It's only a facepalm if the said soon to be retired co-worker can't afford all those purchases.
I disagree. A cottage is nearly always a tremendous financial drain for no good reason. You want to vacation somewhere in the woods for a few weeks a year? Rent a cottage. You're not tied to the same tiny plot of land so you can experience different places, don't have to pay for the maintenance, taxes, and upkeep on a building that you're not living in for more than half the year, and can probably afford to rent for a short period a much fancier place than you could afford to buy.
I spent the last seven years building fairly modest vacation cottages in a local resort, and currently live in one as my primary, only, paid cash for, residence. One of life's unexpected lessons was starting this adventure with absolutely zero expectation that most of my buyers would be making extraordinarily bad financial decisions when they bought one of my homes. With little exception, these folks are middle age to early AARP, middle class, and insist on creating a massive drain on their financial future by satisfying a 100% "want" which they have zero need for.
My typical customer spent $140-180K for a new home. They are a mix of those that needed various levels of financing, to ones that drain their retirement savings to pay cash. On the financed side, I had two that borrowed 100% to close the deal. One used FHA, needed sale price inflated seller's assist to cover the 3% down, and wrote less than $400 in checks at the table to cover small fees. Another got a 1st for 90%, and a co-signed super high rate second to cover the remainder, including all closing costs. On the cash down side, one guy emptied his small retirement account, (after losing half of it at the bottom of the market) and threw his $60K total savings at the deal, he then financed with BOA. Oven the next few years the home declined in value by 10-15% and, so far, there has been almost zero appreciation.
These homes typically have a $2800-$3000 yearly tax bill, an annual $400 HOA Fee, and at least $1500-1800 in utilities, minimum. A typical buyer drops $5-10K on interior furnishings and often an equal amount in landscaping.
The story got even more interesting when I developed a relationship with a Real Estate broker who had been doing business in the neighborhood for many decades. She told me that, absent the ongoing recession, a typical second home property in the area will turn over every five years, on average. Her personal record was selling the same home five times, since the 1980s. This is particularly horrifying once you factor in the fact that a five year old home will bring roughly 80% of the sale price. ( one of my customers recently sold a place that was $189K new, in 2004, he got $150K) When you add up all the closing costs X2, fees, taxes, expenses, improvements, interest, depreciation, etc... I could easily see one of my customers selling their home in five years at an out of pocket loss of $60-80K. I'm sure there are dumber moves to be made, but WOW, when it comes to the stupid Olympics, buying a vacation home can earn you a gold medal.