Earlier quoted context omitted.
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> not a wealthy man by Hollywood standards
Somewhere there is a mere single-digit billionaire who feels poor next to the double-digit and triple-digit billionaires.
David Lynch LA House
111–120 of 142 posts
Re: David Lynch LA House
#112Earlier quoted context omitted.
Am I crazy or reading the wrong info or are you being hyperbolic when you say California has "insane" income taxes? As an example, the effective rate when making $200k is 25% including federal taxes. That's great. You get to live in a productive and supportive society. The only issue I see is that housing is expensive and $150k, as much as it can support a comfortable lifestyle, would be insufficient to ALSO buy a ho…
The tone around "high taxes" are set by the uber-rich. Hilariously, most of them borrow against their shares to fund their lifestyles (where the interest is tax-deductible!) if they're even still resident in CA. That being said, California is an ungovernable mess where state-constitutional amendments dictate a huge percentage of taxation and spending. It'd otherwise be a great place to live if real estate prices were…
I feel like the Canadian style "just let it happen" approach to crime is a bit of a negative as well
Re: David Lynch LA House
#113Earlier quoted context omitted.
Its pretty easy to understand actually, and all of metropolitan California is the same way- A normal, dual income, middle class working family has an income of ~$250K-$500K (Doctor + teacher, Lawyer and a Doctor, Business exec and Accountant, etc) and they're going to spend upwards of ~40% of their income on their house. thats going to have them spending $6K-$11K. Now they can handle a $1M home no problem. 3 bed 2 ba…
Am I crazy or reading the wrong info or are you being hyperbolic when you say California has "insane" income taxes? As an example, the effective rate when making $200k is 25% including federal taxes. That's great. You get to live in a productive and supportive society. The only issue I see is that housing is expensive and $150k, as much as it can support a comfortable lifestyle, would be insufficient to ALSO buy a ho…
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Re: David Lynch LA House
#114Earlier quoted context omitted.
Yeah but having a 15M house and say 200k income makes you poor, as a 15M house needs a ton of money to maintain it.
If you are paying property tax in LA based on a 15m valuation, that 200k income will struggle to cover the annual property tax bill let alone any maintenance or anything else.
The property tax is calculated based on the last transaction price of the home, so despite it being estimated at $15m today, the owner would be paying tax on a much lower value (assuming they purchased it many years ago).
Re: David Lynch LA House
#115Earlier quoted context omitted.
Yeah but having a 15M house and say 200k income makes you poor, as a 15M house needs a ton of money to maintain it.
Ill trade 5M cash and 200k income for that any day of the week. The first thing I'd do is sell.
>>The first thing I'd do is sell
Me too. And it looks like that’s what the heirs are doing too.
But for David Lynch, I can see why he might want to live amongst the people involved in financing, making, and distributing movies. Similar to how founders move to the expensive Bay area to be near VCs, talent, etc.
Re: David Lynch LA House
#116Re: David Lynch LA House
#117Earlier quoted context omitted.
What people normally mean by wealth is easy access to cash. Someone that owns a $15M house and has very little other liquid assets is not poor, but they definitely don't qualify as wealthy. Many, many people in CA that live in expensive homes are in this situation. It's what Prop 13 wrought. Variously, in my neighborhood, old people are paying a small fraction of the property tax that I do, and their house is worth a…
Wealthy people don't spend their own cash.
Wealthy people do not hoard cash, unlike what many people imagine. Their money is all invested. They also borrow money to invest.
Anyone who gets a mortgage on a house is also investing other peoples' money. Using a credit card is spending other peoples' money. Buying a car on time is spending other peoples' money.
Re: David Lynch LA House
#118Earlier quoted context omitted.
> Someone that owns a $15M house and has very little other liquid assets is not poor, but they definitely don't qualify as wealthy. Assuming they own the house outright, that absolutely does qualify as wealthy.
I didn't say it wouldn't. I said it didn't qualify as ready cash.
You can borrow against the house, and spend the cash.
Re: David Lynch LA House
#119Earlier quoted context omitted.
By that definition, most people are poor. $15 million is much more than most people have. Even split among the four children, it's fine.
He apparently was cash poor and asset rich. Now the opposite is true for his children.
Assets can be easily converted into cash by borrowing against them.
Re: David Lynch LA House
#120Earlier quoted context omitted.
It’s not terribly hard to get into that position, if you spend 40 years of your time and treasure on something with resale value instead of on food and experiences. You can do something similar if you buy a house and keep buying any neighboring house that comes up for sale (and renting them out, perhaps).
Median household income is like $83k. If you were in a median US household and you saved half of all your income every month into something that had a stable 4% return, in 40 years you'd have ~$4M. Not even halfway there. You'd need a little over 9% of stable returns over that 40 year timeframe to hit that $15M target.
The S&P 500 returns average 7% in real dollars (not inflated dollars).
My calculation makes that about $9m over 40 years.