4 ms·

You're expecting to have a 47% savings rate, and at the same time refuse to make any concession in how you're living (get a studio, pick a lower cost area, get

You're expecting to have a 47% savings rate, and at the same time refuse to make any concession in how you're living (get a studio, pick a lower cost area, get roommates). I think that's a very high bar for defining "live well".

deleted 8y ago
[deleted]
closeparen 8y ago
The goal was to achieve baseline middle-class financial health norms (homeownership, retirement). The savings rate that requires turned out to be astronomical. That's my point. Try another scenario: Madison, WI, where entry-level pay is $80k and the median home is $250k. 4702 income (717) 15% 401k contribution discounted by marginal tax rate (700) savings goal of $50k in six years for a down payment (1017) 1-bedroom rent ------- 2268 left to spend SF is a very significant lifestyle sacrifice. In a more reasonable market, you could afford baseline middle-class financial health, median-quality living arrangements, and some luxury spending all at the same time. In SF it's "pick at most two." Obviously that's still enough for a lot of people (myself included) or we wouldn't be doing it. But in normal places, those are not tradeoffs that people making even half our incomes need to face. And sure, SF has urban amenities that Madison doesn't, but if you live in a premium location with lots of shops in walking distance, you can't afford to shop at them. At least not on $6,000/mo.
- librish 8y ago
  This is only true because you've defined homeownership in your current job market as a necessity. If you either forgo it, or choose to save for a mortgage in another area suddenly SF comes out way on top.
  - closeparen 8y ago
    You could have even more to spend by foregoing retirement savings, but would you? If you did, how would it feel? Living large on an irresponsible budget is not the same as living well. Or are you saying renting as a long-term plan actually is healthy/responsible? Maybe I have just internalized too much American Dream propaganda. But with SF's rate of rent and price growth, the calculators say "buy even if renting is free."

deleted 8y ago

[deleted]

closeparen 8y ago

The goal was to achieve baseline middle-class financial health norms (homeownership, retirement). The savings rate that requires turned out to be astronomical. That's my point. Try another scenario: Madison, WI, where entry-level pay is $80k and the median home is $250k. 4702 income (717) 15% 401k contribution discounted by marginal tax rate (700) savings goal of $50k in six years for a down payment (1017) 1-bedroom rent ------- 2268 left to spend SF is a very significant lifestyle sacrifice. In a more reasonable market, you could afford baseline middle-class financial health, median-quality living arrangements, and some luxury spending all at the same time. In SF it's "pick at most two." Obviously that's still enough for a lot of people (myself included) or we wouldn't be doing it. But in normal places, those are not tradeoffs that people making even half our incomes need to face. And sure, SF has urban amenities that Madison doesn't, but if you live in a premium location with lots of shops in walking distance, you can't afford to shop at them. At least not on $6,000/mo.

librish 8y ago
This is only true because you've defined homeownership in your current job market as a necessity. If you either forgo it, or choose to save for a mortgage in another area suddenly SF comes out way on top.
- closeparen 8y ago
  You could have even more to spend by foregoing retirement savings, but would you? If you did, how would it feel? Living large on an irresponsible budget is not the same as living well. Or are you saying renting as a long-term plan actually is healthy/responsible? Maybe I have just internalized too much American Dream propaganda. But with SF's rate of rent and price growth, the calculators say "buy even if renting is free."