To celebrate the launch of my new book, Millionaire Milestones: Simple Steps To Seven Figures, on May 6, 2025, I thought it’d be fun to explore various millionaire topics leading up to the release.
For most millionaires, owning the nicest house they can afford is a top priority. Given that many of us are still spending more time at home post-pandemic, the intrinsic value of a home has gone up. And for millionaires with kids or a lot of furry friends, a spacious house on a large lot can feel like a necessity.
So in this post, let’s explore a fun question: How much income and net worth do you need to afford a $10 million home?
This topic is particularly interesting to me because I love real estate. When I purchased my current home in Q4 2023, I told myself I’d reached the top of my property ladder and didn’t want to climb higher. But there’s no harm in running the numbers just in case the economy roars back or I get lucky with an investment.
Minimum Income Necessary To Afford a $10 Million Home
When it comes to buying property responsibly, I like to follow my 30/30/3 home buying rule:
Rule #1: Spend no more than 30% of your gross income on your monthly mortgage payment.
If you’re financing the home, make sure the monthly mortgage doesn’t exceed 30% of your gross income. If you’re paying all cash, you should easily fall below this threshold.
Rule #2: Have at least 30% of the home’s value in cash (20% for the down payment, 10% as a buffer).
For a $10 million house, that means:
- $2 million for a 20% down payment
- $1 million as a cash reserve or liquid investments
This buffer is your safety net in case of job loss, an unexpected expense, or a major home repair.
Rule #3: Spend no more than 3–5 times your gross annual income on the purchase price.
Ideally, you’d earn at least $3.33 million a year to buy a $10 million home responsibly. That’s the 3X rule in action. You might stretch it and buy the home on a $2 million income if you have strong income stability and growth potential, but that’s a calculated risk.
Stretching to 5X your income means you’ll likely feel financially tight for at least the first year. If you go this route, here’s how to survive the most dangerous period after buying a home.
Minimum Net Worth Required To Afford a $10 Million House
After owning multiple homes over the past 22 years, I’ve found the sweet spot for your primary residence as a share of your net worth is no more than 30%. Ideally, it’s closer to 20%.
If you’re shopping for a $10 million home, this likely isn’t your first rodeo. You probably already have significant wealth and other investments. In contrast, the average American has over 70% of their net worth tied up in their primary residence.
A $10 million buyer might be:
- A successful entrepreneur
- A senior executive at a financial institution
- A partner at a top law firm
- A celebrity or professional athlete
- A well-connected or corrupt government official who can trade with insider information
If your house represents more than 30% of your net worth, you’re at greater risk of financial stress during downturns, just like what happened during the 2008 Global Financial Crisis. So many lost their homes to foreclosures.
If your primary residence represents less than 10% of your net worth, you may be under-living relative to your financial capacity. That could be a sign to spend a little more on yourself or consider giving more away.
Ideal Net Worth Range
To feel financially secure with a $10 million home purchase:
- Recommended net worth: ~$33 million (30% allocation)
- Ideal net worth: ~$50 million (20% allocation)
With a $50 million net worth, you could comfortably pay cash or take on a smaller mortgage. Even if you take on an $8 million mortgage at 6%, your monthly payment would be about $48,000—easily manageable at this level.
Combining Ideal Income and Net Worth
Here’s a quick reference guide to safely buying a $10 million home:
| Category | Amount |
|---|---|
| Minimum Income | $2 million/year |
| Recommended Income | $3.33 million/year |
| Minimum Net Worth | $5 million (at 50%) |
| Recommended Net Worth | $33.4 million (at 30%) |
| Ideal Net Worth | $50 million (at 20%) |
If you only meet the minimum income requirement, make sure you have at least the recommended net worth. Conversely, if your net worth is on the low end, you’ll want your income to be on the higher side. Here's a more comprehensive chart that highlights more homes at different price points.
Put Down More Than 20% If You Want To Buy A $10 Million House
If you're planning to buy a $10 million home, it's wise to put down more than just 20%. Most people I know buying homes in this price range are putting down 50%+, often paying all cash.
Why? Because many high earners making over $1 million a year don't have high base salaries. Instead, their base is typically in the $250,000–$600,000 range, with the rest coming from stock grants and year-end bonuses. Banks may not fully recognize these forms of income when underwriting large mortgages given they are highly discretionary.
In today’s still-high interest rate environment, all-cash offers are also more attractive to sellers and more practical for buyers. Here’s what a mortgage would look like at 6%:
- $8 million loan = ~$47,000/month
- $7 million loan = ~$42,000/month
- $6 million loan = ~$36,000/month
- $5 million loan = ~$30,000/month
While these payments may be affordable if you're making at least $2 million a year ($166,667/month), sticking to the rule of spending no more than 30% of your gross income on housing suggests a monthly cap of $50,000. That’s cutting it close with an $8 million loan.
The Ongoing Cost To Own A $10 Million Home
Owning a $10 million house doesn’t just mean a big upfront purchase, it means consistently large ongoing costs as well. Property taxes alone can range from $40,000 to over $300,000 a year, depending on your state. Hawaii offers the lowest property tax rates, while states like Illinois, New Jersey, and Texas are among the highest.
Beyond taxes, the cost to maintain a $10 million home adds up fast:
- Higher heating and utility bills
- More expensive homeowner’s insurance
- Increased maintenance and repair costs
- Costly landscaping and cleaning services
- A larger mortgage payment (unless paid in cash)
And let’s not forget furnishing the place. It could cost well over $200,000. The bigger the house, the more expensive it is to make it feel like a cozy home. When something goes wrong—like a roof leak during a “Bomb Cyclone” as I experienced—it becomes much harder (and more expensive) to fix.
When evaluating a $10 million home, don’t just focus on the sticker price. Consider the cost of maintaining a $10 million house every year. Then factor in the opportunity cost of tying up so much capital in a primary residence that’s not generating income.
These ongoing costs are why you must follow my income and net worth guidelines by home price. If you don't, your home could take you under financially.
Related: What’s It Like Living In An $18 Million Mega-Mansion?
$2.5 Million Income Family Budget Owning A $10 Million Home
Here’s a realistic breakdown of a family of four living in a high-cost area, earning $2.5 million a year:
- Home: They put $3 million down on a $10 million dream home, taking out a $7 million mortgage at 6%, which costs them $504,000/year. Add ~$149,000/year for maintenance, taxes, insurance, and landscaping, and the total housing cost is around $653,000/year.
- Kids: Their two children attend private grade school for $130,000/year, plus $5,000 in donations.
- 529 Contributions: They contribute $19,000/year for each child.
- 401(k) Savings: Each parent maxes out their 401(k) at $23,500/year (2025 limit), working toward millionaire status.
Despite the high expenses, they manage to save $373,140/year in their taxable brokerage accounts and have a $1M+ buffer in cash and liquid stocks for emergencies.
But here’s the risk: If one parent loses their job and household income drops by 50%, the family could be in serious trouble. Bear markets don’t just bring down investment portfolios, they also increase the risk of job loss.
Even a $5 million net worth, the absolute minimum I recommend to own a $10 million home, may not be enough. It all depends on how that net worth is structured.
For instance, if $3 million is tied up in home equity and $1.8 million is in illiquid company stock that vests over three years, then having just $200,000 in cash won’t go far given their high burn rate. They should have at least $500,000 in cash. Alternatively, if the $2 million was sitting in a money market fund, they’d be OK for two years before needing to sell their home.
Realistically, to own a $10 million home with minimal financial stress, a net worth closer to $33 million is more appropriate. At that level, you can weather market volatility, job loss, and unforeseen expenses. Even better is a paid off home to shield you from all the chaos and uncertainty. If you can't sleep peacefully at night in your mansion, then what's the point?
Should You Buy a $10 Million Home?
The best time to own the nicest house you can afford is when your kids are still living at home. So, I get why some of you might be browsing $10 million+ listings online. It’s fun to dream, and maybe you're even serious about upgrading.
But even if you earn $2 million or more a year, I’m not convinced it’s worth buying such an expensive property. The upkeep alone can be a major downside, especially if the home wasn’t well built. I know a couple of people who bought $10+ million homes and ended up spending years trying to fix persistent leaks. What a nightmare.
Consistently making over $2 million a year is also no easy feat. You can ride a hot streak for a while, but the economy moves in boom-bust cycles. I saw this firsthand during my banking days, again when small business owners were forced to shut down during COVID, and now with tariffs arresting consumer spending and spiking input costs. One year you're up, the next you’re trying to stay afloat. Your window of opportunity to make big bucks doesn’t last forever. Beware about extrapolating your high earnings with ever-increasing gains!
That’s why I believe you need a net worth of at least $33.3 million before buying a $10 million home. Your net worth is more reliable than your income, but even then, it's not bulletproof. Just look at 2025, when tech stocks dropped more than 20%. If $30 million of your $33.3 million net worth was tied up in the Magnificent 7 companies, you’d be staring at a ~$6 million loss. Ouch.
Another factor: what are you upgrading from? If you're jumping from a one-bedroom apartment to a 6,000-square-foot, six-bedroom mansion because your AI company IPO’d, making you a decamillionaire, that’s probably overkill. But if you’re trading up from a $6 million, 3,900-square-foot home with four bedrooms, the jump may be more reasonable. Further, you’ll have the experience to actually make use of the extra space.
For the sake of adaptability and long-term appreciation, a good rule of thumb is not to upgrade your primary residence by more than 100% in price. Beyond that, the risks and complexities start to outweigh the rewards.
A Better Way To Live In A $10 Million Home
While you’re working on building your income and saving up a down payment for that dream $10 million house, consider a smarter approach: invest in real estate to keep up with the market, without overextending yourself.
You might want to follow my BURL strategy, which stands for Buy Utility, Rent Luxury. The idea is simple: invest in properties that generate high rental income, and rent the luxury lifestyle instead of buying it.
If you follow this strategy, you could generate enough passive income to rent a $10 million home—and still have money left over.
For example, instead of buying a $10 million house at a 3% cap rate, which would generate just $300,000 a year in rental income, you could rent that same house for $300,000 a year. Then, invest the $10 million in higher-yielding multifamily properties at a 7% cap rate, and earn $700,000 a year in passive income.
After covering your rent, you'd still have $400,000 before taxes to spend or reinvest. Plus, your investment properties could appreciate over time, especially if they’re located in fast-growing, more affordable 18-hour cities.
By using the BURL strategy, you’re optimizing your capital and your lifestyle. The problem is, once you have an eight figure net worth, the tenancy is wanting to own everything.
There’s no point in becoming a multi-millionaire if you’re not going to enjoy life more than the average person. There has to be some reward for all your hard work and risk-taking. If a $10 million home is what you want and you can afford it, go for it. Just be mindful of the risks that come with buying a home you definitely don’t need. Best of luck with the new purchase!
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However, before you get to a $10 million net worth, you first have to reach the $1 million milestone. Millionaire Milestones is your roadmap to building the wealth you need to live the life you’ve always dreamed of. Order your copy today on Amazon and take the first step toward the financial future you deserve!
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Maybe it’s different in San Francisco, but I find some of the most expensive neighborhoods a bit soulless. Go for a walk and you’ll see 10 maintenance crews for each neighbor that you run into. Decent homes getting torn down to build bigger. Plus, it can almost be like a full time job maintaining a large house.
I live in a nice house in a nice neighborhood but I have no plans of going bigger.
Very good post and I strongly agree with all points. Unfortunately, I am breaking some of these rules for an expensive home…Lifestyle/kids forcing my hand a bit…
I am in my late 30’s, been working for nearly 2 decades and have only rented… being in a large city for most of that time, the math never remotely made sense to buy. I was able to invest all those excess savings over the last decade and have benefited from this nearly uninterrupted decade plus bull market in equities.
I took an alternative approach recently and bought a teardown in an A+ part of town…location about as good as it gets (non waterfront)….The dirt is quite expensive, but I will have around $200 a foot of equity on day one. I am likely going to spend around $4mish and the house will be worth $5mish…I have done over a year of research and intimately know what my costs will be and what the value of my finished product will be in TODAY’s market. Thing would have to get really bad for me to lose $…not so relevant as I plan on living there etc…It is obviously tempting to build bigger, given the $spread between building costs and market value, but I am already far higher than I ever imagined I would be from an “all in” cost… While I feel extremely blessed to be in a position to do this, I am pushing it…especially given how I have lived the last decade plus…the macro backdrop doesn’t help either.
I have always prioritized saving… I have saved over 6M so far and will use about $1mish and finance the balance of 3Mish… However, my pretax income, while very stable and certain to grow, potentially significantly over time is only in the $700kish range……
While we are not “big ex housing spenders” ($120kish annually) we will certainly not be saving much money.
It seems the time to splurge given the kids are so young. I enjoy what I do for work, don’t have any early retirement/turn down the temp aspirations …it seems I have talked myself into this despite my relatively more modest income due to my net worth…
With 6 million in savings and financing 5 million of it with a 700 K income, you should be fine. But be prepared to feel stressed for at least a year. It will likely be a very nerve-wracking experience.
Remodeling has always been very frustrating for me, which is why I will never do it again. No matter how hard I tried, It always took longer and cost more than budget By at least 30%.
Yes, the best time to own the nicest house you can afford is when you have kids at home! Good luck!
It’s all relative. For years I was preaching and implementing a tightwad gospel that a car shouldn’t cost more than monthly income and a house no more than our annual income. This year, however, I am going to break this rule for one reason only. I am 73 and after decades of 15+% portfolio returns it’s finally time to move more money from stocks to real estate while improving the standard of living at the same time. Still I don’t see why I need to spend 20-30% of NW on this “ideal” multimillion home if in far and relatively safe suburbs of a big Midwestern city there are nice fairly large (7000-8000 sqft) 6-7 bd homes costing around $1 million and smaller ones (4000-6000 sqft) in the $700-800K range. I have an entire portfolio of those ready to tour in the next couple of weeks and make an offer if we find something to our liking. Sure, there are mansions in the $5-10M range available too but 3/4 of the US population lives outside HCOL areas where you could buy and furnish a decent size house under $1 million.
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Thanks for sharing your story — it really highlights how personal and relative these decisions are.
It sounds like you’ve done an amazing job managing your finances over the decades with a very disciplined approach. I completely agree that, after a lifetime of strong portfolio growth, it makes sense to shift some gains into real assets and also enjoy a higher standard of living if it aligns with your goals. You’ve earned it.
I also agree with your point that outside of high-cost areas, you can still find very spacious, beautiful homes for under $1 million — something that often gets overlooked when people talk about real estate prices nationally. It’s smart that you’re sticking to a practical range rather than feeling pressured to overspend just because you can.
At the end of the day, it’s about finding the right balance for your own stage of life and financial situation. Wishing you good luck with the house hunt — sounds like an exciting next chapter!
Sam,
Thank you for another great article. I am trying to get the percentages straight. Of 20% of net worth is ideal for primary residence, and you want to invest in other real estate, what is the recommended overall exposure to real estate?
Hi Brian, no problem. Your net worth asset allocation is really an individual choice. But I wouldn’t go beyond 50% of your net worth in any single asset.
Check out: The Recommended Net Worth Asset Allocation By Age Or Work Experience for more color.
I’ve never looked at buying the nicest home I can afford based on my income and net worth. If that were the case, I should have bought a $2M home, lol. Instead, I’ve bought homes for $200k-$300k.
It’s always been about buying a practical home that allows me to spend more time at home, travel, and vacation often. I don’t like putting that much money into a home and tying it up. I’d rather have the cash to do other things, besides work.
Thus, I have bought homes based on 1x or less my income. I know that may be more difficult in today’s world.
It’s similar to saying someone is making $500k, but they’re happy just living on $100k.
To be able to buy homes for 1X or less your income is great! All my doctor friends have told me about the arbitrage of making more in less populated, less expensive cities. But they all decided to make less living in a more expensive coastal city.
More importantly, if you are happy living in a home that’s 20% of your annual income, more power to you.
For most people, I would say it’s impossible to buy such a home with their salary (given the median household income is $80,000 and the median home price is about $400,000), or they could not be happy.
To each their own. We love small town. Quality of life is 10x better than big city. From personal experience.
Sam, in the above you quote $200k to furnish a $10m home. I think you might have meant $2m, as I’ve heard 20% of purchase price as a decent rule of thumb for furnishing a home. Another angle that might be interesting to think about is the inheritance implications of such an asset.
You can certainly spend $2 million to furnish a $10 million home, but a few people would.
Most people spend far less than 20% of the valley of their home furnishing. Maybe the percentage is closer to 2% of 5% of their homes. It depends on everybody’s taste.
So far I have spent less than 0.2% furnishing my home that I purchased at the end of 2023. I just transferred over all my old furniture and inherited my friends sofa and coffee table. I wanted to live in my home for a while before figuring out what the right furnishing and design was.
I think I could spend at most 2% of my homes value on furnishing. But that’s about it.
What percentage of your home do you spend on furnishing?
I completely agree Sam, no need to go that high if you are laddering up along the property scale. I suppose if I had to start completely from a
Scratch, 20% is probably about right. Of course, my couch would probably look pretty ridiculous in a $10m home. Love what you do, hope I didn’t come across too strong.
Oh, not at all.
Even if you were starting from scratch, I’d say 95% of homeowners would not spend 20% on the value of their home in furniture.
A median home of $400,000 for example… no way would that homeowner spend $80,000 on furnishing. But if they did, that would be some pretty nice stuff! Maybe some original art work or something.
I lived in apartments in small multi-family buildings that I owned in Chicago from 2018 to 2024. We brought home two kids to these smaller apartments and stayed until my oldest was 4. I loved those days and wouldn’t trade them for anything.
That said, I now have three kids and completely agree with FS on this one.
My family of 5 spends so much time at home, mostly because there’s only so much you can do with 3 kids, 5 and under. We also live in the Chicago area, which means we’re stuck indoors for a good bit of the winter. I imagine families living in places that get extremely hot in the summer time know this feeling, as well.
It’s also nice to have space for extended family to come by and help with the kids. In our former apartments, we didn’t have the room to have many visitors comfortably.
Sure, there are days when I think about what else I could do with the money I’m spending on my home. I wouldn’t argue with anyone who wants to spend their money differently. For me, having the space and comfort with young kids is worth it.
Glad you’re loving your home.
We also live in the upper Midwest with more snow and colder than you. We love winters and are out all the time. We enjoy hiking, snowshoeing, skiing, sledding, whatever in the snow. So, it might just be our differences in preference. But it’s just a suggestion to embrace the Winter more. Lol
Oh, btw, could you share which city you live in where you can buy nice homes for $200-$300K? We might reconsider once the kids move out! thanks
Having a nice house hit a diminishing point of return.
If you’re at that level of wealth, it might be worth the money to invest in people. For example, a concierge doctor to make sure your health is in tip top shape. A butler to take care of all the annoying little details of life such as laundry and arranging meetings.
Or you can use the money to buy “meaning”. Invest in projects that you care about and leave the world a better place. It could be funding your local theater, work on affordable housing issues even at the expense of your real estate investments, etc.
Good points and I agree. My friends who have 10+ million dollar homes all have concierge doctors where they pay $50,000-$75,000 a year for.
One guy also has a personal stretcher, which he loaned out to me one day when I told him I was feeling really sore. He just sent his stretcher out to my house who set up her table and started stretching away. It was amazing.
The reality is, these people are doing exactly what you’re saying. They aren’t just owning super nice homes only the top 0.1% afford and just chilling. They are activist in the community and donate regularly as well. It’s pretty cool to see.
Hi Sam – I’ve never heard of concierge doctors. Could you please write a post about all the bespoke services available to the top 0.1%?
Maybe! I’d ask your friends who have net worths above $20 million. I’d be shocked if at least one doesn’t have a concierge doctor.
I was offered concierge doctor services from my existing doctor of 20 years.. as they are also trying to lock down more stable revenue and have fewer, higher-paying patients.
Thanks for another great article, Sam. I love the tables you include. Looking at the household budget needed to afford various priced homes over 1 mil is a great guage and an eye opener. Where I live in the Seattle area, pretty much all houses are 1 mil and up (in a decent area and something I would consider living in). What’s amazing is how many people are buying these 1 mil and up homes with nowhere near the ideal net worth of 5 mil. One of my employees is looking at a 1.2 million first home! How are people making it in high cost cities like Seattle and SF. They must be keeping super tight budgets. I have a much higher net worth than income, due to many rental properties that have appreciated over the years. My home was 1.5 and feels hard to afford as I make less than the minimum required according to the table but net worth is on target. The mortgage is not a problem, it’s the maintenance, utilities and upgrades that really add up.
Thanks for sharing Bryan.
The secret is help from parents. Here in San Francisco, around 30% to 40% of first time homebuyers have down payment help from their parents. It’s really the only way, so I’m assuming a decent percentage of first-time buyers or second time buyers in Seattle are the same way.
I’d expand your categorization of $10m+ homeowners to include people with inherited wealth who are employed but receive substantial family assistance with their purchase, and people with solid but not extraordinary incomes who have strategically traded up in real estate over decades. We have a few of both in the mountain town where I live.
You are exactly right. The amount of wealth help from parents is incredible. I’m not sure how I would feel if my parents bought me a 10+ million dollar home as an adult. I think I would feel embarrassed and never have anybody over because everybody would know that I didn’t earn my own money. Call it foolish pride, I don’t know, but I would rather just save an earn to buy my own house that I can afford.
We have this Bank of mom and dad phenomenon here aggressively in San Francisco. I guess it’s almost just normalized.
The bank of mom and dad phenomenon is so frustrating for those of us who have mostly earned everything. The few I know who ended up in a $10 million house in this situation still work pretty regular jobs – the kind that would afford them a $2 million house without help – and they’ve traded up over the years. So, I guess they get a little credit for making the best of their very nice birthright. We have a pretty expensive home, although it’s not approaching $10 million. We’ve traded up over the years, and while it’s proportional to our net worth, our income only supports it because we made a big down payment. We’ll downsize when our youngest leaves for college. We have some little luxuries that are worth paying up for, like two home offices for us both to work comfortably from home, a playroom for the kids and their friends (and their messes), and proximity to good schools and outdoor activities we love. I look at our home as a financial liability that brings us joy.
Instead of being frustrated, wouldn’t you be happy that the back of mom and dad is helping increase the demand to make your house worth more overtime? That’s the positive way I look at things.
I love my house and I have still yet to sell a house at a loss. To be able to enjoy the profits and enjoy the house and make memories is an amazing combination.
I don’t plan to buy a $10 mil house in my lifetime, but the older I get, the more people I know in my network who do. There aren’t a lot of them, but there still are some nevertheless. And yeah it’s usually not their first home. For one it’s their third, and for another it’s maybe their fifth or sixth I think which is a lot of moving. In any case, they’ve done well in their careers, investments, and they are definitely well diversified. And lucky for me, one of them is quite generous and likes to host a lot of parties.
That’s the interesting thing, isn’t it? The longer we’re around, the more we see what’s actually possible. A $10 million home might seem outrageous at first, but when it’s someone’s 3rd, 5th, or 6th property, it’s usually the result of decades of smart moves, diversification, and yes, a lot of luck too.
Sounds like you’ve got the best kind of access—front-row seats to inspiration and the party! Perhaps the best is actually enjoying a $10+ million vacation home and not having to maintain it.
Then again, if you can afford a $10+ million vacation home, you probably won’t feel the pressure to maintain it much at all!
Another classic deep dive, Sam. It’s wild how the affordability bar for high-end real estate has risen, especially when you layer in the ongoing maintenance, taxes, and opportunity cost. What hit me most was the point about how stealth wealth is often the name of the game for folks buying these homes outright. Also appreciated the breakdown by income source—especially the role of business income and investment returns. Curious to hear your thoughts on how AI-driven productivity might shift the net worth thresholds for these purchases in the next decade.
Appreciate you reading and chiming in! The stealth wealth phenomenon really is fascinating—some of the wealthiest folks I’ve met live well below the radar and often pay cash for everything, including these mega homes.
I was just consulting with a couple folks who make over $1.5 million a year and don’t feel that wealthy. They live in $3-$5 million homes under 3,000 sqft in the Palo Alto area. Meanwhile, their bosses live in $15-20 million homes.
I’m also intrigued by how AI might accelerate wealth generation for a select few, especially those who build or invest early in the right platforms. I’m actually positive AI money will boost San Francisco Bay Area real estate prices significantly.
I say what Facebook and Google going public did to Bay Area real estate in the 2010s… it was crazy. Thousands of people became walking millionaires and multi-millionaires. Then liquidity is coming.