We’ve all heard of men buying midlife crisis cars to feel more alive. But what about buying a midlife crisis house? Have you ever thought of such an interesting thing?
Let’s say you’re living in a perfectly fine house that fits all your needs. It has the best layout with the right number of bedrooms, right number of bathrooms, an office, and a couple of decks overlooking the ocean. What more could you ask for right?
It turns out, when you’re experiencing a midlife crisis, being content with what you have can sometimes get thrown out the window!
A Midlife Crisis Can Relate To Many Things
Now that I’m firmly middle-aged, I’m trying to be aware of anything I’m doing that’s out of whack. If we’re doing something due to a midlife crisis, we may be trying to compensate for our lack of self-esteem or lack of satisfaction in some part of our life.
Since 40, I’ve been building a mid-life crisis fund to potentially deal with a dip in satisfaction in the future. Here are some things I’ve thought about recently.
Potential midlife crisis examples:
- Am I eating less and exercising more because I want to look sexy for the ladies on the pickleball court? Or am I doing so because I want to feel better and increase my chances of living a longer and healthier life? The reasons may be both. However, if I’m not going through a midlife crisis, the predominant reason should be the latter, especially for my family.
- Am I recording more podcasts to gain more recognition because I don’t feel like I’ve done enough in my life? Or am I recording more simply because I enjoy a new challenge and want to develop an archive of recordings for my kids? If the desire for recognition is more than 50% of the reason, that’s different from being the nobody I’m used to.
- Am I buying a new house that I don’t need to look more important to other parents and friends given I don’t have a job or much status? Or am I buying a new house because I think it will provide for a better lifestyle for my family? If the main reason is the former, then I may be going through a midlife crisis.
Why We Desire A Midlife Crisis House
Some people are creatures of habit. No matter how much money they have, they aren’t willing to move.
Perhaps the most famous example is Warren Buffett still living in the house he bought in 1958 in Omaha, Nebraska. Back then, he paid $31,500, the equivalent of around $350,000 in today’s dollars after inflation.
Sure, the house is 6,570 square feet, considered mansion-sized by some. But it costs nothing compared with his $100+ billion net worth.
Here are some reasons why some of us buy unneeded houses in our 40s and 50s.
1) A fancy car just won’t do it anymore
If we have the ability to buy a midlife crisis house, then we most certainly can afford to buy a midlife crisis car already. We’ve either already purchased our dream car or we just aren’t that into cars.
The irony is, buying a midlife crisis car might ultimately save you a lot more money. Because if you can satisfy the hole you feel inside with a fancy new car, you won’t have to buy an unneeded nicer home.
My aging car
I bought my Range Rover Sport in December 2016, mainly in preparation for the birth of our son in April 2017. We had been driving a Honda Fit on a three-year lease that was coming due and we wanted a larger, safer car for our family. However, if I was going to buy a new used car, I wanted one that I loved.
The Range Rover has been one of my favorite cars since middle school. Since starting work, I’ve purchased almost every car I’ve ever dreamt of owning since I was a kid: MB G500, BMW 635CSi, BMW M3, LR Discovery II. It’s been a fun ride!
Given it’s been seven years since I bought my existing Range Rover, its novelty has worn off. Hence, it’s doing nothing to offset the itch to buy a midlife crisis house. But I still love Moose II all the same.
2) Keeping up with the Joneses
If you have a day job, you’ll witness your coworkers getting paid and promoted. As they get promoted, they’ll buy nicer homes and other luxurious things. You’ll naturally want to keep pace with their success, given you may feel less successful if you don’t.
If you aren’t already surrounded by highly motivated people at work, you may be as a parent during school functions and playdates. As a result, you will also end up comparing your things to the things owned by other parents.
Before meeting anybody, you could have been perfectly happy with your house. However, after meeting other people of your similar age and status with nicer homes, you might begin to question everything!
You might wonder how the heck can these people can afford their house, their car, and the other nice things? The answer is sometimes a lot of debt, which as a FIRE person, you use a lot less than average. Then you might start thinking why someone less deserving have nicer things than you.
Mixing back in with regular society
One of the good things about leaving work in 2012 is no longer being surrounded by type-A, ultra-competitive folks who constantly buy nice things. Not hearing about their purchases helped stop me from craving nicer things.
However, once my son started school, I was injected back into society. I started getting to know other parents who went on cool vacations, drove expensive cars, and bought new houses. As a writer, it was fascinating to observe the “peacocking” that sometimes went on at playdates.
After a parent hosted a party at his modest house one day, I asked myself whether I was proud enough to host poker night at my house in the future. In addition, I wondered whether I should buy a nicer house to impress other parents! Before plugging back into the Matrix, I never thought about these things.
3) The realization that you may die with too much money
One of the best ways to decumulate wealth is to buy an expensive house. Your maintenance and property taxes will shoot up. So will your house payments if you take out a mortgage. But at least you’ll get to enjoy your wealth, unlike with stocks.
As a personal finance enthusiast, you will most likely get richer than the average person because you’re saving and investing more than the average person. Given the power of consistency and compounding, there’s a good chance that a majority of us will die with a lot of money left over.
As a result, one solution is to look for sweet new houses. If you have kids, the best time to own the nicest house you can afford is when you have the most number of heartbeats at home.
A greater focus on decumulation
The investment gains of 2020 and 2021 were unexpected. As a result, I’ve accumulated an “overage” of wealth based on my pro-forma net worth calculations by age.
Given I committed to decumulation starting at age 45 in 2022, I need to proactively spend more money to get back to my baseline financial projections upon death. The 2022 bear market helped. However, the 2023 bull market has “hurt.”
I could buy a new car but I’ve committed to driving my car for at least 10 years until December 2026. Spending more money on food was an interesting experiment for three months. But there’s only so much we can eat. I was sick of most finer foods after three months.
In addition, given I’m enthusiast about sending my kids to community college, I will have excess savings if they go given we super-funded two 529 plans. Therefore, all that’s really left is buying a midlife crisis house.
4) The desire to feel protected
After the pandemic, many of our expectations about safety and independence were shattered. As a result, it was natural for people to want to gain more control of their lives by buying bigger homes. Given we are Kings and Queens of our homes, the larger the home, the more control we regain.
At the extreme, if we buy a home with land as big as the city we live in, our life would revert back to normal. We could essentially do anything we want since we owned everything.
When we lose control, we naturally want to take back control through ownership. A midlife crisis home gives us greater control and protection from unknown dangers.
Bigger house for growing kids
After realizing my home remodel would take way longer than expected in 2020, I decided to buy an already completed, fully remodeled home. Funny enough, our new home is about the same size as our now-remodeled old home. But I wasn’t willing to live in a construction zone for another 2+ years with a baby and toddler.
Life is pretty much back to pre-pandemic normal. But the sense of wanting to feel safe, especially with kids, has not gone away. As a result, I’m looking for homes in even safer neighborhoods with lower traffic. A hidden neighborhood would be ideal!
Having a gated front yard provides me mental relief from the kids running onto the street and getting run over. Living on a hill reduces the number of crimes. It feels good to feel safe. In fact, feeling safe might be priceless.
Wanting Nothing Is A Good Thing
As the recently deceased Sinead O’Connor once said, “I do not want what I haven’t got.”
It’s wonderful to be content with all that we have. At the same time, it also feels wasteful to hoard so much wealth beyond what we need! This is the conundrum many FIRE enthusiasts face.
Minimalism and early retirement go hand in hand. But if you do money too well, you will end up with too much of it. That would be a darn shame.
Instead of buying a midlife crisis house, maybe it would be better to take a trip of a lifetime instead. Or maybe getting a puppy will help solve the loneliness inside. There are plenty of cheaper ways to solve self-esteem issues, including going to therapy every week.
Personally, I highly value living in a nice home. I spend so much time at home writing, podcasting, and taking care of my family, that spending big bucks on a home feels like great value. And the fact that a home could also potentially go up in value makes it an ideal asset.
You might think you’re going through a midlife crisis by buying a nicer home you don’t need. However, if you’re in tune with your emotions, you might be acting perfectly rational after all.
Reader Questions And Suggestions
Do you think there’s such thing as a midlife crisis house? Why do we buy nicer homes we don’t need? Have you or anybody you know bought a midlife crisis house before? If so, how did that work out?
If you’re looking to invest in real estate passively, check out Fundrise. Fundrise manages over $3.3 billion from over 400,000 investors. It predominantly invests in residential and industrial properties in the Sunbelt, where valuations are lower and yields are higher.
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