To celebrate the launch of my new book, Millionaire Milestones: Simple Steps To Seven Figures, on May 6, 2025, I thought it’d be fun to explore various millionaire topics leading up to the release.
For most millionaires, owning the nicest house they can afford is a top priority. Given that many of us are still spending more time at home post-pandemic, the intrinsic value of a home has gone up. And for millionaires with kids or a lot of furry friends, a spacious house on a large lot can feel like a necessity.
So in this post, let’s explore a fun question: How much income and net worth do you need to afford a $10 million home?
This topic is particularly interesting to me because I love real estate. When I purchased my current home in Q4 2023, I told myself I’d reached the top of my property ladder and didn’t want to climb higher. But there’s no harm in running the numbers just in case the economy roars back or I get lucky with an investment.
Minimum Income Necessary To Afford a $10 Million Home
When it comes to buying property responsibly, I like to follow the 30/30/3 home buying rule:
Rule #1: Spend no more than 30% of your gross income on your monthly mortgage payment.
If you’re financing the home, make sure the monthly mortgage doesn’t exceed 30% of your gross income. If you’re paying all cash, you should easily fall below this threshold.
Rule #2: Have at least 30% of the home’s value in cash (20% for the down payment, 10% as a buffer).
For a $10 million house, that means:
- $2 million for a 20% down payment
- $1 million as a cash reserve or liquid investments
This buffer is your safety net in case of job loss, an unexpected expense, or a major home repair.
Rule #3: Spend no more than 3–5 times your gross annual income on the purchase price.
Ideally, you’d earn at least $3.33 million a year to buy a $10 million home responsibly. That’s the 3X rule in action. You might stretch it and buy the home on a $2 million income if you have strong income stability and growth potential,but that’s a calculated risk.
Stretching to 5X your income means you’ll likely feel financially tight for at least the first year. If you go this route, here’s how to survive the most dangerous period after buying a home.
After owning multiple homes over the past 22 years, I’ve found the sweet spot for your primary residence as a share of your net worth is no more than 30%. Ideally, it’s closer to 20%.
If you’re shopping for a $10 million home, this likely isn’t your first rodeo. You probably already have significant wealth and other investments. In contrast, the average American has over 70% of their net worth tied up in their primary residence.
A $10 million buyer might be:
- A successful entrepreneur
- A senior executive at a financial institution
- A partner at a top law firm
- A celebrity or professional athlete
- A well-connected or corrupt government official who can trade with insider information
If your house represents more than 30% of your net worth, you’re at greater risk of financial stress during downturns, just like what happened during the 2008 Global Financial Crisis.
If your primary residence represents less than 10% of your net worth, you may be under-living relative to your financial capacity. That could be a sign to spend a little more on yourself or consider giving more away.
Ideal Net Worth Range
To feel financially secure with a $10 million home purchase:
- Minimum net worth: ~$33 million (30% allocation)
- Ideal net worth: ~$50 million (20% allocation)
With a $50 million net worth, you could comfortably pay cash or take on a smaller mortgage. Even if you take on an $8 million mortgage at 6%, your monthly payment would be about $48,000—easily manageable at this level.
Combining Ideal Income and Net Worth
Here’s a quick reference guide to safely buying a $10 million home:
| Category | Amount |
|---|---|
| Minimum Income | $2 million/year |
| Recommended Income | $3.33 million/year |
| Minimum Net Worth | $16.7 million (at 60%) |
| Recommended Net Worth | $33.4 million (at 30%) |
| Ideal Net Worth | $50 million (at 20%) |
If you only meet the minimum income requirement, make sure you have at least the recommended net worth. Conversely, if your net worth is on the low end, you’ll want your income to be on the higher side. Here’s a more comprehensive chart that highlights more homes at different price points.
Put Down More Than 20% If You Want To Buy A $10 Million House
If you’re planning to buy a $10 million home, it’s wise to put down more than just 20%. Most people I know buying homes in this price range are putting down 50%+, often paying all cash.
Why? Because many high earners making over $1 million a year don’t have high base salaries. Instead, their base is typically in the $250,000–$500,000 range, with the rest coming from stock grants and year-end bonuses. Banks may not fully recognize these forms of income when underwriting large mortgages given they are highly discretionary.
In today’s still-high interest rate environment, all-cash offers are also more attractive to sellers and more practical for buyers. Here’s what a mortgage would look like at 6%:
- $8 million loan = ~$47,000/month
- $7 million loan = ~$42,000/month
- $6 million loan = ~$36,000/month
- $5 million loan = ~$30,000/month
While these payments may be affordable if you’re making at least $2 million a year ($166,667/month), sticking to the rule of spending no more than 30% of your gross income on housing suggests a monthly cap of $50,000. That’s cutting it close with an $8 million loan.
The Ongoing Cost To Own A $10 Million Home
Owning a $10 million house doesn’t just mean a big upfront purchase, it means consistently large ongoing costs as well. Property taxes alone can range from $40,000 to over $300,000 a year, depending on your state. Hawaii offers the lowest property tax rates, while states like Illinois, New Jersey, and Texas are among the highest.
Beyond taxes, the cost to maintain a $10 million home adds up fast:
- Higher heating and utility bills
- More expensive homeowner’s insurance
- Increased maintenance and repair costs
- Costly landscaping and cleaning services
- A larger mortgage payment (unless paid in cash)
And let’s not forget furnishing the place. It could cost well over $200,000. The bigger the house, the more expensive it is to make it feel like home. When something goes wrong—like a roof leak during a “Bomb Cyclone” as I experienced—it becomes much harder (and more expensive) to fix.
When evaluating a $10 million home, don’t just focus on the sticker price. Consider the cost of maintaining a $10 million house every year. Then factor in the opportunity cost of tying up so much capital in a primary residence that’s not generating income.
These ongoing costs are why you must follow my income and net worth guidelines by home price. If you don’t, your home could take you under.
Related: What’s It Like Living In An $18 Million Mega-Mansion?
$2.5 Million Income Family Budget Owning A $10 Million Home
Here’s a realistic breakdown of a family of four living in a high-cost area, earning $2.5 million a year:
- Home: They put $3 million down on a $10 million dream home, taking out a $7 million mortgage at 6%, which costs them $504,000/year. Add ~$149,000/year for maintenance, taxes, insurance, and landscaping, and the total housing cost is around $653,000/year.
- Kids: Their two children attend private grade school for $130,000/year, plus $5,000 in donations.
- 529 Contributions: They contribute $19,000/year for each child.
- 401(k) Savings: Each parent maxes out their 401(k) at $23,500/year (2025 limit), working toward millionaire status.
Despite the high expenses, they manage to save $373,140/year in their taxable brokerage accounts and have a $1M+ buffer in cash and liquid stocks for emergencies.
But here’s the risk: If one parent loses their job and household income drops by 50%, the family could be in serious trouble. Bear markets don’t just bring down investment portfolios—they also increase the risk of job loss.
Even a $5 million net worth, the absolute minimum I recommend to own a $10 million home, may not be enough. It all depends on how that net worth is structured. For instance, if $3 million is tied up in home equity and $1.8 million is in illiquid company stock that vests over three years, then having just $200,000 in cash won’t go far given their high burn rate.
Realistically, to own a $10 million home with minimal financial stress, a net worth closer to $33 million is more appropriate. At that level, you can weather market volatility, job loss, and unforeseen expenses. If you can’t sleep peacefully at night in your mansion, then what’s the point?
Should You Buy a $10 Million Home?
The best time to own the nicest house you can afford is when your kids are still living at home. So, I get why some of you might be browsing $10 million+ listings online. It’s fun to dream, and maybe you’re even serious about upgrading.
But even if you earn $2 million or more a year, I’m not convinced it’s worth buying such an expensive property. The upkeep alone can be a major downside, especially if the home wasn’t well built. I know a couple of people who bought $10+ million homes and ended up spending years trying to fix persistent leaks. What a nightmare.
Consistently making over $2 million a year is also no easy feat. You can ride a hot streak for a while, but the economy moves in boom-bust cycles. I saw this firsthand during my banking days, and I see it now as a small business owner. One year you’re up, the next you’re trying to stay afloat.
That’s why I believe you need a net worth of at least $33.3 million before buying a $10 million home. Your net worth is more reliable than your income, but even then, it’s not bulletproof. Just look at 2025, when tech stocks dropped more than 20%. If $30 million of your $33.3 million net worth was tied up in the Magnificent 7 companies, you’d be staring at a $6 million loss. Ouch.
Another factor: what are you upgrading from? If you’re jumping from a one-bedroom apartment to a 6,000-square-foot, six-bedroom mansion because your AI company IPO’d, that’s probably overkill. But if you’re trading up from a $5 million, 3,900-square-foot home with four bedrooms, the jump may be more reasonable. Further, you’ll have the experience to actually make use of the extra space.
For the sake of adaptability and long-term appreciation, a good rule of thumb is not to upgrade your primary residence by more than 100% in price. Beyond that, the risks and complexities start to outweigh the rewards.
A Better Way To Live In A $10 Million Home
While you’re working on building your income and saving up a down payment for that dream $10 million house, consider a smarter approach: invest in real estate to keep up with the market, without overextending yourself.
You might want to follow my BURL strategy, which stands for Buy Utility, Rent Luxury. The idea is simple: invest in properties that generate high rental income, and rent the luxury lifestyle instead of buying it.
If you follow this strategy, you could generate enough passive income to rent a $10 million home—and still have money left over.
For example, instead of buying a $10 million house at a 3% cap rate, which would generate just $300,000 a year in rental income, you could rent that same house for $300,000 a year. Then, invest the $10 million in higher-yielding multifamily properties at a 7% cap rate, and earn $700,000 a year in passive income.
After covering your rent, you’d still have $400,000 before taxes to spend or reinvest. Plus, your investment properties could appreciate over time, especially if they’re located in fast-growing, more affordable 18-hour cities.
By using the BURL strategy, you’re optimizing your capital and your lifestyle.
Order My New Book: Millionaire Milestones
If you’re ready to build more wealth than 93% of the population, grab a copy of my new book, Millionaire Milestones: Simple Steps to Seven Figures. With over 30 years of experience working in, studying, and writing about finance, I’ve distilled everything I know into this practical guide to help you achieve financial success.
The reality is, life gets better when you have a lot of money. Financial security gives you the freedom to live on your terms and the peace of mind that your children and loved ones are taken care of. You might even consider buying your $10 million water-view mansion on a large plot of land after reading my book.
Before you get to a $10 million net worth, you first have to reach the $1 million milestone. Millionaire Milestones is your roadmap to building the wealth you need to live the life you’ve always dreamed of. Order your copy today on Amazon and take the first step toward the financial future you deserve!
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