5 ms·

Mostly agree but houses are really expensive around here, significantly more expensive than 10 years ago. If you have a family and need a decent amount of space

Mostly agree but houses are really expensive around here, significantly more expensive than 10 years ago. If you have a family and need a decent amount of space then your options are either buy > $1million house (at minimum) or live very far away and have an in sufferably long commute. New grads are pretty fcked tbh unless housing supply increases fast or they just stay in apartments. There is a balance between overspending and forcing yourself to live uncomfortably just to save money. Maxing out roth ira isn't that helpful for this situation given there is a 10% early withdraw penalty

sharker8 4y ago
Rent is still less than 1/3 of post tax income most places if you have a high paying tech job. Also you can always downsize on stuff to save on floorspace.
- uptownfunk 4y ago
  Yeah I rent in a neighborhood and my rent is a third of the equivalent mortgage. The downside is that you miss out on the annual appreciation. If you invest what you save in paying down a mortgage the market you can actually make more than what you’d make on the rental appreciation. Still I think there’s an intangible value to owning your own house and keeping that in the family, especially once you have kids / grandkids.
  - granshaw 4y ago
    Not to mention being in control of what you can do and when you move (if ever)
- coolbreezetft22 4y ago
  Yeah that's the point - new families now have to either: a) rent b) downsize significantly c) stretch their budget. While 6-10 years ago a house in Sammammish or Issaquah was easily attainable
2devnull 4y ago
Why should everybody get a house and not have a 2 hour commute? It was the norm for the past few decades, and so your post just reinforces the prior post, except the Roth IRA thing. You can save without an IRA.
- coolbreezetft22 4y ago
  Yeah, everyone sitting comfortably in their big house in a nice neighborhood close to work that they got when it was reasonable to do so can now sit back and lecture others: "why do you need such an expensive house and less than two hour commute?! Just don't have kids and rent an apartment!"
- _huayra_ 4y ago
  The real question is why can't we get much denser housing (e.g. condos) and a smaller commute. At least for Seattle, it seems like the liability for the builder and the costs don't really justify building for less than some un-sellable amount (e.g. $1k / sqft) [0] [0] https://www.reddit.com/r/SeattleWA/comments/wnkwvp/comment/ik6f09c/?utm_source=share&utm_medium=web2x&context=3 https://www.reddit.com/r/SeattleWA/comments/wnkwvp/comment/i...
  - 2devnull 4y ago
    That is a good question. Not terribly hard to answer either. Things in America cost a lot. Labor costs a lot. Everyone needs a livable wage and good health care, even carpenters. Wood costs a lot, and it should because trees take a long time to grow and deforestation accelerates climate change. And regarding climate change, energy costs a lot and it should because if it didn’t, then there would be more even more climate change. So that’s the answer to the question of why can’t everyone own a home and not commute. It is because we care more about workers and the environment and have chosen to give those issues the highest priority. And if you don’t like that, it’s a free country; there is more affordable housing in states where people care less about workers and the environment. Ironically, many of those states are actually better places for workers and the environment, but that wasn’t the question.
  - telotortium 4y ago
_huayra_ 4y ago
The point is not that the roth ira is a useful savings vehicle for one's emergency fund, but that it's a good idea to think of the extra FAANG / MAGAM (whatever the acronym is now) money one gets on top of a non-MAGAM developer job should basically be treated as if it doesn't exist, and therefore socked away in the extremely useful retirement savings vehicle of the mega backdoor Roth IRA (which I know at least Microsoft offers). This treatment of the "MAGAM bonus" as such allows one to be able to downsize to a less-well-compensated dev job if one has to (e.g. layoffs, then go work for some non-software-first company like in automotive, consumer products, etc). Most developer salaries put them well above the IRA limits, so having the option to save post-tax dollars in a Roth (which also has no RMDs, unlikely regular 401ks and IRAs) is a rare opportunity.
- coolbreezetft22 4y ago
  In Seattle where so many people have been earning so much this doesn't really work out unless you're a dual-income couple or don't have kids and don't need much space. The house prices here have been driven up so much even modest houses are going to be a good chunk of your income if you're a single earning household. You pretty much have to use your RSUs to get a downpayment.
  - _huayra_ 4y ago
    That's true, any of my colleagues who have bought houses recently were dual-tech DINK and had to sell off a bunch of RSUs. Single-income folks just have to wait it out and hope prices come down, or just give up the narrow search and get some place in Tacoma :/

sharker8 4y ago

Rent is still less than 1/3 of post tax income most places if you have a high paying tech job. Also you can always downsize on stuff to save on floorspace.

uptownfunk 4y ago
Yeah I rent in a neighborhood and my rent is a third of the equivalent mortgage. The downside is that you miss out on the annual appreciation. If you invest what you save in paying down a mortgage the market you can actually make more than what you’d make on the rental appreciation. Still I think there’s an intangible value to owning your own house and keeping that in the family, especially once you have kids / grandkids.
- granshaw 4y ago
  Not to mention being in control of what you can do and when you move (if ever)
coolbreezetft22 4y ago
Yeah that's the point - new families now have to either: a) rent b) downsize significantly c) stretch their budget. While 6-10 years ago a house in Sammammish or Issaquah was easily attainable

2devnull 4y ago

Why should everybody get a house and not have a 2 hour commute? It was the norm for the past few decades, and so your post just reinforces the prior post, except the Roth IRA thing. You can save without an IRA.

coolbreezetft22 4y ago
Yeah, everyone sitting comfortably in their big house in a nice neighborhood close to work that they got when it was reasonable to do so can now sit back and lecture others: "why do you need such an expensive house and less than two hour commute?! Just don't have kids and rent an apartment!"
_huayra_ 4y ago
The real question is why can't we get much denser housing (e.g. condos) and a smaller commute. At least for Seattle, it seems like the liability for the builder and the costs don't really justify building for less than some un-sellable amount (e.g. $1k / sqft) [0] [0] https://www.reddit.com/r/SeattleWA/comments/wnkwvp/comment/ik6f09c/?utm_source=share&utm_medium=web2x&context=3 https://www.reddit.com/r/SeattleWA/comments/wnkwvp/comment/i...
- 2devnull 4y ago
  That is a good question. Not terribly hard to answer either. Things in America cost a lot. Labor costs a lot. Everyone needs a livable wage and good health care, even carpenters. Wood costs a lot, and it should because trees take a long time to grow and deforestation accelerates climate change. And regarding climate change, energy costs a lot and it should because if it didn’t, then there would be more even more climate change. So that’s the answer to the question of why can’t everyone own a home and not commute. It is because we care more about workers and the environment and have chosen to give those issues the highest priority. And if you don’t like that, it’s a free country; there is more affordable housing in states where people care less about workers and the environment. Ironically, many of those states are actually better places for workers and the environment, but that wasn’t the question.
- telotortium 4y ago

_huayra_ 4y ago

The point is not that the roth ira is a useful savings vehicle for one's emergency fund, but that it's a good idea to think of the extra FAANG / MAGAM (whatever the acronym is now) money one gets on top of a non-MAGAM developer job should basically be treated as if it doesn't exist, and therefore socked away in the extremely useful retirement savings vehicle of the mega backdoor Roth IRA (which I know at least Microsoft offers). This treatment of the "MAGAM bonus" as such allows one to be able to downsize to a less-well-compensated dev job if one has to (e.g. layoffs, then go work for some non-software-first company like in automotive, consumer products, etc). Most developer salaries put them well above the IRA limits, so having the option to save post-tax dollars in a Roth (which also has no RMDs, unlikely regular 401ks and IRAs) is a rare opportunity.

coolbreezetft22 4y ago
In Seattle where so many people have been earning so much this doesn't really work out unless you're a dual-income couple or don't have kids and don't need much space. The house prices here have been driven up so much even modest houses are going to be a good chunk of your income if you're a single earning household. You pretty much have to use your RSUs to get a downpayment.
- _huayra_ 4y ago
  That's true, any of my colleagues who have bought houses recently were dual-tech DINK and had to sell off a bunch of RSUs. Single-income folks just have to wait it out and hope prices come down, or just give up the narrow search and get some place in Tacoma :/