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I got a $2100 HVAC repair done (had to replace the freon coils in the unit) under my home warranty for the cost of just a $75 deductible. I still don't advocate keeping them past the 1 year your seller might throw into the deal, but sometimes you get lucky
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Feb 21, 2017 14:49
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EAT FASTER!!!!!! posted:I agree with the first bit, I just don't know what I would do with the "added liquidity." We max our tax advantaged space every year already, but I guess I could just refi onto a 15 year fixed. Just a regular taxable brokerage. If you want to retire early or in style, you will need more than just tax advantaged space, unless you mean maxing the full 53?k space for two.
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Feb 21, 2017 15:19
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baquerd posted:Just a regular taxable brokerage. If you want to retire early or in style, you will need more than just tax advantaged space, unless you mean maxing the full 53?k space for two. Not early, but in style would be nice. And our advantaged space is 106 plus an additional 36 in a 457. I guess taxable brokerage is fine but it really irks me to be paying 45% on the money I put in the brokerage and then 15% on the money I take out of the brokerage. What a goddamn racket.
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Feb 21, 2017 15:31
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EAT FASTER!!!!!! posted:Not early, but in style would be nice. And our advantaged space is 106 plus an additional 36 in a 457. I guess taxable brokerage is fine but it really irks me to be paying 45% on the money I put in the brokerage and then 15% on the money I take out of the brokerage. What a goddamn racket. You only pay hilariously low long term cap gains on profits above your basis as you realize them.
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Feb 21, 2017 16:49
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H110Hawk posted:You only pay hilariously low long term cap gains on profits above your basis as you realize them. Give me more tax advantaged space daggum it!
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Feb 21, 2017 17:09
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EAT FASTER!!!!!! posted:Give me more tax advantaged space daggum it!  Because long term cap gains not being at the ordinary income rate isn't tax advantaged enough. Also the social security cap is stupid. (I sit between the social security cap and the medicare tax.)Why do you take all of your income as ordinary income? You should be incorporated. If you haven't setup estate planning you should do that as well.
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Feb 21, 2017 17:36
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Rated PG-34 posted:Goondolences Yeah, I was actually about to start taking it apart to see if I could get it working based on what I could find on the internet (they are Samsungs and apparently terrible and prone to exactly this issue) when we realized they might be covered. It says it is just a $75 fee for them to come out. Signs are promising but until it works and I don't get a bill I'm not going to assume anything. Given the issue if they aren't going to fix it for that fee I'd rather just buy a new one since it sounds like it would be a couple hundred bucks in parts even if I do the labor.
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Feb 21, 2017 17:44
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Thoguh posted:Yeah, I was actually about to start taking it apart to see if I could get it working based on what I could find on the internet (they are Samsungs and apparently terrible and prone to exactly this issue) when we realized they might be covered. It says it is just a $75 fee for them to come out. Signs are promising but until it works and I don't get a bill I'm not going to assume anything. Given the issue if they aren't going to fix it for that fee I'd rather just buy a new one since it sounds like it would be a couple hundred bucks in parts even if I do the labor. Before you pay them read your contract. They will gladly take your $75 fee even if it's not covered. It should spell it out very clearly what is and is not covered. You might find out that the belt itself isn't covered, just the sprockets and motor or something similar. (I don't know what's wrong with yours.)
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Feb 21, 2017 17:52
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Thoguh posted:Yeah, I was actually about to start taking it apart to see if I could get it working based on what I could find on the internet (they are Samsungs and apparently terrible and prone to exactly this issue) when we realized they might be covered. It says it is just a $75 fee for them to come out. Signs are promising but until it works and I don't get a bill I'm not going to assume anything. Given the issue if they aren't going to fix it for that fee I'd rather just buy a new one since it sounds like it would be a couple hundred bucks in parts even if I do the labor. If you would not mind, keep the thread updated with this. I am curious how this is going to resolve itself. I have a home warranty through HMS and am trying to figure out if I want to renew or not.
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Feb 21, 2017 18:04
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clopping and cumming posted:If you would not mind, keep the thread updated with this. I am curious how this is going to resolve itself. I have a home warranty through HMS and am trying to figure out if I want to renew or not. Never renew unless you want your stuff replaced with bottom of the barrel new construction contractor specials by contractors who can't get work elsewhere or are just starting out and as such are willing to take your work in hopes of upcharging you on the final invoice. They're doing the work for what amounts to "warranty book rate" like mechanics do at car dealerships which includes no wiggle room, assumes everything goes perfectly and no one so much as blinks between fastening the first bolt and the last.
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Feb 21, 2017 18:07
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EAT FASTER!!!!!! posted:Not early, but in style would be nice. And our advantaged space is 106 plus an additional 36 in a 457. I guess taxable brokerage is fine but it really irks me to be paying 45% on the money I put in the brokerage and then 15% on the money I take out of the brokerage. What a goddamn racket. You don't want to make more money because you'll lose some of it to taxes? What the gently caress?
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Feb 22, 2017 09:26
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I'm putting an offer on an $800k lovely fixer upper tomorrow. Wish me luck Edit: Ask me anything I guess Rocks fucked around with this message at 09:44 on Feb 22, 2017 |
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Feb 22, 2017 09:36
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I read today that single women are twice as likely to buy a home as a single man. So actually this thread is a great way to meet women, who knew?
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Feb 22, 2017 17:03
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EAT FASTER!!!!!! posted:Not early, but in style would be nice. And our advantaged space is 106 plus an additional 36 in a 457. I guess taxable brokerage is fine but it really irks me to be paying 45% on the money I put in the brokerage and then 15% on the money I take out of the brokerage. What a goddamn racket. Just wanna parse this. Presumably the 45% you're complaining about is your income tax. You will pay that no matter what you do with the money, because as you say, you've already maxed your tax advantaged space. Well... you could give some to charity, and deduct that, but you know what I mean. You should not count the income tax you'll pay on your income as a cost of investing, it's just a deduction of your income. The 15% is not "the money you take out of the brokerage", it's a 15% tax on your profits. Capital gains taxes never reduce your actual capital, just your gains. So you're "irked" that, as a straight-up wealthy rich person, you're going to pay a tiny slice of your profits in taxes. Less than you or anyone above a poverty level pays on earned income (bearing in mind even minimum wage earners pay social security and medicare taxes). I'm not mad at you, I'm just hoping you'll adjust your mind set here. You have an opportunity to own outright your home at an age where most Americans don't even have a down payment yet, plus sock far more away in tax-advantaged retirement than most Americans have access to, plus invest money and take advantage of the stupidly low capital gains taxes to grow your wealth at tax rates far below what people generally pay for their earned income, and then retire early and enjoy your life without having to work, at a young enough age that you're probably not crippled by health issues yet and can actually do fun things with your time and (big piles of) money. I would suggest you view your opportunity for growing your wealth here as a tremendously cheap one, and the 15% share of your profits you'll pay for that privilege as the incredible bargain that it actually is. e. Also note that if your property goes up in value, the first $500k of that value increase won't be taxed at all. Leperflesh fucked around with this message at 18:58 on Feb 22, 2017 |
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Feb 22, 2017 18:53
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The complaint isn't really that I'm taking CG on the gains (although yeah I do hate tax, which is weird because I'm a liberal but you raise a really fair point), it's really whether (anticipated future gains - CG) > (cost of mortgage + refinancing). Obviously it is, but it's just taking some time to settle myself to that perspective.
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Feb 22, 2017 19:47
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EAT FASTER!!!!!! posted:The complaint isn't really that I'm taking CG on the gains (although yeah I do hate tax, which is weird because I'm a liberal but you raise a really fair point), it's really whether (anticipated future gains - CG) > (cost of mortgage + refinancing). Obviously it is, but it's just taking some time to settle myself to that perspective. Well from your posts so far I'm assuming you're sinking all of your excess income into house payments + a checking account or something? Regardless of whether you refinance or not, you should put some of that revenue into a brokerage account because it's silly to save all of your money in checking/savings accounts. It's better to be taxed on more money than on less
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Feb 22, 2017 21:19
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Just wait until he figures out that in private practice partners can get paid in such a way that they only pay capital gains haha
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Feb 22, 2017 21:27
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Bozart posted:Just wait until he figures out that in private practice partners can get paid in such a way that they only pay capital gains haha Believe me when I tell you I have absolutely no desire for that job or any of the problems that accompany it.
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Feb 22, 2017 22:21
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QuarkJets posted:Well from your posts so far I'm assuming you're sinking all of your excess income into house payments + a checking account or something? Regardless of whether you refinance or not, you should put some of that revenue into a brokerage account because it's silly to save all of your money in checking/savings accounts. It's better to be taxed on more money than on less Yeah, we are early enough in our process that we were still knocking off bad debts until our taxes cleared this year and now are faced with the decision about whether to sink excess income into house payments or - presumably our best and other option - a brokerage account. Our emergency fund, which earns us > 2%, has a "cap" for the amount we can earn that much interest on so we're looking to very quickly find that next best thing to do. I guess it'll be Vanguard, then. We have such substantial exposure to VINIX in our retirement funds already that I don't know what 'next' asset class to invest, and having read the Four Pillars, I'm not really certain about any asset class except stock for the long run, so I guess I'll need to do more reading.
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Feb 22, 2017 22:24
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welcome 2 Clown Town posted:we actually do already have equipment from when i painted my apartment but we bugeted based on 2 gallons/room of the primary and then 2 gallons total of the trim color, i should reiterate its not a very big house Quoting my post from two years ago to say that all the work on the house was completed at-about-budget. We lived in the house for two years while doing most of the work ourselves. Purchased the house for $55,000 in 2015, put in ~$20k worth of work and materials, and now have a contract on the house for $104k. It has been a fun and stressful project but it certainly was worth all of the effort. See before/after images in this album: http://imgur.com/a/nRz9D Feel free to ask any questions.
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Feb 22, 2017 23:04
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Quick intro, living in Orange County, everybody knows how stupid the market is here. I don't have a full emergency fund yet(around 20k, want 25k given high cost of living area), no downpayment, etc. Basically, do never buy. Am I doing it right? The problem is that rent is only going up. Asking price is around 2200/month for 1000 sq/ft 2bed/2bath apartment near Irvine/South County. I enjoy cars, among some other hobbies that basically require a stand alone home. Don't even get into the girlfriend wanting pets, that will most likely be on an aggressive breed list so we wouldn't be able to rent the majority of property out here anyhow. I've tried to balance a commute vs paying more to live near, but even traveling down to Oceanside or East Corona will only save a few hundred a month and that will easily be consumed by sitting in suicide levels of traffic on the 91 or 405. So stupidly, looking for options in the purchase/short commute space. It's a struggle because I realize that I am in no position to actually purchase given the numbers, but I have a sunk cost of money going into rent to take into account as well. Without being picky, a house that will fit our "wants" is going to run about 3000-3400/month. We're talking 2000 sq ft, 3-4 bed, 2-3 car garage. That monthly rent translates roughly into 600k worth of mortgage. All rough mind you, so don't quote this as gold. Someone slap some sense into me. I know that purchasing is the wrong idea, but with rent being so high, it feels like that's the only real option is to go into crippling house debt to somewhat enjoy life/hobbies outside of work or live in a shithole 900 sq ft apartment and don't have the option to enjoy my hobbies, all while still overpaying for the space/shared walls/shared laundry/etc. Quick stats, making around 80k/year now, saving 25%+ of my income annually in retirement/ira/savings accounts, hoping/expecting a job change soon which will kick my salary to the mid 90's with tons more benefits, have one car note for my daily driver and no other debt. Once this new job kicks in (basically a guarantee but I'm not counting any chickens just yet because I'm a realist), it will be a 10 year minimum type position for me so buying isn't as scary since it would long term. I've owned a house in the midwest in the past for about 10 years. The story is long and basically BWM, but I was very lucky and came out unscathed, completely. Just feels like there are two options, spend $600k and get a house that will probably kill me or continue to set piles of cash on fire to rent a house that likely won't fit all our wants. Seems like I'm rambling so I'll just stop now.
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Feb 22, 2017 23:26
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I'm going to be blunt, you don't make nearly enough money for a 600k-ish house. There's a general line of you don't want a house more than 3x your income. For you, 240k is likely unreasonable in your area, so I'd personally bump it up closer to 320k...maybe slightly higher if it's a place I love. But 600k? You're going to go broke from this, and if anything happens to you it's a foreclosure/bankruptcy just waiting to happen. You cannot do this man, it simply doesn't make sense.
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Feb 22, 2017 23:35
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Don't ever approach buying a house from the "how much can I afford monthly" angle, at least not initially in determining how much you can buy. This is how people get ruined.
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Feb 22, 2017 23:47
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tehDiceman posted:Quick intro, living in Orange County, everybody knows how stupid the market is here. I don't have a full emergency fund yet(around 20k, want 25k given high cost of living area), no downpayment, etc. This is basically Irvine.txt but with an emergency fund and retirement savings. It's all corporate apartments that just keep jacking the rent higher and higher, charging hilarious fees like "pet rent" and "lease discounts" (the $2200/month is on a 1+ year lease, it jumps up a few hundred a month if you go month to month at the end.) They keep raising the rates because their vacancy rate is lower than the amount of new rents coming in from the rate hikes. Get a new job outside of orange county. Come up to LA County where you can at least rent for sane amounts of money and not live in soul crushing orange county. Do not ever buy a $600k house on $80k a year unless you have 50%+ to put down.
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Feb 22, 2017 23:50
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Kirios posted:I'm going to be blunt, you don't make nearly enough money for a 600k-ish house. There's a general line of you don't want a house more than 3x your income. For you, 240k is likely unreasonable in your area, so I'd personally bump it up closer to 320k...maybe slightly higher if it's a place I love. I'm also gonna say that the 3x rule of thumb is completely dead in high cost of living areas. In the San Jose area where the median single family home costs $1.2 million, a bunch of people are buying those on mid-upper $200s incomes and the PITI is still a hell of a lot cheaper than renting something comparable is. There's some places where housing costs so much and salaries are so high that you make $250k but still can't afford to drive a luxury car, do exotic travel, or even have a real yard.
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Feb 23, 2017 00:03
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Orange county does not support those wants on that salary. If you're only making 80k there, you are too poor to properly take advantage because you are competing against people making 250k-500k+.
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Feb 23, 2017 00:04
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tehDiceman posted:Quick intro, living in Orange County, everybody knows how stupid the market is here. I don't have a full emergency fund yet(around 20k, want 25k given high cost of living area), no downpayment, etc. 1) how did you calculate 600k worth of mortgage? Show your math so we can tell you whether it's a reasonable assessment 2) why do you need 2000 sqft of house? You have no down payment, buying a $600k with no down payment and your income is a bad idea QuarkJets fucked around with this message at 00:34 on Feb 23, 2017 |
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Feb 23, 2017 00:19
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We need a big house because we want to get big dogs but we can't have big dogs here so we need a big house! I'd bet this is honestly the thought process behind many purchases.
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Feb 23, 2017 00:36
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tehDiceman posted:Quick intro, living in Orange County, everybody knows how stupid the market is here. I don't have a full emergency fund yet(around 20k, want 25k given high cost of living area), no downpayment, etc. If you are in Irvine nearly all of the homes are in HOA and none of them will let you have aggressive breed dogs. They also likely will not let you park non operable cars on your property. Irvine is a very different city from the rest of the United States. Everything is planned out and there are tons of rules. On only your $80k a year income you could get qualified for a mortgage of $462k if you save 20% down, but it doesn't necessarily mean you could afford that mortgage payment, HOA, taxes, insurance, increased utilities and maintenance. This is based on some very simple math on https://www.zillow.com/mortgage-calculator/house-affordability/ The average home in Irvine is $750k. If you put zero down the monthly payment will be about $4750 on a $750k house with no HOA, no maintenance, just interest, PMI, principle and taxes. If you can get 20% down that drops to $3450 a month, mostly because of the PMI being dropped. You still need to set aside a few hundred a month extra for maintenance. So if you get married and your girlfriend is making a similar amount, and you save up 20% down you are getting closer to affording a place like this but you really do need to save 20%, have zero other debt, and have an emergency fund still. Do not buy a house together without getting married. Even at $150k a year combined income you would be stretching yourself thin on a $750k home, a cheaper one would be wiser. Renting is cheaper for a lot of people. Once you factor the opportunity cost of investing the downpayment in, the cost of home ownership is often higher than just renting. You are not throwing money away on rent, you are throwing money away on buying a home that is not right for you. How long do you plan on living and working in the same place? What are the odds you will want to move before the 10 years is up? How much space do you really need for your hobbies?
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Feb 23, 2017 01:27
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Can one of you fine people more knowledgable about houses and real estate comb through this company's website and see how they could potentially gently caress us over? https://ivoryhomes.com/ They have floor plans we like at a price we can afford in a location that's perfect. Our budget is 325k and the community we're looking at starts at 280k and we like the smaller floorplans so we have room to add some upgrades. We're not going to commit to anything for at least another 6-8 months but I want to learn everything I can so I can go in guns blazing and get the best deal I can. I already know to go in armed with my own realtor even though their SmartMove program looks real tempting.
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Feb 23, 2017 02:27
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I'll answer all these in one post. To mention, and it might be mentioned below, I'm not a financial illiterate, as much as it may seem based on the questions posed in my OP. I budget weekly and geek out on finance for a few hours for month end. It's a love/hate relationship, mainly for how slow it goes sometimes but how awesome it is to watch your net worth climb. I'm just hoping to have some creative conversation about high cost of living areas and how much can reasonably be expected when trying to purchase in that type of market. Sure the advise may get used in the real world if I can work it out and make it all happen, but there are too many factors holding this back at the moment so it's likely a 2-3 year plan. All that timeline really does is give me a little down payment, but it's not like my income situation is expected to change drastically in that time so this conversation does add value.Kirios posted:I'm going to be blunt, you don't make nearly enough money for a 600k-ish house. There's a general line of you don't want a house more than 3x your income. For you, 240k is likely unreasonable in your area, so I'd personally bump it up closer to 320k...maybe slightly higher if it's a place I love. I already know that it's entirely unreasonable, I'm just talking the market and what is readily available. The truth is I likely wouldn't go above 450k, but it would have to have everything I want plus the location, that isn't happening in this county without years of searching, maybe not even then. H110Hawk posted:This is basically Irvine.txt but with an emergency fund and retirement savings. It's all corporate apartments that just keep jacking the rent higher and higher, charging hilarious fees like "pet rent" and "lease discounts" (the $2200/month is on a 1+ year lease, it jumps up a few hundred a month if you go month to month at the end.) They keep raising the rates because their vacancy rate is lower than the amount of new rents coming in from the rate hikes. This advice doesn't work for me, I'm not the only person in the equation so I can't decide that we're moving 40 miles north. She won't be on board so that's that. Yes, Irvine.txt for sure. I'm not interested in living in Irvine though, but people generally know where it is so it's a nice landmark to use. Currently we're in the Mission V/Lake Forest/Rancho area, much nicer and less sterile. Twerk from Home posted:I'm also gonna say that the 3x rule of thumb is completely dead in high cost of living areas. In the San Jose area where the median single family home costs $1.2 million, a bunch of people are buying those on mid-upper $200s incomes and the PITI is still a hell of a lot cheaper than renting something comparable is. I'm saying. I understand general rules of best practice but in areas such as this, the rules have to be more dynamic. I'm not saying people should be buying million dollar homes on janitor salaries though, to be clear. baquerd posted:Orange county does not support those wants on that salary. If you're only making 80k there, you are too poor to properly take advantage because you are competing against people making 250k-500k+. I disagree that this applies to all of OC. Irvine? Yes, definitely, but not the entire county. QuarkJets posted:Two questions I didn't bother writing it down because it was a quick calculator online. If you're referring to ability to pay, we are paying closer to 3k than 2k for the place we are in now. The google calculator that pops up says 600k at 4% at 30 years is roughly 2800 and change. Napkin math. Now, obviously we're not talking apples to apples, rent is total cost and buying is mortgage payment plus whatever bad things happen during that month plus HOA plus plus plus plus etc. We don't even have to go down that avenue, I'm a planning personality and have beat this horse dead many times over. As to your second question, we have 1700 sq ft now and some of the space is not really usable for my hobbies, it could be a bit bigger in some areas. With the right layout, the size we have now is probably perfect. I can agree with your last statement, I did in my OP. Though I think that a down payment could make all the difference if I was serious about spending that kind of scratch. Pryor on Fire posted:We need a big house because we want to get big dogs but we can't have big dogs here so we need a big house! To be honest, I don't even want a dog. Also, I would never buy a house for a singular reason. There are numerous factors under consideration here. I believe that your statement applies to most people, just not me. lampey posted:If you are in Irvine nearly all of the homes are in HOA and none of them will let you have aggressive breed dogs. They also likely will not let you park non operable cars on your property. Irvine is a very different city from the rest of the United States. Everything is planned out and there are tons of rules. Thank you for this post. I feel like it's the best response so far. Earlier in this response I mention that Irvine is just a landmark, I certainly don't want to live in Irvine, it's too sterile and expensive for what it is. It's not even that nice in my personal opinion. (gasp!) Yes HOA and other fees are not accounted for in this equation. I would certainly consider that cost though as much of OC has them. Definitely not buying a house with a person that I'm not legally bound to, hence why I'm not including any of her income in this discussion. I'm also not buying a house with the expectation that rent money comes in, just another mistake that people make. I fully agree that renting is not throwing away money, though I've not always felt that way, but I also think that due to the high cost of rent we are paying and would potentially pay over the next ten years that purchasing and attempting to reap some of that value would be +EV in the long run. I'm planning a job change that will hopefully happen within the next 30-60 days. If this job does end up panning out like I expect, I will be staying there for minimum 10 years to vet and earn the benefits that come from that time. I'm considering this my "middle aged settle in for a bit" job. There is a very low possibility of this plan not working out, once the job is mine. All of this planning does revolve around that working location, so if that job doesn't pan out, I likely won't stay in SoCal for much longer. (1-2 years, obviously renting territory) Wanting to get into a project car and a few other hobbies could easily consume 2-3 bedrooms and a 1.5 car garage for parts and tools, etc. Clearly we're talking first world problems here because nobody needs a project car or 3 spare bedrooms for hobby, and I probably don't deserve any of it, but I am in a position where I can work it out and save a proper amount to retire comfortably, why not? Not to mention the other person that lives here and her needing/wanting some space for her stuff/hobbies/etc. Honestly I want to have actual acreage, but also realizing that it is more of a retirement plan than a current living possibility. A large outdoor garden and a workshop with a lift.......just dreams at this point. tehDiceman fucked around with this message at 04:48 on Feb 23, 2017 |
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Feb 23, 2017 04:45
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I used to live in Irvine and I agree with your assessment that it's actually not a great place to live.
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Feb 23, 2017 06:01
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Do what I did and buy a duplex in somewhere like Santa Ana. Commute isn't horrible, city actually has character, and you can pay ~2/3rd of your mortgage with the rent from the second unit. With 20% down my mortgage payment is $2,450, and rent from my other unit is $2,100. Though this won't give you the extra bedrooms you apparently need to store car parts 
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Feb 23, 2017 07:08
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Irvine guy, don't forget that you'll be a super conforming at the mortgage amount that you're thinking of. The rates on those are a good half point higher than a normal conforming. But at least it's not a jumbo I guess?
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Feb 23, 2017 08:43
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tehDiceman posted:I'll answer all these in one post. To mention, and it might be mentioned below, I'm not a financial illiterate, as much as it may seem based on the questions posed in my OP. I budget weekly and geek out on finance for a few hours for month end. It's a love/hate relationship, mainly for how slow it goes sometimes but how awesome it is to watch your net worth climb. I'm just hoping to have some creative conversation about high cost of living areas and how much can reasonably be expected when trying to purchase in that type of market. Alright, I'll bite and make an effortpost that goes against the majority/popular consensus here. Look, IF you have the discipline to make the repayments without fail (AND you've done a worst case scenario where if your repayments go up by like...20-25% you can STILL make the repayments without fail) AND owning your own home is fundamental to you being able to fulfill all the other priorities in your life, then go for it. It is possible to buy what most people would consider outrageously expensive property relative to a low salary. I have done this, in Sydney, which has the second-most expensive real estate market in the world (Hong Kong is #1). What's NOT possible is doing so without drastic reductions in lifestyle. Virtually all of my paycheck went to repay mortgages - and whenever I got a payrise, the extra went straight into the mortgages as additional repayments. The remainder went to the cheapest phone plan I could get ($20/month), groceries and public transport. I did nothing* other than wake up, go to work, go home, study and sleep for years. *When I say nothing, I really mean nothing. I did not go see movies or shows or festivals or whatever. I did not go out for lunch or dinner with friends. I did not go to the pub/bars after work for drinks with co-workers, unless the company was picking up the tab. I did not order takeaway or eat out at restaurants unless the company was picking up the tab; I cooked at home and packed lunch and dinner every day. I did not go shopping for clothes, shoes, new electronic gadgets, etc. I did not have a salon/spa habit - not even for haircuts (I would wait until free haircut offers came up on Craigslist when salons needed to train their staff). I did not date for a long time, and when I did, I did not go on any expensive dates. I did not pick up any new hobbies, nor did I continue any existing hobbies that would have required spending any amount of money to continue. The only exception I made, was a few trips to travel - but only because the company was footing the bill for half of the trips. The other half at my cost, I did everything on the cheap. I couchsurfed and slept in backpacker hostels that had free breakfast included and took sketchy Chinatown buses instead of Greyhounds/flying. I also had a large number of advantages that don't apply to most people: 1) a generous government scheme that basically handed me $24,000 of free money 2) a decent chunk of savings to throw at the down payment 3) parents who helped me with the rest of the down payment 4) being single during the first few years after buying, and then later on 5) ending up in a stable, long-term relationship with a frugal man who was also basically doing the same thing, where our idea of a great date night is a homemade picnic by the beach 6) personally (and my family also) being in good health with literally zero medical expenses 7) being under 25 and having no dependents to support 8) having come straight out of university and therefore still used to living the scrimping and saving uni life on pocket money and savings from vacation jobs as opposed to a regular paycheck 9) having an extremely secure and stable job with incredible future earning potential, and 10) not being in a toxic work environment and not being subjected to any sort of discrimination at work and therefore being able to actually realize that earning potential very quickly through promotions/payrises every 6-12 months. Reading through your posts, I honestly think you'd struggle to sustain the kind of lifestyle I've described. Here are the red flags I've picked up from what you've mentioned: - a love/hate geek-out relationship with your finances --> you could get trapped in an endless boom/bust cycle depending on whether you met/blew budget - a love of hobbies that will regularly require (expensive) cash outflows --> are you going to be able to cut these if push comes to shove? - you're in what sounds like a serious long-term relationship --> will you need to be putting money aside for a wedding or a baby in the near future? - your girlfriend wants pet(s) that will require (expensive) initial outlays (training, etc) and (expensive) ongoing cash outflows --> once you get a pet, they become a dependent you need to support and at some point, you can't cut pet expenses without doing harm to them - you are not 100% sure you want to stick around in your location in the long-term --> so are you OK with being locked in to this location for at least the next 5 years? - you have a history of being BWM and escaped unscathed by being "very lucky" --> are you sure you have broken free of bad habits enough not to relapse into BWM ways once the pressure starts adding up? You may not be able to count on such luck again - you admit to thinking/knowing buying a house is A Bad Idea but you still want to --> have you really thought about why you want to? Trying asking yourself "why" five times in a row to really get to the bottom of how you're feeling - it's pretty illuminating. Other troubling things you've mentioned that aren't in themselves red flags, but do contain a whole lot of assumptions that I'm not sure you've really thought through: - a not very convincing acknowledgement that renting isn't dead money --> have you considered that tying up all of your capital into a single, illiquid physical asset also has some risks? Particularly because now if anything happens to said physical asset, you bear the costs of maintenance and repair. - it's followed directly by an assumption that buying a house = automatic building of equity value --> are you comfortable that house prices will continue to trend up? At a rate faster than inflation? Faster than the equivalent return you would get for investing the same amount of money in a well-diversified stock portfolio? Are you knowledgeable enough about the market that you aren't going to get emotional and overpay market price for a house? - you mention an impending job change that should be long-term and stable --> the rate of change caused by technology right now is faster than ever before and it's affecting more industries than ever before. Have you really looked ahead at the horizon for your career/company/industry and seriously questioned if this is a reasonable assumption? The point I'm trying to make is that the reason the common advice consists of "you can't afford a $600k house on an $80k salary" is because the sort of lifestyle I just described is simply not sustainable for most people, particularly when you don't have many of the advantages I listed. I couldn't do the same thing again now that I'm older and married, with a cat and a baby on the way. TL;DR: not saying you shouldn't buy a house but you won't be able to do so without some serious trade-offs. Just think through all of those really carefully and make sure you're making the trade-offs that are right for you. If the dream house is that important to you, understand that the first five years or so are going to be really hard, because all of your money is going to get sucked into the mortgage. If the thought of doing it tough for five years just doesn't appeal, understand that you're going to have to compromise on the quality/location of the house in order to not compromise on the quality of your lifestyle. Leng fucked around with this message at 11:37 on Feb 23, 2017 |
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Feb 23, 2017 11:32
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Thanks for that huge post diceman, it's nice to see your thinking more clearly even though we're being slightly dickish to you. Ultimately in your situation what many people do is end up leaving California for more affordable pastures.
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Feb 23, 2017 13:30
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tehDiceman posted:Yes, Irvine.txt for sure. I'm not interested in living in Irvine though, but people generally know where it is so it's a nice landmark to use. Currently we're in the Mission V/Lake Forest/Rancho area, much nicer and less sterile. Lake Forest / RSM / Mission Viejo are certainly better in that aspect. Try saving the difference in your rent vs the actual cost of ownership in the sorts of houses you like. Find a PITI payment calculator, add in HOA, increased utilities, etc, and if you can hack it until the summer without feeling extremely "house poor" then you will both have some down payment saved and can start looking around. You probably won't wind up with your forever home on the first shot.
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Feb 23, 2017 17:10
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Pryor on Fire posted:Thanks for that huge post diceman, it's nice to see your thinking more clearly even though we're being slightly dickish to you. Ultimately in your situation what many people do is end up leaving California for more affordable pastures. This is the real trick if you make less than $200k and want a nice house. Most jobs pay maybe 10-15% less outside of California, but housing costs are 1/3 or 1/4 as much in other states.
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Feb 23, 2017 17:16
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Just leave California. Speaking bluntly, you don't make enough money to do all that poo poo you want and get a 600k house (responsibly) on your 90k salary. You'd have literally no problem pulling this off in the Midwest.
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Feb 23, 2017 17:25
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EAT FASTER!!!!!! posted:Just leave California. Speaking bluntly, you don't make enough money to do all that poo poo you want and get a 600k house (responsibly) on your 90k salary. You'd have literally no problem pulling this off in the Midwest. poo poo, you don't even have to go to the Midwest. There's tons of nice cosmopolitan cities where you're not even giving anything up and houses are still 1/4 price. Houston, Dallas, San Antonio to start.
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Feb 23, 2017 17:32
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