for such a house is exceedingly small. Contrast that with a super high end car like a Lamborghini Gallardo Spyder. You can buy a 2007 model with low mileage for 130k that cost 225k brand new. Most cars in that range depreciate even quicker.
So does rent in practice. Think about it. Say you rent out a house you have bought as an investment. What rent do you ask for? Of course, you will typically ask for more than your mortgage payment which will include interest. Thus, a renter is, in essence, paying the mortgage interest, plus taxes, etc. in an ideal scenario.
Most people who own a house don’t think of it that way either. I couldn’t tell you what percentage of principal is left on my mortgages right now because it generally doesn’t matter day to day.
Those people are even more likely to hire someone.
Well, Evander Holyfield gets punched in the face for a living, so much of what he does is not advisable. That said, I do feel sorta bad reading these articles slamming him because they make a lot of unlikely assumptions. First and foremost that he ever had anywhere near the amount of money he “made” from boxing.
Well, two things here. First, the number of homes that can comfortably accommodate several hundred are fairly small, and are mostly owned by wealthy people (read: not your average rapper). Why do people that rich have houses like that? I would guess for three reasons:
What else are you going to do with your money? You can’t take it with you when you go, so you might as well have a super huge house or nice expensive stuff.
If you are that rich, you usually cannot live a normal life because you are famous, rich, vulnerable, etc. Unless you are Warren Buffet, it’s not prudent to live in a normal house near normal people. You might be kidnapped, harassed, or robbed if you are not careful. If you are especially well known, you can’t even go to public places, so you have to have all that stuff in your house (eg. bowling alley, movie theater, etc.)
If you are really rich, your time is worth a lot, and you probably work all the time. Because that is the case, you don’t want to waste time traveling and not doing things you value. That’s why you have a private plane and other things like that. Time matters and anything that saves time and is more convenient is worth it because money means less when you have a lot of it.
Either way I think you are conflating a bunch of different groups here. People who come into a large amount of money who buy ostentatious mc-mansions (eg. rappers, actors), rich working people who buy mansions (eg. I-bankers), rich people who spend a lot on a house (eg. doctors/lawyers in expensive cities), and wealthy people who do any or all of the above.
Your focus seems to be mostly on the first group. It’s pretty easy to see how they go broke. First, many of them are not financially savvy, or well-educated. If you are a basketball player from a poor neighborhood (read: shitty schools), then someone hands you a few million dollars, it’s very easy to forget that that needs to last a long time.
Second, they greatly overestimate their net income after taxes, and the frequency of their paychecks. This is why you most sports labor strikes end soon after the players miss a few paychecks.
Third, the financial impact personal “mistakes” have is exponentially greater for a rich person. Marry the wrong person? Be prepared to give them 50%. Kids? Be prepared to fork over a lot of more money than it actually takes to raise a kid, every month. Did you hit someone in your car? They are going to sue you for millions of dollars.
The most common reason, I think, is that it costs a lot of money to make money as an entertainer in any field. This is a good breakdown. Notice how there are a lot of expenses for things like clothes, transportation, etc. that are mostly about projecting a certain image. Zooey Deschanel, for example, spends 30k+/year on clothes and laundry. And that is a modest amount according to them. If you basically have to spend 30k/year on clothes in order to make $1mm/year, you can see where the money is going. Eventually, when their income inevitably goes down, they are stuck with a lot of those fixed costs, and they don’t adjust. Mostly because it’s hard to adjust when someone else controls when your career is gonna end.
It generally is fairly easy-ish to avoid. That’s why the rich typically stay rich even if they have bad habits similar to poor people. Along those lines, it’s also important to realize that you shouldn’t look at this as just results based. If you are lamenting the types of habits and thinking that result in people losing millions of dollars, you need to consider that plenty of rich people do the same thing; it’s just that they didn’t run out of money (yet). Some of that is prudence, but a lot is just dumb luck.
I think you are overestimating how often these things go badly, and how “bad” the “bad” is. Even when you talk about most of these athletes who go “broke”, they are usually not starving or even truly destitute; they just don’t have the life of a rich and famous person anymore. And honestly, that’s okay given that they are often not famous anymore.
Some of my born-rich classmates (all of them 2nd or 3rd-gen rich) did go through houses just to admire or, preferably, scorn them. They’d scorn at the “run down” house of someone whose family had owned that fortified farm for centuries, or at someone else having to share bedrooms (2 families, one with 4 children, one with 8; 6-car garage… and yeah, the only person not sharing a bedroom was a widowed grandmother. I understand the pazo back in the ancestral homeland was big enough for single bedrooms - but also an impossible to heat up stone pile). Mind you, these were the same ones who had no idea toilet paper didn’t refill itself; one of them went into histerics seeing a salad chef touch salad with his hands :rolleyes: (she’d never seen anybody prepare a meal, not even a sandwich).
One thing you’re not considering is that a lot of celebrities were brutally poor and never had a nice home. A nice house isn’t important to you, but to them it could be their wildest fantasy come true.
I also think you’re underestimating the thrill they get from showing off. Celebrities don’t have parties for their closest friends. They have lavish events planned by professionals. They invite hundreds of industry people, and show off how successful they are.
If you rent and the dishwasher or washing machine breaks, the landlord fixes it and you have no financial obligation to it. If your home dishwasher or washing machine breaks, you’re on the hook for getting it fixed. That’s a leap that some renters-then-buyers have a hard time making mentally.
Yes, but “washing dishes and doing laundry” are still happening. It’s not like clean clothes are things only homeowners wear.
(And not every landlord provides those appliances. I guess a dishwasher, if it exists, is probably pretty likely to be landlord-owned, but there are plenty of apartments and rental houses that just come with washing machine hookups and nothing else.)
What looks grotesque to me, is a huge McMansion oriented to a weird angle to accommodate a Very Weirdly shaped lot. There was one that looked like there was only 10 feet of land around each side of the house.
What’s even “grotesquer” to me is that so many McMansions, from the street, are just gigantic expanses of garage doors. Sometimes, it’s difficult to see what, if any, actual living space occupies the lot.
I suppose it affords privacy, but it’s just so aesthetically displeasing to me when the majority view of the front of a house is driveway and garage. JMO.
What do dishes and the laundry have to do with the house?