Serena Williams, Mark Zuckerberg, Warren Buffett and other rich celebrities who live in modest homes
Why do millionaires and billionaires pay so little for their houses? The answer may explain why they are so rich
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 is 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 bought a home that cost more than triple their annual income. Even some high-profile, ultra-rich people – from Mark Zuckerberg to Serena Williams – have bought homes well below their means.
To compile the list below, we compared each person’s net worth with the cost of their homes. We did not 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 a modest home in Omaha, Nebraska, in 1958 for US$31,500. Adjusted for inflation, that’s equivalent to US$274,357 in today’s dollars, or just 0.0003 per cent of his US$82.1 billion net worth.
Everyone on this list owns a home that cost less than five per cent of their net worth.
As of 2017, the home was worth an estimated US$652,619. He called it the “third-best investment” he has ever made.