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A woman who studied 600 millionaires discovered that most of the superrich have surprisingly affordable homes. Here's what some of those look like.
Updated
2020-03-01T16:45:00Z
- The key to building wealth is living in a home you can easily afford, according to Sarah Stanley Fallaw, a researcher who studied more than 600 millionaires.
- She found that most of the millionaires she studied lived in houses that cost below their means, allowing them to save and accumulate more wealth.
- Several well-known millionaires and billionaires, like Warren Buffett and Mark Zuckerberg, live in affordable homes that cost little compared with their overall wealth.
- Visit Business Insider's homepage for more stories.
The key to building wealth? Living in a home you can easily afford.
That's according to Sarah Stanley Fallaw, the director of research for the Affluent Market Institute. She's an author of "The Next Millionaire Next Door: Enduring Strategies for Building Wealth," in which she surveyed more than 600 millionaires in America.
She found that no factor plays as big a role in accumulating money as where you choose to live. Most of the millionaires she studied had never purchased a home that cost more than triple their annual income. Even some high-profile, ultra-rich people — from Mark Zuckerberg to Serena Williams — have purchased homes well below their means.
To compile the list below, we compared each person's net worth with the cost of their homes. We didn't have the data to determine their net worth at the time of purchase, so we adjusted the house purchase price for inflation using an inflation calculator to compare that with their net worth today.
For example, the billionaire investor Warren Buffett bought his home in 1958 for $31,500. Adjusted for inflation, that's equivalent to $274,357 in today's dollars, or just 0.0003% of his $82.1 billion net worth.
Everyone on this list owns a home that cost less than 5% of their net worth.
Sarah Stanley Fallaw, the director of research for the Affluent Market Institute, studied more than 600 millionaires for her book, "The Next Millionaire Next Door: Enduring Strategies for Building Wealth."
Source: "The Next Millionaire Next Door"
If you live in a pricey home in an affluent neighborhood, you're more likely to mirror your neighbor's consumption habits and less likely to accumulate wealth over time.
Source: "The Next Millionaire Next Door"
Consider Warren Buffett, who lives in a modest home in Omaha, Nebraska, that he bought in 1958 for $31,500, or $274,357 in today's dollars.
Source: Business Insider
It's 6,570 square feet, with five bedrooms and 2-1/2 bathrooms.
Source: Business Insider
Meanwhile, Zappos CEO Tony Hsieh lives in a Las Vegas trailer park called "Llamapolis" that he created in 2014 as part of his efforts to revitalize the city.
Source: Business Insider
Llamapolis, which was inspired by the Burning Man festival, is home to 30 Airstream trailers and tiny houses.
Source: Business Insider
The cost of Airstream trailers ranges from $25,900 to $139,900. The most expensive option — $148,750, adjusted for inflation — is just 0.02% of Hsieh's $840 million net worth.
Source: Wired, Washington Post
Mark Zuckerberg lives in a home equal to 0.01% of his wealth. He paid $7 million for a house in Palo Alto in 2011, equivalent to $7.8 million today. While that's not an outright modest number, it is modest for a man worth $71.1 billion.
Source: Forbes, Business Insider
Inside, the house has tons of windows for sunlight ...
Source: Business Insider
... a bathroom with a tub and separate sinks ...
Source: Business Insider
At 7,164 square feet, the house has an open floor plan with plenty of sunshine ...
Source: Business Insider
Meanwhile, over in Beverly Hills is Serena Williams' home that she bought in 2017 for $6.7 million, or $6.9 million in today's dollars, only 3.8% of her reported $180 million net worth.
Source: Business Insider, Celebrity Net Worth
Williams isn't the only sports star living in a relatively affordable home. Shaquille O'Neal's $21.9 million Florida home, which sits on 700 feet of lakefront property in a gated Orlando community, was put on the market in 2018.
Source: Business Insider
He bought the house in 1993 for a little less than $4 million, or $6.9 million in today's dollars. That's 1.7% of his $400 million net worth.
Source: Business Insider, NBC Sports
The entryway features a curved double grand staircase and polished marble floors, leading into the 1,170-square-foot great room.
Source: Business Insider
The master suite has a spacious walk-in closet, a mirrored wall, a gilded ceiling, and expansive views of the lake.
Source: Business Insider
O'Neal's home also has many additional rooms, like a recording studio, a 17-car garage, a cigar bar and lounge, a home theater, and, of course, an indoor basketball court.
Source: Business Insider
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Source: https://www.businessinsider.com/millionaires-billionaires-living-in-affordable-homes-warren-buffett-mark-zuckerberg-2019-2
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