Rich People’s Driveways
Have you ever traveled to a really different part of town? Maybe one that you’ve never seen before? Maybe it’s a neighborhood with a completely different socioeconomic status.
After joining local “free” groups (like our local Buy Nothing Group), I find this kind of thing happens to me all the time.
Generally speaking, when a free item is offered on these groups, it’s placed on the old owner’s doorstep. The new owner drives over and picks the item up. It’s a simple and efficient way to share with your neighbors.
Being the errand boy gentleman-of-leisure that I am, I have plenty of time during the day to handle these pick-ups. It also means I’m constantly exploring new parts of town and new neighborhoods.
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Questing For Free Lampshades
This week, Mrs. Tako had me heading-out on just such an errand. My quest was a lampshade sitting on a doorstep about a 20 minute drive away.
When I got there, I quickly realized this wasn’t just any run-of-the-mill neighborhood — It was one of those neighborhoods where the really wealthy like to live.
What tipped me off? For me, it’s always the ridiculous circular driveways that stand-out.
Apparently, wealthy people just can’t be bothered to just back out of their driveways. The rich only go forward and never backward!
Basically, every mansion seems to have this kind of ridiculous circular driveway situation:
Another possible theory is that European luxury cars can’t go backwards. Whatever the case, those silly round driveways are a dead giveaway for a upper-class neighborhood.
Note: I believe circular driveway architecture like this actually predates cars — from a time when horses and carriages were used for luxury transportation. If you’ve ever tried to back up a horse and carriage, you’ll know why the driveways were circular.
It’s been said before that people of different economic classes all put their pants on the same way. That may be true, but the upper-class certainly don’t back-out of the driveway on their way to work.
Needless to say, I felt completely out of place.
What? How Much?
Being the wealth-curious sort of person that I am, I just had to go look-up what it might cost to live in this neighborhood — Turns out, anywhere from $1 million to $4 million dollars. The average appraised value is about $2.5 million dollars.
How big is the property tax bill on a house like this? About $28,000 a year. Just for property taxes.
The home sizes ranged from 7,000 to 11,000 square feet, with one particular monstrosity being over 14,000 square feet.
Basically, these were mansions. Huge-assed mansions. Hell, most of the garages in this neighborhood are bigger than my entire house.
Now normally I’m not the kind of person that’s envious of the success of others. Life has been good to me, and I’m really thankful for it… but these homes were just so crazy large I just had to drive around and gawk.
The Luxury of Time
One really startling observation I made during this trip was the number of service trucks parked in the driveways. A huge number of these homes either had gardeners or other contractors doing work in the middle of the day…. probably because the owners were too busy working.
In the old days, wealthy people used servants to maintain a house and its grounds. These days, they just call a contractor.
While I admit these houses are definitely pretty to look at, I would never want to own one.
Why? Time.
If I owned such a house, I seriously doubt I’d have the time to maintain it. I’d probably be working really long hours to afford such a home. Overtime? You bet. Long commutes? Yes. Work on weekends? More than likely.
Time to mow the lawn or fix leaky sinks? Not very likely. Time to do anything but work? Probably not.
Using a contractor to do basic home maintenance would almost be a given. Such a lifestyle would save me the drudgery of mowing my lawn or fixing sinks, but it definitely wouldn’t be a free one.
I’d be chained to that desk job trading my time for money… to afford that excessive large home, maintained by overpaid contractors.
Any of this sound familiar to you?
If it does, it’s because the middle class does the exactly same thing. Just on a smaller scale.
The middle class also tries to buy nice homes (as much as they can afford). They still have the same long commutes and same work long hours to pay for their home. They also hire contractors to do much of their home repair because they lack the time and the skills.
See how similar it is?
The difference between the two rungs on the socioeconomic ladder, is mainly its scale.
I Am Not A Wealthy Person
Seeing this kind of situation is great for my own humility. It’s a good reminder that I am not a wealthy person. Not in the grand scheme of things, despite the fact that we’re worth over 2.5 million these days.
Other well-off personal finance bloggers like Financial Samurai and Retireby40 have recently been asking themselves “Do you feel Rich?”
Well, after visiting this neighborhood I can definitely say “No, I don’t feel rich”. Not even close.
Seeing extreme wealth like this really puts things into perspective. The monthly cash flow alone to pay for a mortgage (and property taxes) on these houses would be more than I ever made while working. I won’t even guess how much a house like that costs to heat.
Houses like this really aren’t about meeting the shelter needs of a family — they’re mostly about displaying wealth. It’s that inefficient use of resources that bugs me the most.
Inefficiency is (for most people) a gigantic wealth killer . From buying too much home, to spending too much on cars, inefficient use of resources is what destroys most people’s chances at a decent net worth.
Most of my life I’ve tried to do the exact opposite — Instead of using resources for pointless displays of wealth, I seek to maximize resource output for the purpose of sustaining life, providing shelter, and growing my net worth.
So far, this plan has worked-out well for me.
Optimizing Wealth
It really doesn’t matter if you’re upper-class, middle-class, or lower-class — optimizing your lifestyle to build wealth follows the exact same patterns.
Ask yourself — How much do you spent? How much gets invested? Where will you invest it? How do you grow your income?
Answering questions like these that can put a person on the road to financial independence. Maybe even on the fast-track to financial independence.
Yes, it’s true that I don’t own a ridiculous mansion or a fancy car. Are those things even important? Not for me.
They’re a gigantic waste of resources to me. My time is far more precious than that. I wanted freedom from work as a way to buy back my time… so I simply optimized my life to earn it.
But I’m not against enjoying life either. My family doesn’t deprive ourselves — We live in a modest home, and drive well-used cars… but we do go on nice vacations and eat a lot of ridiculously good food.
All the while, our net worth just keeps growing.
That, to me is the best part of financial independence — We live a life that makes us happy, and we can’t help but getting wealthier over time. It’s pretty a fantastic life when I think about it.
That’s rich enough for me.
[Image Credit: Flickr]
I am hugely amused by the fact that I grew up in a house out in the sticks with a circular driveway. It was barely a thousand square feet, no garage, but a shed and chicken coup. This circular drive was a two-track with shovels-full of gravel thrown in the low spots where water collected. Perhaps the geometry of one’s driveway is a necessary, but not sufficient condition of being rich.
In your case, I think you must have had a “wealth” of space. 🙂
“Apparently, wealthy people just can’t be bothered to just back out of their driveways. The rich only go forward and never backward!” That’s awesome.
Those kind of houses are impressive to look at, but when reality sets in, it’s definitely an anchor for your money. I would actually hate to have a house like that, specifically for the maintenance and upkeep.
As far as feeling rich goes, I personally think the money only matters to a point. Once the point of financial independence is reached and your time becomes yours and not your boss’s, that’s rich to me.
— Jim
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Think of it as a percentage, and not a dollar figure.
At this income level, someone likely provided a stable home for their family and never needed to worry one second about the cost of upkeep or the $30,000.00 tax bill. That might be 30% of your income, but only .3% of theirs. Now that’s money.
My point is, at this level of income, the cost of paying taxes and upkeep becomes insignificant compared to the freedom to change the world while knowing your family shares in the comforts of prosperity. Whether it is an “inefficient use of resources” or not falls to each of us, and since I don’t have that kind of cash I’ll withhold judgement.
When it comes down its all about your priorities. Some people’s priority is to show off their wealth while others are more about optimizing wealth.
Very true Tawcan!
That $3 Million dollar home actually looks like what you’d imagine a $3 Mill house would look like. Unlike the shitty $3Million bungalow shacks in Toronto.
Whenever I go into neighbourhoods like that, I don’t feel jealous or jaded at all. Because wealthy doesn’t equal happiness. Just look at all the celebrities in rehab. This is because the hedonic treadmill ensures that no matter how much money we get, our brains get used to that new “normal” and then we start looking for the next high (for celebrities, I mean that literally). Research actually shows that the ideal salary is $75,000/year. After that the hedonic treadmill kicks in, and you don’t get any additional happiness. You just get more problems.
And I agree with you on the waste of resources. Our society is too obsessed with “more, more, more” and competing with each other to see who’s better. But in reality, it just creates unnecessary complexity, stress, and harm to the environment.
You’re totally right FIRECracker…it becomes a giant $3 million hedonic treadmill.
Speaking of celebrities, don’t you qualify as one these days?
HA! Yeah right. Blog famous isn’t real famous…
But my Dad now thinks l’m cool and not a completely loser, so that’s something 😛
Gewwwwwww, that’s a whole lotta moolah to drop on a house. Although I do have to admit those houses are gorgeous, of course. I do wonder how much time the owners have to actually enjoy their nice homes, though? I don’t think they’re worth it if you’re sacrificing your time and health to maintain the image of wealth.
Couldn’t have said it better Mrs. PP!
Yowza. That’s crazy cakes. One of the things that came to mind to me was two 90k commissions (buyer/seller) to change owners on that monstrosity.
I am human or cephalopod.
Good work if you can get it, eh?
I’m with you Mr. Tako. We currently live in a roughly $2 million dollar penthouse apartment provided by my company as part of an expat package. While it is nice, it does absolutely nothing to increase the overall happiness level of our family.
If the choice is continuing to work 60 hrs per week for the next 20 years to pay for more than we need or moving back to our modest home in the US, but having the freedom to spend my time as I choose, it is an absolute no-brainer.
I feel very fortunate to have discovered that ostentatious displays of stuff does little to increase my happiness. It certainly seems like I am in the minority compared to most of my colleagues.
Interesting — most people would say $2.5M net worth is wealthy but “feeling” wealthy is another matter, especially compared to the super rich. I have a friend with a gigantic house like the one pictured, and he’s truly wealthy because not only does he have the house, and the cars, he has enough money to enjoy it all without continuing to work. But he does work because … I think he got bored.
Now go to a neighborhood much cheaper than yours and ask the same questions? I feel wealthy making less than 6 figures because in the scope of the world’s income we have it so good.
Yep, there is a trailer park less than a mile from my house. I go past it all the time. You know what I see? A ton of waste. The rich AND the poor both do it, but the scale the wealthy do it on is *completely* different.
Living rurally my neighbor has a circular driveway. Its fairly common in the country where land is cheap.
As for big houses, the thing is a three million dollar house is rediculous in the context of your home but trust me it’s way smaller then many others. The area down the road from my home measures affluence seemingly by the number of elevators in their houses. It makes you wonder what the guy in the townhouse in the ghetto thinks of your house. It all comes down to relatives. If I’m rich like buffet a mansion is chump change. If I’m making 100k a year and buying your 3 m house I prolly need to reevaluate my priorities. Oh and before you point out the fallacy of Warren still living in the same house after making his fortune, I’ll point out to you his house is small to his wealth, but to you or I it’s like the houses in your pictures (6000sq feet). It’s all relative.
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I personally think Warren is a *great* example of a wealthy person that puts his resources to efficient use. Rather than to scale up his home (or own dozens of different homes), he’s kept the same home most of his life.
Yes, he could go buy something much better…but he doesn’t. *THAT* is what I’m talking about.
I’m clearly far to enmeshed in the FIRE life to appreciate a mansion! Once you started listing square footage and bedrooms I started wondering how many housemates I could conceivably have living comfortably and covering my housing costs!
At least one guy/gal would be getting free/reduced rent for being a live-in gardener/pool-boy. Plus converting the garage into another bedroom (or even self contained apartment!). Lets say 10 people because we’ll have some couples and some and room sharing. A $2.5 mil loan, just need to charge them $20k each a month in rent to break even…. totally feasible :p
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We’ve got some family friends that have a place like this – worth around $3m, and they’re nice people with a circular driveway. They actually don’t work, but still have contractors/staff to mow the lawns, tend the gardens and do general maintenance work and cleaning. I guess it comes down to what % of your overall wealth is a place like this, for them it’s little.
On the waste of space issue, they would’ve downsized, as their kids have all moved out, but the market to buy and sell these places isn’t very active, so they took it off the market after a year. They had bought a smaller place already, but then resold the smaller place after all the buyers of their mansion couldn’t put up funding they were comfortable with. I think it’s difficult to see the waste of space if you’re so wealthy. Relative to us, they’re wasteful. Relative to a person in squalor, we’re wasteful, so it’s all relative.
I think you just described a unicorn. For $3million to be an insignificant portion of a person’s net worth (<10%) we're talking $30+ millions. Very very few people fit that bill.
Then you go and mention they're nice people. Unicorns! 😉
Mr. Tako, I think feeling rich is all relative to our focus.
Vacations and food can keep a smile on my face indefinitely! 😉
Nice post! Agree that wealth on the outside might not necessarily translates to happiness and to be honest, “quality of life” is very much subjective as well.
But many people see the outside and get envious, but I rather concentrate on my path to FI and building up my modest portfolio. Yes, I might live slightly more frugally as compared to my counterparts but guess what, I am a lot more contented with life nowadays!
When we lived in Atlanta, I commuted to work through Buckhead, the ultra-pricey Atlanta neighborhood. There were some lovely, but reasonably-sized homes (IMO), some mega-gated mansions, and then, in 2005-2006, a huge slew of truly hideous big tacky houses started to be built (think Taj Mahal meets “Dallas”). Then, the housing crisis hit, and as I drove past every day, and watched more “for sale” signs pop up, more construction just… stop on the tacky mega-mansions.
I think the housing crisis showed us that putting a majority of your assets into real estate was a really, really bad idea for some people.
Very good point Laurie! Real estate can sometimes act like a game of musical chairs in reverse. When the crash hits, the last one holding it loses.
That’s rich enough for me too. We live a comfortable lifestyle and we don’t have to be stressed out too much. Life is good.
Those houses are great! I think rich people should spend some money. Spread it around a little.
There are some really nice houses near my kid’s school. It’s an interesting neighborhood. There are apartments, normal houses, and some really big houses. Those big houses rarely have a driveway, though. They must be from those old days when the carriage drops you off.
Oh man, I would not want to do the work of maintaining any of those buildings. So many things to dust! I like to have a smaller footprint because I’d rather not spend all of my time cleaning and repairing.
Looking at those photos the only thing I kept thinking was “maaan.. who has time to wash all those windows?” :). Which goes to show exactly where my priorities lie :P. I like our compact home and I love not having to hire people to clean it.
I don’t envy the rich their houses or their cars or their gold chains. What I do envy is their power. The power of implementing an education program out in Africa and raising 100.000 people out of poverty. The power of lobbying a senator to implement equal rights. The power to change the world in a way that suits their values. (Note: those values are no necessarily good for everyone, so you know.. [insert shadowy new world order conspiration theory here])
Most people envy the 1% because they have the money. I envy the 0.001% because they have the power. To misquote Game of Thrones “Knowledge isn’t power. Power is power!”
Ugh my last comment didn’t post.. But it would seem that having a large house is something like a full time job in itself – you have to manage people to do projects and maintenance for example.
I cannot watch Downtown Abbey for that reason – it just seemed to me that it took a lot of effort to be wealthy..So I do not envy the super wealthy at all
I think a large house would make me feel isolated. I like that I know my neighbors and we build community. Plus the wasted resources would be a guilt machine, adding emotional burden to every day. It only takes a few trips to other countries to realize how even average Americans/Canadians are extremely wealthy.
You may like the McMansion Hell website. It provides a funny and informative look at these houses. It seems that many are built very cheaply and don’t last, plus they are not selling. The newly affluent don’t want someone else’s old luxury.
http://www.mcmansionhell.com/
I spent part of my childhood in a house that had a circular driveway. They have their uses. 1) Easy exit for a busy mom who’s in a hurry and doesn’t want to back over something accidentally. (Mom was often driving us to something.)
2) Lots of fun for kids to ride bikes on. (Kids will ride that circular drive endlessly and love it to pieces and won’t have much of a reason to ride elsewhere, thus they stay in safe reach of mom.) There could be as many as 7 kids playing at once.
3) Convenient parking for visiting guests without annoying the neighbors or people trying to drive through. (If the house is on a busy road as ours was instead of in a residential area, a circular drive prevents traffic from being obstructed.)
1& 2 were very frequent in my family, so the driveway was well-used.