4 ms·

If you're paying down a $1.7 million mortgage like mentioned in the article, it may feel like you have nothing left at the end of the month, but a lot of that m

by pavlov 4y ago

If you're paying down a $1.7 million mortgage like mentioned in the article, it may feel like you have nothing left at the end of the month, but a lot of that money goes into an asset that is almost guaranteed to appreciate over the 30-year period. So clearly these home-owning Americans making $250k/year are not actually living paycheck-to-paycheck in the usual meaning, since they're going to be multimillionaires in a few decades. Maybe the main problem here is that too much of their net worth is tied into a single asset.

roflyear 4y ago
It really depends. Higher cost homes are tricky. Often hard to sell. Often they do not appreciate as much as your average home. I would say $1.7m is probably on the edge of this category tho.
- bombcar 4y ago
  In some places $1.7m is a median priced home. The usual rule of thumb is don't be too far from the median house in the area, either below or above, but if you have to miss aim below.
  - roflyear 4y ago
    In very, very, very few places is that the median price for a home.
ivanche 4y ago
I agree. All tied into a single, non-cash-flow generating asset is risky, to say the least. And it will really be an asset only when they sell it. Until then, they only pour more and more money into a bottomless pit that a house is. EDIT: for $250,000/year income, the most expensive house one can afford is $750,000. Their $1.7 million house is way above their means.
pessimizer 4y ago
It's not only strange that these sort of stories are coming back after being so brutally mocked a few years ago, but again the examples have a large part of their huge monthly nut going into their savings, retirement accounts, and assets (mortgages.)
breakds 4y ago
The home I live in is viewed as a consumption instead of investment to me. I would try to really limit my expense on buying the primary residency home, and if there are $ left, invest them.

by pavlov 4y ago

roflyear 4y ago

It really depends. Higher cost homes are tricky. Often hard to sell. Often they do not appreciate as much as your average home. I would say $1.7m is probably on the edge of this category tho.

bombcar 4y ago
In some places $1.7m is a median priced home. The usual rule of thumb is don't be too far from the median house in the area, either below or above, but if you have to miss aim below.
- roflyear 4y ago
  In very, very, very few places is that the median price for a home.

ivanche 4y ago

I agree. All tied into a single, non-cash-flow generating asset is risky, to say the least. And it will really be an asset only when they sell it. Until then, they only pour more and more money into a bottomless pit that a house is. EDIT: for $250,000/year income, the most expensive house one can afford is $750,000. Their $1.7 million house is way above their means.

pessimizer 4y ago

It's not only strange that these sort of stories are coming back after being so brutally mocked a few years ago, but again the examples have a large part of their huge monthly nut going into their savings, retirement accounts, and assets (mortgages.)

breakds 4y ago

The home I live in is viewed as a consumption instead of investment to me. I would try to really limit my expense on buying the primary residency home, and if there are $ left, invest them.