3 ms·

Even in the Bay Area you can get a decent apartment or home mortgage for $40-70k a year. Taxes on $200k are gonna be less than $25k. Parking and gas are a few h

Even in the Bay Area you can get a decent apartment or home mortgage for $40-70k a year. Taxes on $200k are gonna be less than $25k. Parking and gas are a few hundred at most, food might be as high as $1000 if you've got a big family or eat out a lot. Let's guess high and say another few thousand for utilities, phones, etc. Let's also say you've got some family health crises your insurance won't cover that run to $10k out of pocket. That leaves you at least $90,000 free and clear. If you can't live comfortably and save for retirement with ninety grand a year, you either have some outstanding expenses (severe medical disability, etc.), or you're making some very bad decisions.

cannonedhamster 7y ago
I literally just looked at home prices in the bay area. I found a literal handful of homes/apartments available in that price range. One was a 300 sq foot apartment, most of the rest were unbuilt lots. I'm not sure if you're talking about auctions or foreclosures, etc. Can you elaborate on that? I can't even get a home in my much lower cost area for that price. I can tell you $1k/month for a family of three in my area is typical grocery expenses before eating out. We can certainly cut back but bargain basement is about $800/month unless we're eating nothing but ramen and cereal.
- deathanatos 7y ago
  I interpreted the $40-$70k/yr ($3.3-$5.8/mo) figure as the cost of the mortgage, not the home. This should correspond to a roughly $1M loan, which, with a downpayment of around $200-$300k (the cost of a house elsewhere…) gets close to $1.3M, which pretty nearly the median list for much of the Bay Area (corresponding to ~1200 sqft in SF). On the lower end ($40k/yr or $3.3k/mo), you should be able to find a studio in SF for that or for a bit more, a 1 bedroom (median 1 bed is ~$3.6k/mo in SF). (I'm not saying that's good, just that it shouldn't be as bad as you think.)
- PhasmaFelis 7y ago
  I'm talking about the yearly rental rate/mortgage payment. This is my main source: https://smartasset.com/mortgage/what-is-the-cost-of-living-in-san-francisco https://smartasset.com/mortgage/what-is-the-cost-of-living-i... It's possible I lowballed some things, but see my other comment. https://news.ycombinator.com/item?id=20415130 https://news.ycombinator.com/item?id=20415130
  - hellisothers 7y ago
    Taxes and insurance on that 1.3m house are going to be another $2800/mo I say from experience. Living here is much more expensive than you’re guessing, cost of living needs to be factored in.
deathanatos 7y ago
> Taxes on $200k are gonna be less than $25k. No, no they're not. I make less than $200k, and I paid an effective tax of ~25% last year. (CA's state income taxes are pretty high.) Extrapolating to $200k, I'd pay ~$50k in tax. > food might be as high as $1000 Way too low. Finding lunch in SF is easily $10/meal, especially with the extra surcharges a lot of restaurants (and I mean that in the "fast lunch eatery" sense, not the "host-seats-you-at-nice-table" type, though those too) are now charging. I'm doing ~$4k/yr on food for two, and we rarely eat out. I think your point is sound, but I think you're going to have closer to $60-$65k/yr. You also need to account for PMI & taxes on any home purchase. (The PMI will likely depend on how much you've got. Most people who are looking to buy homes probably won't have enough as they're too young, IMO, but then, they're also probably not experienced enough to pull $200k, unless maybe they're in a nice spot at a FAANG, but not everyone is.) You do mention this, but 401(k) savings is going to further reduce that, you probably want to put some in an investment too, and I think you'll find that $60k disappears rather quickly.
- PhasmaFelis 7y ago
  Yeah, I may have missed some things and lowballed some others. Let's add an extra 50 grand to the yearly expenses to cover anything I may have missed. I would still say that $40k/year free and clear after all bills and major expenses are paid is not "lower class" by any reasonable definition, as thatfrenchguy implied.

cannonedhamster 7y ago

I literally just looked at home prices in the bay area. I found a literal handful of homes/apartments available in that price range. One was a 300 sq foot apartment, most of the rest were unbuilt lots. I'm not sure if you're talking about auctions or foreclosures, etc. Can you elaborate on that? I can't even get a home in my much lower cost area for that price. I can tell you $1k/month for a family of three in my area is typical grocery expenses before eating out. We can certainly cut back but bargain basement is about $800/month unless we're eating nothing but ramen and cereal.

deathanatos 7y ago
I interpreted the $40-$70k/yr ($3.3-$5.8/mo) figure as the cost of the mortgage, not the home. This should correspond to a roughly $1M loan, which, with a downpayment of around $200-$300k (the cost of a house elsewhere…) gets close to $1.3M, which pretty nearly the median list for much of the Bay Area (corresponding to ~1200 sqft in SF). On the lower end ($40k/yr or $3.3k/mo), you should be able to find a studio in SF for that or for a bit more, a 1 bedroom (median 1 bed is ~$3.6k/mo in SF). (I'm not saying that's good, just that it shouldn't be as bad as you think.)
PhasmaFelis 7y ago
I'm talking about the yearly rental rate/mortgage payment. This is my main source: https://smartasset.com/mortgage/what-is-the-cost-of-living-in-san-francisco https://smartasset.com/mortgage/what-is-the-cost-of-living-i... It's possible I lowballed some things, but see my other comment. https://news.ycombinator.com/item?id=20415130 https://news.ycombinator.com/item?id=20415130
- hellisothers 7y ago
  Taxes and insurance on that 1.3m house are going to be another $2800/mo I say from experience. Living here is much more expensive than you’re guessing, cost of living needs to be factored in.

deathanatos 7y ago

> Taxes on $200k are gonna be less than $25k. No, no they're not. I make less than $200k, and I paid an effective tax of ~25% last year. (CA's state income taxes are pretty high.) Extrapolating to $200k, I'd pay ~$50k in tax. > food might be as high as $1000 Way too low. Finding lunch in SF is easily $10/meal, especially with the extra surcharges a lot of restaurants (and I mean that in the "fast lunch eatery" sense, not the "host-seats-you-at-nice-table" type, though those too) are now charging. I'm doing ~$4k/yr on food for two, and we rarely eat out. I think your point is sound, but I think you're going to have closer to $60-$65k/yr. You also need to account for PMI & taxes on any home purchase. (The PMI will likely depend on how much you've got. Most people who are looking to buy homes probably won't have enough as they're too young, IMO, but then, they're also probably not experienced enough to pull $200k, unless maybe they're in a nice spot at a FAANG, but not everyone is.) You do mention this, but 401(k) savings is going to further reduce that, you probably want to put some in an investment too, and I think you'll find that $60k disappears rather quickly.

PhasmaFelis 7y ago
Yeah, I may have missed some things and lowballed some others. Let's add an extra 50 grand to the yearly expenses to cover anything I may have missed. I would still say that $40k/year free and clear after all bills and major expenses are paid is not "lower class" by any reasonable definition, as thatfrenchguy implied.