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> “We make over $1m between us, but we can’t afford a house,” said a woman in her 50s who works in digital marketing for a major telecoms corporation If you ma

> “We make over $1m between us, but we can’t afford a house,” said a woman in her 50s who works in digital marketing for a major telecoms corporation If you make $1m/yr and are scraping by, I don't care where you live, you're terrible at managing money.

AstralStorm 10y ago
It takes quite a lot of money or major tricks in some places to actually save anything. Tricks like buying out of the super expensive area, meaning paying in time. Plus they probably want a house in San Francisco itself, which has hyperinflated housing prices. She didn't say it was their net income either.
undersuit 10y ago
I wanted to fight you one this. I went out and found how much a couple in the SV making a million a year would take home every month. It's about $33k. My only friends that make that much money work in tech. $33k is a comfy yearly salary in Montana.
- reefoctopus 10y ago
  33k per month take home on 1 million per year would mean the tax rate is over 60%. There is no way that's right.
  - phil21 10y ago
    Sounds pretty close to me, why would you think that's far off for a $1M/yr couple in CA? Certainly within 10%. High W2 income earners are heavily taxed in the US.
    - flukus 10y ago
      That would be almost the highest tax rate in the world.
      - phil21 10y ago
        I looked and the 40% federal rate kicks in at $500k, I thought it was lower. So you're more correct than I am. 45-50% is a better total estimate for a total tax rate. The last dollar made is taxed at 53% (40% federal, 13% CA), so that's why the 60% number didn't sound horribly off. This is also ignoring FICA and SS taxes, which it's far too late to do the math on :)
        Symbiote 10y ago
        Is there an online calculator, or is it too complicated for this to be a free service? Someone earning £1,000,000 in the UK would pay 46% tax. https://listentotaxman.com/1000000 https://listentotaxman.com/1000000
bootload 10y ago
"I don't care where you live, you're terrible at managing money." Not necessarily. Everything in SF/Bay Area will require a compromise. Want to save on real-estate? You will pay in time traveled. Want to save on travel, you pay for somewhere to live. Either way you loose. For all the hi-tech in these companies the question should be asked, "Why do you have to come to work to do your job?" Is it necessary every day?
- tradersam 10y ago
  You could live in an SF penthouse and drive a Ferrari to work in Oakland everday if you make $1m/yr.
  - bootload 10y ago
    "if you make $1m/yr" I'm pretty sure you'd be able to live in most large cities like a king for USD1M. What is the traffic and parking like?
exclusiv 10y ago
So true. And the notion that you must own a home is stupid anyway and oversold. I currently pay $4500/mo to rent a home in California. Because of it's location, the home would cost $2M+ for me to buy. So the debt service / maintenance / taxes is way more than the rental income. You're either renting the house or renting the money (mortgage). The idea that you're throwing money away on rent never considers the gap between rental income and expenses, vaporized down payments and going underwater from falling prices, tax hikes, etc. I'll probably move into a smaller house soon because I don't need as much space and I've been buying investment homes instead of worrying about my primary residence. My first investment property pays the mortgage and makes money. It's increased in value too but I don't bank on that. Why buy a home you cannot rent out for more than the debt service? Also - why buy a starter home in California for $1M+. That's fundamentally messed up to spend that much on a home that you know for a fact is not your forever home. The only way to know if it's a good deal is if you can rent it out for more than it costs, or about the same and you're going to be there for ~7 yrs+.
- dikdik 10y ago
  So your landlord is losing money by renting it to you? This doesn't make any sense to me...
  - ThrustVectoring 10y ago
    They expect to make money on the appreciation of the house's value.
  - sagarm 10y ago
    They probably have a massive prop 13 subsidy.
    - exclusiv 10y ago
      Yeah it's in a family trust and they haven't done any major renovations. Taxes are lower than they should be. But even if taxes were zero, it still wouldn't make sense to buy this place for 2M+ when rent is only 4500. For 4500 rent you need to be around 900k max purchase price. If it's an investment it should be way less, like 450k. I've rented 4 different homes in Cali and 3 were owned by family trusts. The one that wasn't made nothing and she ended up selling to get out. I rented that house for $3600/mo and she got 925k for it.
gydfi 10y ago
Journalists love writing this same article over and over again. Find some humble bragging buffoon willing to get quoted as talking about how hard it is to get by on some large amount of money, then farm the sputtering outrage of the readership for clicks. I've never seen it done with a seven-figure income though.

AstralStorm 10y ago

It takes quite a lot of money or major tricks in some places to actually save anything. Tricks like buying out of the super expensive area, meaning paying in time. Plus they probably want a house in San Francisco itself, which has hyperinflated housing prices. She didn't say it was their net income either.

undersuit 10y ago

I wanted to fight you one this. I went out and found how much a couple in the SV making a million a year would take home every month. It's about $33k. My only friends that make that much money work in tech. $33k is a comfy yearly salary in Montana.

reefoctopus 10y ago
33k per month take home on 1 million per year would mean the tax rate is over 60%. There is no way that's right.
- phil21 10y ago
  Sounds pretty close to me, why would you think that's far off for a $1M/yr couple in CA? Certainly within 10%. High W2 income earners are heavily taxed in the US.
  - flukus 10y ago
    That would be almost the highest tax rate in the world.
    - phil21 10y ago
      I looked and the 40% federal rate kicks in at $500k, I thought it was lower. So you're more correct than I am. 45-50% is a better total estimate for a total tax rate. The last dollar made is taxed at 53% (40% federal, 13% CA), so that's why the 60% number didn't sound horribly off. This is also ignoring FICA and SS taxes, which it's far too late to do the math on :)
      - Symbiote 10y ago
        Is there an online calculator, or is it too complicated for this to be a free service? Someone earning £1,000,000 in the UK would pay 46% tax. https://listentotaxman.com/1000000 https://listentotaxman.com/1000000

bootload 10y ago

"I don't care where you live, you're terrible at managing money." Not necessarily. Everything in SF/Bay Area will require a compromise. Want to save on real-estate? You will pay in time traveled. Want to save on travel, you pay for somewhere to live. Either way you loose. For all the hi-tech in these companies the question should be asked, "Why do you have to come to work to do your job?" Is it necessary every day?

tradersam 10y ago
You could live in an SF penthouse and drive a Ferrari to work in Oakland everday if you make $1m/yr.
- bootload 10y ago
  "if you make $1m/yr" I'm pretty sure you'd be able to live in most large cities like a king for USD1M. What is the traffic and parking like?

exclusiv 10y ago

So true. And the notion that you must own a home is stupid anyway and oversold. I currently pay $4500/mo to rent a home in California. Because of it's location, the home would cost $2M+ for me to buy. So the debt service / maintenance / taxes is way more than the rental income. You're either renting the house or renting the money (mortgage). The idea that you're throwing money away on rent never considers the gap between rental income and expenses, vaporized down payments and going underwater from falling prices, tax hikes, etc. I'll probably move into a smaller house soon because I don't need as much space and I've been buying investment homes instead of worrying about my primary residence. My first investment property pays the mortgage and makes money. It's increased in value too but I don't bank on that. Why buy a home you cannot rent out for more than the debt service? Also - why buy a starter home in California for $1M+. That's fundamentally messed up to spend that much on a home that you know for a fact is not your forever home. The only way to know if it's a good deal is if you can rent it out for more than it costs, or about the same and you're going to be there for ~7 yrs+.

dikdik 10y ago
So your landlord is losing money by renting it to you? This doesn't make any sense to me...
- ThrustVectoring 10y ago
  They expect to make money on the appreciation of the house's value.
- sagarm 10y ago
  They probably have a massive prop 13 subsidy.
  - exclusiv 10y ago
    Yeah it's in a family trust and they haven't done any major renovations. Taxes are lower than they should be. But even if taxes were zero, it still wouldn't make sense to buy this place for 2M+ when rent is only 4500. For 4500 rent you need to be around 900k max purchase price. If it's an investment it should be way less, like 450k. I've rented 4 different homes in Cali and 3 were owned by family trusts. The one that wasn't made nothing and she ended up selling to get out. I rented that house for $3600/mo and she got 925k for it.

gydfi 10y ago

Journalists love writing this same article over and over again. Find some humble bragging buffoon willing to get quoted as talking about how hard it is to get by on some large amount of money, then farm the sputtering outrage of the readership for clicks. I've never seen it done with a seven-figure income though.