4 ms·

$250k+ a year means ~$12k monthly salary. A semi decent apartment in SV will cost you ~$3k Bills(phone, internet, electricity, etc) another $1k. If you are m

by noncoml 10mo ago

$250k+ a year means ~$12k monthly salary. A semi decent apartment in SV will cost you ~$3k Bills(phone, internet, electricity, etc) another $1k. If you are married, groceries at least $1k. Even if we assume you don’t do anything else in life, and you are in perfect health best case scenario would be $6k savings a month or $72k a year. It would take you 10 years to save $720k plus whatever you make from investments. That’s not enough to even buy you a house in SV. How are you going to retire? Unless you assume you will get $250k straight out of college and keep up salary raises for 25 years. Sure, if you don’t have kids, age with no health problems, never enjoy anything in life, you may be able to retire at 50 in Thailand or Philippines.

karlgkk 10mo ago
Rent? Ever heard of equity? If you make 250k you can afford a nice condo. Right away that blows a huge hole in your math. Also $1k month on bills? Groceries too? Judging by your inflated costs for everything, and ann idea that a house (versus more modest accommodations) is what the goal is, you’ve got Lifestyle creep. And, things certainly get a lot easier when your spouse also works.
- reactordev 10mo ago
  Bro, not everyone has daddy to give them the down payment to buy anything remotely affordable in SV.
  - karlgkk 10mo ago
    Bro, I can tell you haven’t even tried. Talk to a mortgage advisor.
    - reactordev 10mo ago
      I’ve been trying for the last decade boomer. Housing keeps going up and my salary keeps staying the same. It’s to the point where a 30 year mortgage will take me to 80 years old. Where a down payment would cost me a decade of saving and nothing but saving. No life, no food, no other bills.
      - karlgkk 10mo ago
        I’m not a boomer and the core conditional of this whole thread is that you make $250k a year. If you’re making $250k and you still think what you just said, you are completely incorrect.
- assemblyman 10mo ago
  Renting can be much better financially than buying. Edit: all % numbers are per year Consider the case of condos in cities. If you were to buy outright, you effectively get a return by not paying rent (i.e. paying yourself rent). Rent is usually ~5% of the condo cost. HOA + property taxes is 2-3% so subtract that from the rent return i.e. net return 2-3% (5-2/3%). The rest of the return is appreciation from the underlying real estate prices. I am excluding maintenance costs because they are negligible in condos. On the other hand, if you rent and put the entire amount (that you would have paid to buy the condo), you get ~10% per year. To break even between the two scenarios, you would need real estate prices to grow 7-8% (2-3% + 8-7% = 10%). Beyond this, there are psychological reasons to buy vs rent. Buying - ability to customize the space, peace of mind because of perceived stability etc. Renting - flexibility, peace of mind because of no long-term obligations etc. A mortgage is an interpolation of the two cases at the cost of the interest one pays. It is noteworthy, at least in the US, that for most people, this is the only time they can borrow several hundreds of thousands at relatively low costs.
- noncoml 10mo ago
  Do you live in the Bay Area?
PunchyHamster 10mo ago
why would you would be saving for house and renting at same time ?
- rkomorn 10mo ago
  Because you need to have enough saved for a downpayment?
  - karlgkk 10mo ago
    Well, interest rates are high right now, but you’d be surprised at how little down payment you need for purchasing a house or a condo. If you’re a tech worker with a stable career making that kind of money, most underwriters will just give you the loan. I think people commonly underestimate how accessible this stuff is It’s easy to make a 40 year forecast spreadsheet for retirement, including housing costs, property, taxes, maintenance. Include vacation, budget, food, general cost of living.
    - rkomorn 10mo ago
      I left Silicon Valley 5 years ago. Are people getting $1M+ loans with zero down these days?
      - karlgkk 10mo ago
        No? What? I mentioned Lifestyle creep before but what is with everyone’s fried brains? A small condo in a nice neighborhood in Santa Clara is below $500k. Yes, that’s a lot, and you certainly can get more bang for your buck if you’re willing to do a little commuting. Btw a $1m house is accessible if you make $250k yr, although to be honest, I would highly recommend against it
        rkomorn 10mo ago
        The question I originally responded to was "why would you rent and save for a house at the same time?" I said "because you need to have a downpayment". You reply "downpayments aren't that high". Unless you're getting loans zero down, you literally still need to save to have your downpayment. While you're renting. So where is my brain fried? Even on a $500k condo, you're putting 10% down, you still need to have that saved up. Noticeably more, in fact, because I'm sure you'd agree "lemme sink every saved cent I have into my house downpayment" wouldn't be wise.
tayo42 10mo ago
2k a month for daycare or nursery school lol
CraigJPerry 10mo ago
6k month over the past decade is circa 1.7m today depending on which index fund you chose. Assuming a 4% draw down (conventionally agreed to be safe) is over 5.5k a month.
- lixtra 10mo ago
  The 4% rule is considered safe for a 30 year retirement period. So at 50 you might want to withdraw a little less.
- wakawaka28 10mo ago
  Money has lost about about 10% per year in value for the past 5 years. It used to take like a million dollars to retire, but now it's like double that. In addition, nobody really knows how long they might live or how bad inflation could get. Imagine retiring at 50 only to be wiped out, and maybe still on the hook to pay for your own expenses for another 50 years, plus whoever you have in your life who counts on you.
  - noncoml 10mo ago
    2 millions to retire? Without owning a house? You must be kidding, unless you plan to live only until 60 or move to the cheapest place in the country. Also keep in mind that most health problems start after 50.
    - wakawaka28 10mo ago
      To be fair, if you believe all the usual assumptions, then you can expect to earn 5% on that money. That would turn into $100k annually which is enough to live just about anywhere. Now, if you retire on time, I think this may also be tax free. So it's not that crazy, except for the unknowable inflation part of the puzzle. If inflation is also 5%, then your effective loss is 5% per year, so you'd be down nearly 100% after 20 years. Housing costs are crazy, but if you don't need to work then you can easily move to a cheaper place to save money.
- noncoml 10mo ago
phainopepla2 10mo ago
$2k per month for groceries and utilities for a married couple is insanely high, in any part of the country.
- phantasmish 10mo ago
  We're probably around $1,200 for groceries and related (cleaning stuff, mostly) in our house, but we're a family of five. Yeah I'd say $2k is nuts for just two people, even today. For a long while we managed to stay around $500-600 but that was before COVID inflation. I dunno how the official inflation rate's as low as it is, we don't buy much that'd be considered "luxury" level (we're not buying caviar, say, and rarely even get stuff like the grass-fed "fancy" butter [actually yellow instead of white, tastes like something rather than just having texture but no flavor] instead of the cheapest available) and I'm pretty sure we buy a lot less meat per person than the US average, but if we fill up a cart now it's like $250-$300. I've hit $150 on small shopping trips where I didn't even fully fill one of the smaller, short carts.
  - noncoml 10mo ago
    For groceries I budgeted $1k and $1k for phones, internet, water, electricity, gas, garbage, etc.
- bdangubic 10mo ago
  $2.3k, northern va area, family of 3, not fancy anything. data centers have spiked electricity bills, food is insane of course. this does not include once—a-week dinner out or take out
- noncoml 10mo ago
  California actual amounts for 2 people: $150 phone $200 electricity $200 gas $200 water $80 internet $80 trash Car insurance? Gas? I’m ridiculously generous when saying you can save $6k per month.

by noncoml 10mo ago

karlgkk 10mo ago

Rent? Ever heard of equity? If you make 250k you can afford a nice condo. Right away that blows a huge hole in your math. Also $1k month on bills? Groceries too? Judging by your inflated costs for everything, and ann idea that a house (versus more modest accommodations) is what the goal is, you’ve got Lifestyle creep. And, things certainly get a lot easier when your spouse also works.

reactordev 10mo ago
Bro, not everyone has daddy to give them the down payment to buy anything remotely affordable in SV.
- karlgkk 10mo ago
  Bro, I can tell you haven’t even tried. Talk to a mortgage advisor.
  - reactordev 10mo ago
    I’ve been trying for the last decade boomer. Housing keeps going up and my salary keeps staying the same. It’s to the point where a 30 year mortgage will take me to 80 years old. Where a down payment would cost me a decade of saving and nothing but saving. No life, no food, no other bills.
    - karlgkk 10mo ago
      I’m not a boomer and the core conditional of this whole thread is that you make $250k a year. If you’re making $250k and you still think what you just said, you are completely incorrect.
assemblyman 10mo ago
Renting can be much better financially than buying. Edit: all % numbers are per year Consider the case of condos in cities. If you were to buy outright, you effectively get a return by not paying rent (i.e. paying yourself rent). Rent is usually ~5% of the condo cost. HOA + property taxes is 2-3% so subtract that from the rent return i.e. net return 2-3% (5-2/3%). The rest of the return is appreciation from the underlying real estate prices. I am excluding maintenance costs because they are negligible in condos. On the other hand, if you rent and put the entire amount (that you would have paid to buy the condo), you get ~10% per year. To break even between the two scenarios, you would need real estate prices to grow 7-8% (2-3% + 8-7% = 10%). Beyond this, there are psychological reasons to buy vs rent. Buying - ability to customize the space, peace of mind because of perceived stability etc. Renting - flexibility, peace of mind because of no long-term obligations etc. A mortgage is an interpolation of the two cases at the cost of the interest one pays. It is noteworthy, at least in the US, that for most people, this is the only time they can borrow several hundreds of thousands at relatively low costs.
noncoml 10mo ago
Do you live in the Bay Area?

PunchyHamster 10mo ago

why would you would be saving for house and renting at same time ?

rkomorn 10mo ago
Because you need to have enough saved for a downpayment?
- karlgkk 10mo ago
  Well, interest rates are high right now, but you’d be surprised at how little down payment you need for purchasing a house or a condo. If you’re a tech worker with a stable career making that kind of money, most underwriters will just give you the loan. I think people commonly underestimate how accessible this stuff is It’s easy to make a 40 year forecast spreadsheet for retirement, including housing costs, property, taxes, maintenance. Include vacation, budget, food, general cost of living.
  - rkomorn 10mo ago
    I left Silicon Valley 5 years ago. Are people getting $1M+ loans with zero down these days?
    - karlgkk 10mo ago
      No? What? I mentioned Lifestyle creep before but what is with everyone’s fried brains? A small condo in a nice neighborhood in Santa Clara is below $500k. Yes, that’s a lot, and you certainly can get more bang for your buck if you’re willing to do a little commuting. Btw a $1m house is accessible if you make $250k yr, although to be honest, I would highly recommend against it
      - rkomorn 10mo ago
        The question I originally responded to was "why would you rent and save for a house at the same time?" I said "because you need to have a downpayment". You reply "downpayments aren't that high". Unless you're getting loans zero down, you literally still need to save to have your downpayment. While you're renting. So where is my brain fried? Even on a $500k condo, you're putting 10% down, you still need to have that saved up. Noticeably more, in fact, because I'm sure you'd agree "lemme sink every saved cent I have into my house downpayment" wouldn't be wise.

tayo42 10mo ago

2k a month for daycare or nursery school lol

CraigJPerry 10mo ago

6k month over the past decade is circa 1.7m today depending on which index fund you chose. Assuming a 4% draw down (conventionally agreed to be safe) is over 5.5k a month.

lixtra 10mo ago
The 4% rule is considered safe for a 30 year retirement period. So at 50 you might want to withdraw a little less.
wakawaka28 10mo ago
Money has lost about about 10% per year in value for the past 5 years. It used to take like a million dollars to retire, but now it's like double that. In addition, nobody really knows how long they might live or how bad inflation could get. Imagine retiring at 50 only to be wiped out, and maybe still on the hook to pay for your own expenses for another 50 years, plus whoever you have in your life who counts on you.
- noncoml 10mo ago
  2 millions to retire? Without owning a house? You must be kidding, unless you plan to live only until 60 or move to the cheapest place in the country. Also keep in mind that most health problems start after 50.
  - wakawaka28 10mo ago
    To be fair, if you believe all the usual assumptions, then you can expect to earn 5% on that money. That would turn into $100k annually which is enough to live just about anywhere. Now, if you retire on time, I think this may also be tax free. So it's not that crazy, except for the unknowable inflation part of the puzzle. If inflation is also 5%, then your effective loss is 5% per year, so you'd be down nearly 100% after 20 years. Housing costs are crazy, but if you don't need to work then you can easily move to a cheaper place to save money.
noncoml 10mo ago

phainopepla2 10mo ago

$2k per month for groceries and utilities for a married couple is insanely high, in any part of the country.

phantasmish 10mo ago
We're probably around $1,200 for groceries and related (cleaning stuff, mostly) in our house, but we're a family of five. Yeah I'd say $2k is nuts for just two people, even today. For a long while we managed to stay around $500-600 but that was before COVID inflation. I dunno how the official inflation rate's as low as it is, we don't buy much that'd be considered "luxury" level (we're not buying caviar, say, and rarely even get stuff like the grass-fed "fancy" butter [actually yellow instead of white, tastes like something rather than just having texture but no flavor] instead of the cheapest available) and I'm pretty sure we buy a lot less meat per person than the US average, but if we fill up a cart now it's like $250-$300. I've hit $150 on small shopping trips where I didn't even fully fill one of the smaller, short carts.
- noncoml 10mo ago
  For groceries I budgeted $1k and $1k for phones, internet, water, electricity, gas, garbage, etc.
bdangubic 10mo ago
$2.3k, northern va area, family of 3, not fancy anything. data centers have spiked electricity bills, food is insane of course. this does not include once—a-week dinner out or take out
noncoml 10mo ago
California actual amounts for 2 people: $150 phone $200 electricity $200 gas $200 water $80 internet $80 trash Car insurance? Gas? I’m ridiculously generous when saying you can save $6k per month.