161–170 of 192 posts
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It would be $200K, but 20% is a pretty standard down payment. Yes, it would take a while to save up that much, which is why housing around here isn't affordable, but it's also pretty standard.
$1.2M * 0.2 = $240k. No one I know in the Bay Area who has bought a home in the last ~8 years has been able to scrape together 20%, everyone puts down less and gets PMI.
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Not in SV. $400k gets you to the lower middle class. That is you probably have a tiny chance of buying some real estate in your lifetime. House and expenses related to maintaining it is a huge chunk of change.
Don't kid yourself. Even here in the Bay Area, $400K a year is still upper middle class. You'd be in the top 3% of earners across the nine bay area counties.
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What does any of what you wrote have to do with whether or not it's savings. You're just saying you think some forms of savings are better than others.
I'm responding to the last sentience where you says person #2 was better because he was paying off the mortgage.
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Making $10k/yr allows you to do very little. Make $50k/yr allows you to do more, but still not a lot. Making $100k/yr opens some doors you didn't have access to before. Making $200k/yr puts you in pretty good comfort overall, but doesn't enable you to go get that supercar/yacht/private jet you wanted Making $300k/yr-$500k/yr probably puts you in $1m home, $200k supercar territory depending on how badly you want to st…
In your experience, do people really inflate lifestyles like that? Doesn't 5 years at a high income level less mean "more stuff" and more mean "you can save to never work again". You need to earn 500k for a handful of years, save vigorously, and you're done. Am I missing something? I have seen both sides up close so I guess it's more a rhetorical question, but it's not pretty when you didn't save that 300k and approa…
How many people make $500k/yr, but live like they make $80k/yr?
Lifestyle inflation is a real thing. Even if you aren't just accumulating junk, you aren't going to live in a bad neighborhood if you don't have to, right? Might want to start buying organic food, might want to drive a nicer car and wear nicer clothes?
The richer you get, the definition of "nicer" changes.
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According to [1] average income in SV is $140k, and median house price is $1.2M. $400k income would put you into upper middle class territory. [1] https://sf.curbed.com/2019/2/19/18229922/silicon-valley-inde...
140k is believable, but I think they mean it's per person. If you rent, it's very unlikely you'd be able to buy a 1.2M house on 140k if you started with 0 in savings. EDIT: To clarify my previous post - I was talking about the household income.
https://siliconvalleyindicators.org/data/economy/income/hous...
I agree that it might be tough to buy a median house with median income in some areas, however you can easily afford to buy a decent house almost anywhere with $400k income.
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This doesn't make any sense -- paying down debt instead of SPENDING the money increases net worth and is ultimately the same as socking money into a savings account if you're debt-free.
If your car dies and you can't get to work you can use your savings to fix your car so you can keep earning money. Paying down your debt MAY increase the likelihood that you can borrow again. In the long term not paying interest on it will increase your income over time certainly but in the short term decreased debt and increased savings aren't interchangeable.
We make a little over $500K and I would not say we are struggling day to day, but we won't have so much saved as people expect. We lead a modest life (live in an apt, drive a compact) and live in SV. Monthly House rent is $3000, Kids schools is $2400, kids activities is $2000, groceries and eating out is $1500, travel expenses averaged is $1000, misc expenses (gas,utils,shopping,car maint) is $2000. We do not have an…
After your expenses, you still have 28k (post tax $ per month) - 12 (added all your expenses) ~ 16k per month = 192k per annum. 192 - 38 - 15 = 139k still left after taxes, expenses, 401k, and 529. Isn't that a really huge number?
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Rich is when you have a high income. Wealthy is when you have a high net worth. I find people often confuse the two and it took me a long time to clear up in my mind. You can be rich, but live paycheck to paycheck. Even be superbly in debt. Lots of upper middle class lives this way. You can also be wealthy but poor. These are folks with cashflow problems and a lot of illiquid wealth (like a house you can’t sell) Shor…
> You can be rich, but live paycheck to paycheck. Even be superbly in debt. Lots of upper middle class lives this way. Are they actually upper middle class (by definition) if they have a low net worth?
You might also be surprised to learn that a $166,000/year household income puts you in the top 5% of US households. Definitely upper middle class but still pretty easy to burn your whole paycheck every month.
"Some of these payments are applied to the principal on their loans, which increases the couple’s net worth by either building their home equity or by reducing their student debt. So that’s also savings." I don't count paying down a debt as "savings". It might be an increase in net worth but not savings. If paying down debt is considered "savings" now, then the entire USA is "saving money". But I think that not only…
It absolutely is savings. Compare two people: Person #1 - Makes $6000/month - Has an interest-only mortgage payment of $1000/month (yes it's still possible to get interest-only mortgages) - All other expenses are $4000/month - Puts $1000/month in a savings account Person #2 - Makes $6000/month - Has a mortgage payment of $1000 interest + $1000 principal = $2000/month - All other expenses are $4000/month Person #1 and…
You show the change in net worth, but they're saying that they see savings as different and I get what they mean.
Person 2 in your example has the same net worth but not the same access to the money. If a sudden bill comes in then being $2k lower in my debt vs $2k in a savings account are functionally very different.
That's not to say one is right or wrong, but they are different.
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> You can be rich, but live paycheck to paycheck. Even be superbly in debt. Lots of upper middle class lives this way. Are they actually upper middle class (by definition) if they have a low net worth?
Imho middle class means you work for a living, upper class means you can live on wealth. You might also be surprised to learn that a $166,000/year household income puts you in the top 5% of US households. Definitely upper middle class but still pretty easy to burn your whole paycheck every month. https://en.wikipedia.org/wiki/Upper_middle_class
I thought that's what working class meant.