Did you embrace repealing income and social security taxes?
By my calculations, someone in California or New York who earns $150,000 in wages and spends half of that on housing will have $25,000 to live on, which doesn’t seem very doable.
So about $2,100 a month to cover food, transportation and clothing? Although taxes would be less for a family.
If you need a car, get an inexpensive used one. Or lease an economy car. There are car leases available in the $200/month range. https://www.carfax.com/blog/cheap-car-leasing-deals. Cook your own meals instead of eating out. There are vast numbers of Americans who live perfectly fulfilling lives on $2,100 per month after housing costs are taken care of.
It is a matter of priorities and making sacrifices. If you want to prioritize owning over renting on a household income of $150,000 I expect you can make it work with an initial housing budget of 50% of gross income. With a fixed rate mortgage that will slowly drop as your earnings increase.
The idea of living on $2100 a month in high cost California is laughable.
The idea of having a working car for $200 a month in high cost California is even more laughable. Typical registration is $400-$500/year and then insurance is around $2600/yr (full coverage would be required for a lease).
The current California food budget on average is $300/week ($150/week for a single person with no kids).
So, we’re already at $15,600 for food and $5,500 for a car (assuming Ken’s mythical $200/mo lease can be found). That leaves $325 a month for… everything else. That won’t even cover the cost of a medical plan. (Someone earning $150,000 isn’t getting any subsidies or government help with food or medical care.)
Did you embrace repealing income and social security taxes?
By my calculations, someone in California or New York who earns $150,000 in wages and spends half of that on housing will have $25,000 to live on, which doesn’t seem very doable.
So about $2,100 a month to cover food, transportation and clothing? Although taxes would be less for a family.
If you need a car, get an inexpensive used one. Or lease an economy car. There are car leases available in the $200/month range. https://www.carfax.com/blog/cheap-car-leasing-deals. Cook your own meals instead of eating out. There are vast numbers of Americans who live perfectly fulfilling lives on $2,100 per month after housing costs are taken care of.
It is a matter of priorities and making sacrifices. If you want to prioritize owning over renting on a household income of $150,000 I expect you can make it work with an initial housing budget of 50% of gross income. With a fixed rate mortgage that will slowly drop as your earnings increase.
The idea of living on $2100 a month in high cost California is laughable.
The idea of having a working car for $200 a month in high cost California is even more laughable. Typical registration is $400-$500/year and then insurance is around $2600/yr (full coverage would be required for a lease).
The current California food budget on average is $300/week ($150/week for a single person with no kids).
So, we’re already at $15,600 for food and $5,500 for a car (assuming Ken’s mythical $200/mo lease can be found). That leaves $325 a month for… everything else. That won’t even cover the cost of a medical plan. (Someone earning $150,000 isn’t getting any subsidies or government help with food or medical care.)
Someone who is single and earning $150,000 a month doesn't really need to buy a house. Or if they do they can find roommates. That is what I did when I bought my first house when single. I found two roommates who ended up paying the mortgage. That was in Alaska which has always been very high priced.
Someone who is earning $150,000 a month and who has a family will not be paying that much in taxes.
I stand by my contention that the 30% rule used in this article is just that, a rule of thumb. And it becomes less relevant or more flexible for higher incomes. For high earners, keeping housing costs limited to 30% of gross income is more a matter of priorities than a necessity like it might be for lower income earners. Do you prioritize an expensive new car(s) or housing? Do you prioritize international vacations or housing? Do you prioritize frequently eating out in fancy restaurants or housing? Do you prioritize expensive clothing or housing? Do you prioritize private music lessons, sports camps, and private athletic teams for your children or housing? Do you prioritize that expensive fishing boat or RV or housing? etc. etc.
0 x
A fool can throw out more questions than a wise man can answer. -RZehr
Someone who is earning $150,000 a month and who has a family will not be paying that much in taxes.
By my calculations, someone earning that in CA with 2 kids and a wife who doesn’t work will be paying 47.7% in taxes (not including employer’s half of oasdi/medicaid/unemployment).
On the flip side, they should be able to afford most any house on the market.
ohio jones wrote: ↑Sun Jun 16, 2024 2:28 pm Perhaps not, but if they do want to buy one, an annual income of $1.8m should allow them to afford at least a small cottage anywhere in the US.
Buying is just the beginning.
Best to have $100,000 in “reserves” to avoid/delay trouble.
In olden days, banks wanted to see some cash reserves for this reason, say, $1,000.
i’m not sure what’s required today. my “free” advice: $100,000.
0 x
Most or all of this drama, humiliation, wasted taxpayer money could be spared -
with even modest attempt at presenting balanced facts from the start.
Here's a more useful map for data geeks. You can see not only the price of housing, but economic opportunity and many other factors. By state or by zip code.
Bootstrap wrote: ↑Sun Jun 16, 2024 4:47 pm
Here's a more useful map for data geeks. You can see not only the price of housing, but economic opportunity and many other factors. By state or by zip code.
Number of banking institutions (commercial banks, savings institutions and credit unions) per 10,000 residents
Opportunity does not equate to having pointless bank buildings everywhere, particularly when nearly all banking is done online now.
Preschool Enrollment
Percentage of 3- and 4-year-olds attending preschool
This is particularly galling. What’s wrong with 3 year old being at home with mom?
VoterRegistration
Percentage of adults ages 18 and older who are registered to vote [national and state-level only]
I find this particularly offensive - so places with conservative Mennonites and Amish have bad opportunity, because we choose to follow Jesus’ teachings and don’t vote?
ohio jones wrote: ↑Sun Jun 16, 2024 2:28 pm Perhaps not, but if they do want to buy one, an annual income of $1.8m should allow them to afford at least a small cottage anywhere in the US.
Buying is just the beginning.
Best to have $100,000 in “reserves” to avoid/delay trouble.
In olden days, banks wanted to see some cash reserves for this reason, say, $1,000.
i’m not sure what’s required today. my “free” advice: $100,000.
I would suggest that having $100,000 in cash reserves AFTER you have finished buying a house will exclude anyone not wealthy from the housing market. And pretty much anyone young looking to buy their first home.
0 x
A fool can throw out more questions than a wise man can answer. -RZehr
ohio jones wrote: ↑Sun Jun 16, 2024 2:28 pm Perhaps not, but if they do want to buy one, an annual income of $1.8m should allow them to afford at least a small cottage anywhere in the US.
Buying is just the beginning.
Best to have $100,000 in “reserves” to avoid/delay trouble.
In olden days, banks wanted to see some cash reserves for this reason, say, $1,000.
i’m not sure what’s required today. my “free” advice: $100,000.
I would suggest that having $100,000 in cash reserves AFTER you have finished buying a house will exclude anyone not wealthy from the housing market. And pretty much anyone young looking to buy their first home.
i believe you misunderstand.
To begin, i didn’t create or vote for this outrageous economy/culture that’s not only toxic for everyone, but increasingly cost-prohibitive to most. My advice is to the young and old.
If you don’t have substantial reserves going in, renting is probably better. Josh has described how rough renting is many times, i agree. The situation is pretty hopeless for a whole lot of people. Politicians promise things will get worse, and we’re to embrace it.
Go ahead and buy - if you can. Live like paupers. Don’t be surprised if bankruptcy is in your future.
0 x
Most or all of this drama, humiliation, wasted taxpayer money could be spared -
with even modest attempt at presenting balanced facts from the start.
