personally, i consider real estate a lousy investment in general. but i'm sure dwight doesn't think the same, and likely views this property as a safe and sound place to park some of his cash -- safer than the alternative investments throwing off 8% even. in fact, when you consider that the actual taxes/upkeep/staffing/insurance for a 20mill house typically run several hundred thousand a year, it's clear that he's really not too worried about losing a few percent of potential interest. it's so standard to pay cash at this level, that if the owner of this house had gotten word dwight wanted to secure a mortgage for the purchase, he/she would have been like "wtf, just find another buyer" :grin:
would u finance a toaster? b/c relative to the average joe, that's what it's like for a guy w/ $100mill+ to finance a car
my father whose income runs 7 figures financed a $5000 tv simply because it was interest free for 24 months (he paid it 1 day before interest kicked in, lol) Whilst the amount may seem irrelevant, it adds up when you do that to absolutely everything (pays every bill, etc on the final day).
It's all about opportunity cost. For me, there's a ton of realistically profitable ways I'd rather put 20M to use. For Dwight, if he's got the financial acumen of the average NBA player, locking up 20M in a house might actually be a good decision rather than spending it on stuff that depreciates or investing in some hairbrained business scheme.
guys thats crazy to talk like that. I mean so dwight is prob worth $100M+...do you expect him to be mr small business america? Perhaps he should buy a chain of 6 gas stations for $20M and run them day to day or have his high powered agent manage it. I mean c'mon when you churn out the cash like dwight, how you invest $20M isn't the issue, the issue is WTF are you gonna do with that kind of money...plus even though its deductible 100% can you imagine the interest and fees on a $20M mortgage, good lord
as an investment, if you are relying solely on the capital appreciation, then on average real estate just barely keeps up with inflation over time. of course there are many exceptions specific to the situation and property, such as entry price and location, that can override this generality. and also, if the property is to be used to generate rental/lease income then that's a competely different story. at dwight's level it's still not a great investment, but it must also be understood that when someone is already content with their wealth level, the most important consideration is to maintain and retain that wealth. basically he never ever wants to be poor again. so keeping the bulk of what he's already got by doing things like parking a chunk of his cash in a house takes precedent over trying to grow that money for a few percent here and there with alternative investment schemes
First, if Howard is worth $100 million then it is really questionable to sink 20% of his worth into one house. Second (and again) he wouldn't go through a bank to borrow the money. He would essentially set up a trust, invest in something that makes more than the interest rate, borrow the money from that trust and then pay himself.
Not that this is clearly accurate or anything, but it estimates his net worth at $65 million. probably about fair if you think about his career earnings. http://www.therichest.org/celebnetworth/athletes/nba/dwight-howard-net-worth/ My guess is that he is borrowing some way or another, just no through a traditional mortgage so it appears as if he's just throwing cash on the table.
