Wednesday, December 9, 2015

Why Are Famous People Shedding Their Palatial Homes ?

                    
This is 4009 Carter's Creek Pike in Franklin, Tennessee, if you are interested.

                       This week an article surfaced informing us that Tim McGraw and Faith Hill's home in Franklin, Tennessee is being sold.    I am generally not a fan of celebrity homes. Most of them are ostentatious, badly designed and have insufficient acreage for such a grand abode.  However, none of this is true of the historic McGraw Hill estate.    It is a farm and family compound and has seven hundred and fifty plus acres. There are five homes and buildings for farm equipment and a twelve stall barn.  The house itself is extremely well decorated, yet is a home.  This is a place where children can color on the floor, and where family can enjoy Thanksgiving and Christmas. The acreage was smaller when they acquired it, but over the years, they have purchased additional acreage in multiple parcels.   The property in total is said to be up for twenty million dollars although other articles have surfaced indicating that parts of the property have been sold.    The couple says they plan to build another home in the general area  for about three million.



                     Tom Cruise is selling his palatial Telluride Colorado home for fifty-nine million dollars. This one comes with three hundred acres, and palatial is an understatement.  Cruise says he doesn't use the home much and this is why it's being sold.
          


This is an interior picture from the Cruise home.

                            Josh Groban is selling his Malibu home, and it's reduced to four point six million. It was up for six million. 






                     Many other celebrities parted with an amazing estate in the last few years.   One may think that in some of these cases, as these people's children have grown, they feel less need to have a sprawling home for family gatherings, and perhaps would prefer improved mobility for the holidays. Perhaps visiting their older kids as they live their lives is more of a priority.


Many other celebrities have shed or are shedding their large homes and tend to downplay their reasons for doing so.   Perhaps originally. their advisors encouraged them to place a great deal of their assets in a palatial home.  Perhaps they did not realize that a palatial home can cost between one and three million dollars annually simply to pay taxes, homeowner's insurance and simple maintenance and repair, and that is if they paid cash initially, as many of them do. Perhaps they simply wish to diversify their real estate portfolios and own five less expensive homes rather than two  palatial, very expensive estates.  Perhaps they simply desire to simplify their lives and their holdings.

     Since this is such a consistent picture it makes me wonder if something else is going on.  Do the people with the pre-eminent weath advisors know something that the rest of us do not ?    Do they know of an upcoming collapse which will necessitate their having more privacy, more mobility, or more cash uncommitted ?      Or are their decisions to cut the fat from their own budgets simply a reflection of the fact that no one is spending as we once did and therefore wealthy people may not sell more of whatever their product was ?

        This year, I was dropped from the wealth management company I have used in the past.   The A-Team advisors are now reserved for those who will leave a fair chunk of change in the investment account.  I won't comment furthur other than to say there is a great deal of belt tightening in financial circles.     Hear those whispers.  Clean up any debt you have. Get your own financial act together. Prepare for tight times.