3 ms·
You’re using some pretty aggressive housing numbers but conveniently omitting the part where you’re dumping most of that money into the equity of your million+
by pb7 7y ago
You’re using some pretty aggressive housing numbers but conveniently omitting the part where you’re dumping most of that money into the equity of your million+ dollar home so that if and when you want to quit the rat race, you still have massive assets to take with you.
- tempsy 7y agoReal estate prices in places like SF or LA have plateaued a bit for a few years now, so yes while you're increasing your equity in your home it's not clear anymore where housing prices are headed at this point.
- pb7 7y agoEven if your home value doesn't increase whatsoever, you are still progressing dumping a higher and higher percentage of your monthly housing-related payments into the equity (payments are interest-heavy early on, shifting to principal-heavy later on). In 15-30 years, you have a paid off house that's worth what you bought it for which can be millions. Or you can leave in a handful of years and take the 100,000s of equity with you that will buy you house in cash in most of the country. Either way, you're hardly worse off.
- tempsy 7y agoIn the first few years you're converting a small percentage of that $8K payment into equity...most of it goes to interest, insurance, HOA, property taxes, etc. With the SALT restrictions you can't write off more than $10K in state taxes now either, which means basically $0 off your property taxes since that your income tax alone in CA will be more than that.