. . . most of the self-made millionaires I have studied . . . were able to build wealth precisely because they never lived in a home . . . where their domestic overhead made it difficult for them to build wealth. (Stop Acting Rich)
Along these lines consider the ratio of the median household income, $131,000, to the market value of a home, $330,000, owned by those profiled in The Millionaire Next Door. The median ratio is about 2.5 to 1. For those profiled in The Millionaire Mind the median ratio was even lower 1.7 ($749,000 vs. $436,000).
I was reminded of these facts after reading Josh Boak‘s “Affordable Housing: Why Areas with Good Jobs Have Hard-To-Afford Homes”. What’s the meaning of “hard-to-afford homes”? The article cites the Zillow Company’s data: the median value of all homes in the “good jobville” city of San Francisco is $691,000. Thus the price to household income ratio is 7.1. Oh, but what if this ratio is computed using the asking price of homes currently on the market in San Francisco? That’s just over $1M. Then the ratio of price versus income is over 10 to 1!
In contrast, speaking of relocating, congratulations to Mercedes Benz for selecting suburban Atlanta as its new USA headquarters. One can still buy a very nice home here for under one half million. Plus overall the quality of life for middle class folks is vastly superior in Atlanta than it is in the New York metro area where the company is currently headquartered. Remember the fellow telling you this was born and raised in metro Gotham City!
As I wrote in Stop Acting Rich:
. . . the concentration of millionaires . . . in . . . California (and) the northeast areas of the US . . . less than half the expected numbers given (their) overall household populations.
Keep in mind that
. . . where we choose to live often takes the greatest toll on our financial wealth . . . .