After I left home 10 years ago, my parents decided to build a add-on to our house, and redo the entire kitchen. The add on was not decided on to add to the value of the house — it was purely because my parents wanted more space. They wanted a family room which would be open to the kitchen, making the entire area more open and inviting.
Today my dad told me that during the years he was making the most money, was also the years he lost the most wealth. Why? The $150k add on for the house ended up costing somewhere around $300k (he isn’t really sure how much it cost) and then spending elsewhere also added up. He was making $200k + per year, but losing even more than that.
He constantly talks about how he wants to re-do the other rooms in the house. He has grand plans for remaking the master bedroom to have a walk-in closet that would reduce the space in the room, and breaking down the walls of two bathrooms to make one master bath. I asked him if he thinks that would add to the value of the house and he doesn’t care. He just wants to make it look the way he wants. Even though, with only about a million left in the bank, the value of the house should play into some consideration when making changes.
Not that he cares, or should care — as I’ve mentioned before, he’s sick with terminal cancer, and all he wants to do is spend money on the house — on expensive constructive changes, and less expensive decorative costs that still add up. Meanwhile, my mother, who has no concept of the value of money, is likely going to run out of money some point down the line.
I asked my dad — why didn’t you just move to a larger house, if you were going to spend $300k on the addition? You could have sold this house and moved to a $700k house, which in this area gets you a fairly large house. And it would have been probably worth more later because it would have been a newer construction. Not that I’d want them to sell my childhood home, but still, financially that might have made more sense.
That sort of logic doesn’t matter to them, though. It’s not really any of my business, except for worrying about my mother running out of money later in life, and given that my sister is going into a lower-paying field than I am, I’ll likely be footing that bill. I would, of course, help her out if she needs it — but I’d rather help her make smart financial decisions NOW so it doesn’t have to come to that. It’s too bad neither her or my father would ever take any of my advice on these matters.