For the past several years,up until this past year,there were houses in my neighborhood going up for sell and selling in a month or so.
The average size around me is in the 2.5-3k sq ft area.Prices in the 400-450k range.
After awhile of watching this,I started asked them why and where they were moving to.Also asked if their homes were paid off or not.
Most of the folks are pretty old (Warren's age) and the kids are grown and gone.
The majority were still paying them off AND buying another here in the same area (DFW) AND getting a bigger house with just the man & wife.
This just didn't make any sense to me.
1. Instead of going towards retirement with little or no debt they are adding to it.They aren't really making in headway.Late 50's and a brand new 30 year debt .
2.Staying in the same area,most all the houses have increased in value at the same percentage.The same rising tide.The reason all of them were selling was because of the great increase in their house value.Not one thought about the same thing has happened to the new house they're buying. DUH !!
3.Bigger house will add even more expense:Electric,gas,insurance,property tax,upkeep.
4. Now they are looking at furnishing a bigger house too.
5. 4-5k sq ft house for 2 people ??
None of them really had any Net Worth !!! Most have a negative Net Worth now.
They do have a lot of flash and bling though.
I did recommend to everyone of them that they ought to read "The Millionare Next Door".
