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You have a home in SF for $765/month? That's ridiculously low. The rest of your expenses are low too, well done.
by MatthewB 15y ago
You have a home in SF for $765/month? That's ridiculously low. The rest of your expenses are low too, well done.
- tomsaffell 15y agoYup, but bear in mind that's between two people ($1300 per month), and after tax break (so looks like $2000 on paper, but is actually only $1300 out of pocket). It's on a 3.75% rate (7 year), and excludes principle repayment (which is not a cost). Includes property tax. So it's very comparable to rent.
- MatthewB 15y agoIm looking for apartments in SF right now and can't find anything (decent) under $1700 for a 1 bed 1 bath. Maybe I just have expensive taste:).
- timr 15y agoNo, he's only counting interest on the loan, and his wife is paying half. It's not even remotely a fair comparison to a single founder living in the city. A more realistic "cheap" lifestyle in SF is probably $2500 a month if you're living on your own. And renting is substantially cheaper than owning here, unless you play stupid accounting games to pretend that you're not actually spending money.
- tomsaffell 15y ago>unless you play stupid accounting games What games would those be? What I did was: a) exclude principal repayments (they are not a cost, they are an investment. They are also entirely optional - any house buyer can take an interest only mortgage). b) factor in the tax advantage (which is actual money in my pocket, either by paying less withholding, or by getting a check from the IRS at the end of the year).
- tomkarlo 15y agoWhile principle repayment is not a cost, it's a cash flow, so you can't exclude it when you're trying to figure out if you can cover your monthly nut. Similarly, you can't include the present value of expected future income from the sale of the business into your current estimate of what expenses you can cover.
- tomsaffell 15y agoPrinciple repayment is optional (when taking a loan). It only makes a small difference to interest rate [1]. So for the purposes of discussing cost minimization, it is legitimate to exclude it. [1] http://www.schwab.com/public/schwab/banking_lending/mortgages/todays_rates?cmsid=P-2266141&lvl1=banking_lending&lvl2=mortgages http://www.schwab.com/public/schwab/banking_lending/mortgage...
- jacques_chester 15y agoPedantic nitpick: Principal is the subject of a loan, or the leader of a school. Principle is an idea that people may hew to and argue about.
- tomsaffell 15y agoCould those who are down voting please explain why.
- marcc 15y agoPretty sure he said that with his wife, household expenses are twice that. Rent is more like 1530. Which is still create for a house in SF.