This break even analysis would be more appropriate if the £15m had been ~burned, rather than invested in an asset which can be sold.
If I buy a house for £100k cash and it saves me £10k/year in rent (net costs), then after 10 years I’ve broken even in the sense of [cash out]=[cash in], but I also now have an asset worth £100k (+10y price change), so I’m doing much better than ‘even’.
Agreed.. a good way to think about this is that since you get ~5% annual returns on stocks, annual rent equivalent is ~5% of the property value, and so the opportunity cost is spending ~$750k/y or $62.5k per month on conference accommodation.
This break even analysis would be more appropriate if the £15m had been ~burned, rather than invested in an asset which can be sold.
If I buy a house for £100k cash and it saves me £10k/year in rent (net costs), then after 10 years I’ve broken even in the sense of [cash out]=[cash in], but I also now have an asset worth £100k (+10y price change), so I’m doing much better than ‘even’.
Agreed.. a good way to think about this is that since you get ~5% annual returns on stocks, annual rent equivalent is ~5% of the property value, and so the opportunity cost is spending ~$750k/y or $62.5k per month on conference accommodation.
I agree