Two women sitting behind me on a flight from San Fran to Chicago yesterday. One tells the other she’s thinking about buying a vacation home for $900k. She then explains that while she “only” has $200k in cash on hand, her investment portfolio is currently worth $4.5m. So her “problem” now is to decide whether to borrow the money to buy this “super cute little” place near Tahoe or to liquidate some of her stocks and bonds and pay cash.
Aside from thinking that this is partially why average middle/upper-middle class folks like myself can’t buy a first home right now, I was wondering…if you have $4.5 million in investments, why borrow? Even when rates are %. Shit, sell off a million, buy your cute little vacation home and you still got $3.5m in the bank!
I guess that’s what you call a good problem.