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Comment by bluedino | Hacker News Reader

"It's 6,570 sq. feet and has 5 bedrooms and 2.5 bathrooms. Fences and security cameras guard the property."

It's also one of several homes. While it's very nice (I've been to it), he has nicer properties elsewhere. I sometimes think he maintains that house for novelty more than anything else.

Indeed: I think it's important to remember that Warren Buffett is a genius at personal marketing. That's why he appears in so much public media, so often. Being an aw-shucks, down-to-earth guy from Nebraska is part of his brand, and the house is part of that. Maybe the idea is that you want your fund manager to be frugal and not flashy.

I was once peeved at a company's CFO driving a Porsche. Eventually I convinced myself that it's okay, because a Porsche is almost the only non-depreciating asset that you can drive.

Pretty much true of any 10y+ car if you shell out enough for the maintenance.

Ahhh, sorry, no. Porsches, in particular the 911, are known to be cars that hold value for a looong time.

I've noticed this trend with Jeep Wranglers too -- especially pre-Fiat Jeeps.

Yup, and Toyota Tacomas and 4Runners, too, as another example. They (Wranglers) hold value spectacularly compared to other models from the brands.

> Warren Buffett is a genius at personal marketing.

It helps when the American press is as obliging as it is in continually portraying him as a sort of billionnaire Mr. Rogers. They'll happily print his folksy wisdom and relatable outrage about how his secretary pays a higher income tax % than he does.

Yet he hasn't lifted a finger to support efforts that would reduce corporate tax loopholes.

https://money.cnn.com/2013/03/04/news/economy/buffett-secret...

I think the strongest point in the story is his final quote. "I'm happy there. I'd move if I thought I'd be happier someplace else."

If more people would realize that happiness can be had on $3000/mo of household income, even if they bring in $10000/mo of income, more people would be both happier and wealthier.

I think the key is that Buffet knows what makes him happy and isn't running around spending money on random things trying to figure out what expensive thing would make him happier.

That is very modest considering his wealth, and within the reach of many middle-class and even working-class people.

A working class person owning a 6700 sqft home? I live in a MCOL area and that would be a $1,000,000 home at a typical price per square foot. In a suburb of a major city that is going to be much more expensive.

"Starter home".

The median house price in Omaha is $128/sq. ft. (~$1280/sq. m.):

* https://www.realtor.com/realestateandhomes-search/Omaha_NE/o...

6700 * 128 = 857 600. From 2017:

> This is the home of billionaire Warren Buffett. Located in a quiet neighborhood of Omaha, Nebraska. He bought the house for $31,500 in 1958, $250,000 in today's dollars. It's now worth an estimated $652,619. He calls it the "third-best investment he's ever made."

* https://www.businessinsider.com/warren-buffett-modest-home-b...

While that is technically accurate, a "working class" person living in an area where there is $128/sqft homes is not making enough to afford a 6,700 sq ft home...

So sure you may be able to say working class in some other area makes enough to afford a similar PRICED home in their area, but that similar priced home in say LA would be 1/3 the size

The median income in Omaha is 32,305 (USD) going off even 4x income to debt ratio that would be a home price $129,220 or about 1,000 sq foot, not too far off the average home size of 1300-1500 for a normal ranch home

And what does a working class person make in Omaha, $35,000? Less? A 30y mortgage at today's low interest rates with a 20% downpayment (how is this person going to save $160,000 for the downpayment?), you are spending $18,000 on a mortgage plus property tax. Add $8,000 for maintenance and suddenly a very very large portion of a working class income is going entirely to this house.

Yep. When you see places like this in the US it is basically always the case that local incomes are shockingly (to a coastal or mountain-west sort) low, maybe coupled with stagnant or very slow population growth. You end up with decades worth of high-end house construction—some likely from better economic times—being competed over by only a tiny sliver of the local population who can afford the half-million to one-million range, for housing.

When population and economic growth go negative, you'll see whole areas of amazing, beautiful houses rotting where they stand, because no-one wants them or because they've gotten so cheap that people who can't afford to keep them up can afford to buy them.

Whoops. Did my math very wrong.

30y mortgage for a 850k house with a 20% downpayment comes out to >30k annually.

Median household income in Omaha is over $60k

The article estimates the value of the house as 652k USD. That is about 470k GBP.

A working-class couple earning the average UK salary (31.5k GBP) could conceivably afford that with a 4.5x salary mortgage if they save 5-10 years for the deposit. It would be enough for a 5-bedroom house in most places in the UK outside London. It is not a guarantee and they could be facing other costs that prevent them from saving up, but it is also not necessarily out of reach.

If you have to save 5-10 years for the deposit, you can't afford the house in a meaningful sense. "It is literally possible for them to risk their finances with a huge loan on a mortgage they will struggle to pay if anything goes wrong" is not really the same thing.

> If you have to save 5-10 years for the deposit, you can't afford the house in a meaningful sense

In the UK, people are already having to save for 8-10 years for their deposits. The difference is that for a £470k house, a couple on an average salary will have to save more each month (by aggressively cutting expenses). It may not be acceptable in some countries to wait for so long, and many people may find the lifestyle sacrifices not worth it. Even for those prepared to go through with it,

> "It is literally possible for them to risk their finances with a huge loan on a mortgage they will struggle to pay if anything goes wrong" is not really the same thing.

That is not what I said or even implied. The monthly mortgage repayments a 5-bedroom house will most likely be cheaper than rent on even a smaller house, so the couple should be able to still build up an emergency reserve.

The hardest part is getting the deposit together, which takes sustained discipline over a long period of time living below their means while everyone else is living it up, and can still be disrupted by life events (job loss, family needs, etc.). Only some working-class people earn wages that are high enough to do this. But once they have the house, not having to pay rent anymore will actually increase their disposable income, not even considering possibility of renting out the house if they face financial difficulties.

Such a defeatist attitude. I saved for my down payment for 17 years - because I started when I was 15. It wasn't much of a hardship because my lifestyle didn't need a house before that. And it was just normal, 100-400 per month when I happened to have a job (which was probably only half of that time).

Cities (usually, but not always, smallish 4th-tier sorts of cities, like Omaha—no dig intended, I actually like Omaha quite a bit) with huge, nice-looking houses at shockingly low prices in the US exist because the jobs there pay like shit, so there aren't many locals competing for them.

There are tons of cities like this where a half-million to $750k can buy you something that's practically an honest-to-god mansion, and isn't even falling apart. (you can do even better out in certain truly rural largish towns, but... well, see below, and imagine all the down-sides are significantly worse, and you've got the idea)

"But I work remotely, so this sounds great!"

Yes, but your best options for education for your kids will likely be a not-even-that-good (probably Catholic, from what I've seen in these cities) private school (there will likely not be multiple even-decent private options, just the one, though there may be other bad private options) because the local public schools are fairly poor. If any public school district in the area is at all good, decent chance it only covers an area with overpriced new-build McMansions, not the beautiful well-tended 40s-construction budget-tier Queen Anne style mansion with the incredible landscaping, that you had your heart set on. If you ever need/want local employment and you're not a doctor, lawyer, or high-tier manager (or maybe car lot owner), you're screwed (software developer? LOL, hope you like $65k/yr to sling PHP for an abusive manager while your hair prematurely greys and falls out). Also, few of these types of cities exist in places with nice outdoor environments and/or weather (those tend to see prices driven up by vacation homes and tourist activity).

IOW it's not valued that way because it's not an extremely nice house for that city. That's standard ultra-rich (by local standards) housing prices in those cities. The prices are that low because so very few people locally make enough money to afford that kind of house.

100%, this defines alot of Florida to a T.

It's not that the jobs and pay in Omaha (or wherever) are shit. It's that there's no money printer industry like tech or high finance dumping stupid amounts of money into the local economy causing a bidding war between the direct beneficiaries and a rat race between everyone else trying to "make their cut".

So many stereotypes that are just flat wrong.

Nebraska K-12 education is ranked 13th in the US according to US News and World Report. (https://www.usnews.com/news/best-states/rankings/education)

Nebraska spends the same per student (K-12) as California, not that spending is necessarily indicative of education quality. (https://worldpopulationreview.com/state-rankings/per-pupil-s...)

In fact, one of the most common things heard when you inquire about private schools is "Sure, but why pay twice for the same education?"

And trust me, there are many many developers in NE who are making far more than 65K. Companies like Hudl, Spreetail, FiServ, more banks and insurance companies you can imagine, all needing good IT people. Sure the pay isn't as high as FAANG, but business isn't as volatile either.

The same can be said for many "4th-tier" towns like Madison WI, Des Moines, IA etc etc.

Hey, I'm in a city that sits either on the tail end of 2nd tier or the high end of 3rd, I suppose, so I sincerely don't mean to dig at Omaha too hard, and I have no problem whatsoever with Nebraska (it's not the kind of basket-case on public policy that certain other states are—hell, mine's probably worse, as far as that goes). I actually find cities about Omaha's size more pleasant than larger (or smaller) ones. I've just noticed in looking into moving to some cities about that size (including Omaha, specifically, in fact) certain patterns—but, yes, there exist better jobs than the stereotype I mentioned, in Omaha, and, in fact, jobs that bad exist here, too, which I know because I've accidentally interviewed for them a couple times, but higher-paying ones are in much better supply, too.

The housing thing's just a kind of indicator for a certain kind of situation, which is that, pretty much by definition, either upper-quintile earners are very rare in a city, or the house happens to be somewhere (as in, a specific region of the city) that kinda sucks for, usually, multiple reasons. Or both.

Typically, you hit up Zillow and start getting excited about the abundance of crazy-cheap, gorgeous, giant houses in a smallish city... it's time to check the city's household income curve, and look into the schools where all these great houses are.

> In fact, one of the most common things heard when you inquire about private schools is "Sure, but why pay twice for the same education?"

On that topic specifically, I think it's an under-appreciated fact that most private schools are kind of bad. How can that be, even when you exclude the ones that exist mainly to teach the kids creationism instead of evolution? Fuck if I know. You'd think the market would put them out of business in a hurry, but, nope. I mean, the best schools in an area are also not-uncommonly (but far from always) private schools, but lots of them are, at best, on par with the public schools nearby.

About private schools. At least where I live, people either send their kids to the Catholic schools, or to the creationist type. There's a decent bunch of Lutheran schools as well, but I don't know anyone who sends their kids to those.

I'm with you on a lot of your argument (there's a reason 3rd and 4th tier city real estate is inexpensive compared to big cities), but, sidebar:

What do you mean by a "bad" school?

As far as I can tell, most people mean one of three things:

  - The test scores aren't as high as I'd like, or
  - There are students who are more rowdy than I'd like
  - I disagree with the syllabus

Plus a dollop of:

  - My kid is profoundly gifted and the school doesn't offer challenging enough material

I empathize with this last one, at least, if that's what your situation is, but I know a lot of rich families that think their kid is profoundly gifted and actually they're just bog-standard moderately-gifted, which usually doesn't require nearly the same investment by the school as parents seem to think.

The other three barely matter for your kid's educational attainment. They seem much more about parents being super invested in having a certain social class for their kids peer group. If so, fair enough, but I don't think that's a "bad school" so much as "undesirable peer group".

Buffet is in the cohort of people who buy double-digit million dollar properties next to their residence just so they are not bothered by neighbors. From that altitude a mere 6ksqft house is hard to tell apart from working class.

If you think a 7ksqft 5-bedroom home with fences and security is within reach of the working class, you have no idea what working class is and/or how much a 7ksqft 5-bedroom home costs.

Buffet probably only needs the fence and security because of his success. If he were an average Joe of no notoriety, he could live there without the security.

Yep, it was installed after an intruder tried to get into his house at night:

https://www.deseret.com/2007/9/7/20039771/intruder-at-buffet...

Mostly just a question of the location.

In Nebraska. Not for the working class but upper middle class definitely

If we go off the 4x income to debt ratio a poster above used, a household income of about $162K is needed to be able to afford Mr Buffett's home. That income places you in the 95th percentile of Nebraska household incomes.[1]

That's a pretty narrow slice to be even "upper" middle class.

[1] https://dqydj.com/income-percentile-by-state-calculator/

Calling 1 in 20 people 'upper middle class' doesn't seem that far of a stretch. More of a stretch to call 1 in 20 rich.

I thought the entire definition of “middle class” was that it’s “average”. 1 in 20 is not average.

Nah. The term is "middle class" where class is defined by the lifestyle/societal-position on a class ladder, not some statistic mean regarding income.

You can have societies with 90%+ population in low class or 50% population in middle class.

History buffs generally know more how it looks for a society to have various levels of classes. I wish we all looked at history more, especially myself if I only had the time to stop rat racing...

Like everything, class follows power law. So 0 to 90% is lower class, 90% to 95% is middle class, 95% to 99% is upper middle class, and 99% to 100% is upper class.

This might be an attempt at humor.

The point is that the house is valued at around $1 million, and Buffett’s net worth is around $82 billion.

His home is worth 650k today. Fence may add another 20k and security cameras are about $100 a pop

https://www.velvetropes.com/backstage/warren-buffett-house

kinda low on bathrooms

otherwise ok house for upper middle class

Bathroom expectations in the US have definitely risen. Not just in terms of the individual bathroom amenities but the number. I actually have a medium sized house (1800 sq ft or so) and I have one small bathroom. But then that was carved out somehow from existing space in a house built before indoor plumbing.

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