Author Topic: Overheard at Work  (Read 4928137 times)

dragoncar

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Re: Overheard at Work
« Reply #13250 on: April 25, 2016, 12:43:16 PM »


Basically what we said. We wound up building a 3-story, 4-bedroom house on 2 acres of land for significantly less than half of that amount, and I still think we went overboard. Like, guys, what on earth do you spend the extra 400k ON??!

Usually expensive land

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Re: Overheard at Work
« Reply #13251 on: April 25, 2016, 01:30:53 PM »


Basically what we said. We wound up building a 3-story, 4-bedroom house on 2 acres of land for significantly less than half of that amount, and I still think we went overboard. Like, guys, what on earth do you spend the extra 400k ON??!

Usually expensive land

Or ridiculous over-improvements that don't look any better or extend the life of the home proportionate with the cost. I'm thinking about stuff like marble tubs, stone flooring, imported granite countertops, stainless steel appliances, in-floor heating (which admittedly can be nice but it's freaking expensive), etc., etc. Then of course there are all kinds of crazy upgrades and improvements that aren't really. It would be worth starting a new thread just to mock overpriced home improvements.
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dragoncar

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Re: Overheard at Work
« Reply #13252 on: April 25, 2016, 02:36:37 PM »


Basically what we said. We wound up building a 3-story, 4-bedroom house on 2 acres of land for significantly less than half of that amount, and I still think we went overboard. Like, guys, what on earth do you spend the extra 400k ON??!

Usually expensive land

Or ridiculous over-improvements that don't look any better or extend the life of the home proportionate with the cost. I'm thinking about stuff like marble tubs, stone flooring, imported granite countertops, stainless steel appliances, in-floor heating (which admittedly can be nice but it's freaking expensive), etc., etc. Then of course there are all kinds of crazy upgrades and improvements that aren't really. It would be worth starting a new thread just to mock overpriced home improvements.

In my neck of the woods, all those increased finishes don't add that much.  The main cost is labor and land.  But then again, I've never seen stone flooring or a marble tub -- is that different from tile?  Or is it more castle-esque? 

Then again, I unmustachianly tend to think people in my area under-improve given what they pay for land.  Dude, you have a fully-depreciated $50k house from 1965 on top of a $1 million parcel -- why don't you upgrade that run down POS?

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Re: Overheard at Work
« Reply #13253 on: April 25, 2016, 03:34:36 PM »


Basically what we said. We wound up building a 3-story, 4-bedroom house on 2 acres of land for significantly less than half of that amount, and I still think we went overboard. Like, guys, what on earth do you spend the extra 400k ON??!

Usually expensive land

Or ridiculous over-improvements that don't look any better or extend the life of the home proportionate with the cost. I'm thinking about stuff like marble tubs, stone flooring, imported granite countertops, stainless steel appliances, in-floor heating (which admittedly can be nice but it's freaking expensive), etc., etc. Then of course there are all kinds of crazy upgrades and improvements that aren't really. It would be worth starting a new thread just to mock overpriced home improvements.

In my neck of the woods, all those increased finishes don't add that much.  The main cost is labor and land.  But then again, I've never seen stone flooring or a marble tub -- is that different from tile?  Or is it more castle-esque? 

Then again, I unmustachianly tend to think people in my area under-improve given what they pay for land.  Dude, you have a fully-depreciated $50k house from 1965 on top of a $1 million parcel -- why don't you upgrade that run down POS?

In my area people do go for ridiculous amounts of land, but they also seem to like ridiculous square footage.  Did you know you need 4000 sq ft to raise 2 kids?

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Re: Overheard at Work
« Reply #13254 on: April 26, 2016, 01:47:24 AM »
In my area people do go for ridiculous amounts of land, but they also seem to like ridiculous square footage.  Did you know you need 4000 sq ft to raise 2 kids?

Of course you do; in a smaller house you might actually see your progeny.

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Re: Overheard at Work
« Reply #13255 on: April 26, 2016, 03:50:41 AM »
In my area people do go for ridiculous amounts of land, but they also seem to like ridiculous square footage.  Did you know you need 4000 sq ft to raise 2 kids?

Of course you do; in a smaller house you might actually see your progeny.

That would probably means the nanny and house keeper aren't doing their job...
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Re: Overheard at Work
« Reply #13256 on: April 26, 2016, 06:14:03 AM »


Basically what we said. We wound up building a 3-story, 4-bedroom house on 2 acres of land for significantly less than half of that amount, and I still think we went overboard. Like, guys, what on earth do you spend the extra 400k ON??!

Usually expensive land

Or ridiculous over-improvements that don't look any better or extend the life of the home proportionate with the cost. I'm thinking about stuff like marble tubs, stone flooring, imported granite countertops, stainless steel appliances, in-floor heating (which admittedly can be nice but it's freaking expensive), etc., etc. Then of course there are all kinds of crazy upgrades and improvements that aren't really. It would be worth starting a new thread just to mock overpriced home improvements.

In my neck of the woods, all those increased finishes don't add that much.  The main cost is labor and land.  But then again, I've never seen stone flooring or a marble tub -- is that different from tile?  Or is it more castle-esque? 

Then again, I unmustachianly tend to think people in my area under-improve given what they pay for land.  Dude, you have a fully-depreciated $50k house from 1965 on top of a $1 million parcel -- why don't you upgrade that run down POS?

we bought a house thats probably 1k square feet too big, b/c to buy the lot was 250k, to build the house we wanted that was smaller on said lot was 250k.  so we ended up in a lot larger house for 440k.  Lake front land isnt cheap, esp. when its commuting distance to a city, so you dont have to own a second house at the ozarks and commute 4 hours roundtrip on weekends.  Our purchase wasnt the most MMM thing but with rates as they are and the bargain we got on the house (easily worth over 500k).  it shouldnt affect us too much.
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Metric Mouse

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Re: Overheard at Work
« Reply #13257 on: April 26, 2016, 06:17:25 AM »


Basically what we said. We wound up building a 3-story, 4-bedroom house on 2 acres of land for significantly less than half of that amount, and I still think we went overboard. Like, guys, what on earth do you spend the extra 400k ON??!

Usually expensive land

Or ridiculous over-improvements that don't look any better or extend the life of the home proportionate with the cost. I'm thinking about stuff like marble tubs, stone flooring, imported granite countertops, stainless steel appliances, in-floor heating (which admittedly can be nice but it's freaking expensive), etc., etc. Then of course there are all kinds of crazy upgrades and improvements that aren't really. It would be worth starting a new thread just to mock overpriced home improvements.

In my neck of the woods, all those increased finishes don't add that much.  The main cost is labor and land.  But then again, I've never seen stone flooring or a marble tub -- is that different from tile?  Or is it more castle-esque? 

Then again, I unmustachianly tend to think people in my area under-improve given what they pay for land.  Dude, you have a fully-depreciated $50k house from 1965 on top of a $1 million parcel -- why don't you upgrade that run down POS?

we bought a house thats probably 1k square feet too big, b/c to buy the lot was 250k, to build the house we wanted that was smaller on said lot was 250k.  so we ended up in a lot larger house for 440k.  Lake front land isnt cheap, esp. when its commuting distance to a city, so you dont have to own a second house at the ozarks and commute 4 hours roundtrip on weekends.  Our purchase wasnt the most MMM thing but with rates as they are and the bargain we got on the house (easily worth over 500k).  it shouldnt affect us too much.

For that small of a difference I think I would have custom built. Or buy the house, sell it for the easy 60K+ and then built my perfectly sized lower maintenance dream home.
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Re: Overheard at Work
« Reply #13258 on: April 26, 2016, 06:59:44 AM »
When I asked a coworker how looking for a house was going I got the reply "Great! Our offer of $480,000 was approved!". This is in an area where you can find a well maintained, 2-10 year old 2400 sq ft house in a good school district for $250,000. Previously the coworker has relayed to me that they have run into some financial problems and that they might not be saving enough for retirement. After mentioning the purchase price the coworker went on to say "We're scrimping a bit to come up with the 20% down but we might have to take some out of retirement." and "I'm almost 50 and am worried that we'll be house poor again but we've wanted to be in this particular subdivision for so long its worth it". Given that both husband and wife make over $100k a year I had a difficult time processing a lot of these statements

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Re: Overheard at Work
« Reply #13259 on: April 26, 2016, 09:20:51 AM »
I always thought the rule-of-thumb for buying a house was not to take on a mortgage more than twice your annual salary.  I bought my place in 2001 when I was making $50k, and took on a mortgage of about $100k.  I was pretty wasteful in my spending back then, and I figured I'd gone a bit overboard even so.

But I've probably got a warped impression from living in a LCOL.  That $100k got me a 1400sq three bedroom on a corner lot in a nice suburban neighborhood.  I remember being at a wedding with a bunch of people from San Francisco in the mid 2000s as they talked about needing $600k for a "starter home".  I never understood how that math would work out.  They made more money than me, but not six times as much. 

Then 2008 came.  Turned out the math didn't work out.  :/

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Re: Overheard at Work
« Reply #13260 on: April 26, 2016, 09:40:26 AM »
I always thought the rule-of-thumb for buying a house was not to take on a mortgage more than twice your annual salary.  I bought my place in 2001 when I was making $50k, and took on a mortgage of about $100k.  I was pretty wasteful in my spending back then, and I figured I'd gone a bit overboard even so.

But I've probably got a warped impression from living in a LCOL.  That $100k got me a 1400sq three bedroom on a corner lot in a nice suburban neighborhood.  I remember being at a wedding with a bunch of people from San Francisco in the mid 2000s as they talked about needing $600k for a "starter home".  I never understood how that math would work out.  They made more money than me, but not six times as much. 

Then 2008 came.  Turned out the math didn't work out.  :/

My wife and I are looking for a home now. On our combined salary, which isn't bad, we're probably going to have to give up on all of our "wants" for a home to be able to afford one at slightly less than 3x our salary. HCOL areas suck. The one that I'm really struggling with is the proximity to the train--prices go down the farther we get from the train station, but at a certain point it means that I'll have to drive, which increases our total monthly expenses by about $100-$150 depending on the town--so is that worth an extra $20k-$35k on the purchase price, knowing that it is a 15-30 year commitment and I don't know how long I'll be in my job? At the same time, that is one of the things that does hold the value up.

In any case, we're going with the 30% rule for our mortgage payment/tax/insurance. Still not sure if that is on gross or net.

ender

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Re: Overheard at Work
« Reply #13261 on: April 26, 2016, 10:05:39 AM »
My wife and I are planning on a total mortgage/taxes payment of no more than 22% of net - after tax and tithe.

Amazing how much that still feels like..

Inaya

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Re: Overheard at Work
« Reply #13262 on: April 26, 2016, 10:18:29 AM »
My wife and I are looking for a home now. On our combined salary, which isn't bad, we're probably going to have to give up on all of our "wants" for a home to be able to afford one at slightly less than 3x our salary. HCOL areas suck. The one that I'm really struggling with is the proximity to the train--prices go down the farther we get from the train station, but at a certain point it means that I'll have to drive, which increases our total monthly expenses by about $100-$150 depending on the town--so is that worth an extra $20k-$35k on the purchase price, knowing that it is a 15-30 year commitment and I don't know how long I'll be in my job? At the same time, that is one of the things that does hold the value up.

In any case, we're going with the 30% rule for our mortgage payment/tax/insurance. Still not sure if that is on gross or net.


Similar issue here. We've been considering migrating to the suburbs. Except the homes are all huge (and expensive, accordingly) out there. We want a 1br, but they just don't exist in the areas we're looking (near my office)--and 2brs are also fairly uncommon. So if we do move, we'll have to pay for space we don't even want--and even more if we want to be near transit. But if I change jobs, we're stuck with too much expensive house.
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dragoncar

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Re: Overheard at Work
« Reply #13263 on: April 26, 2016, 10:21:31 AM »
I always thought the rule-of-thumb for buying a house was not to take on a mortgage more than twice your annual salary.  I bought my place in 2001 when I was making $50k, and took on a mortgage of about $100k.  I was pretty wasteful in my spending back then, and I figured I'd gone a bit overboard even so.

But I've probably got a warped impression from living in a LCOL.  That $100k got me a 1400sq three bedroom on a corner lot in a nice suburban neighborhood.  I remember being at a wedding with a bunch of people from San Francisco in the mid 2000s as they talked about needing $600k for a "starter home".  I never understood how that math would work out.  They made more money than me, but not six times as much. 

Then 2008 came.  Turned out the math didn't work out.  :/

The rule of thumb is likely based on historical average interest rates of 6% or higher.  When rates are 3.x, affordability changes drastically (on a cash flow basis).  I still think 2x salary is a great rule of thumb, but that's because it puts you in a great position to easily and quickly pay off your mortgage if you decide to.  Not because anything higher is foolhardy.  I certainly wouldn't think less of a coworker who got a mortgage at 3x their salary.

But I'm near SF ... I think people who talk about "starter homes" are generally full of it.  Obviously there are cheaper homes in the Bay Area.  What they probably meant was that there were no homes under $600k in a particular school district or fancy neighborhood or whatever.  If they were willing to slum it a little there would have been many options.

mtn

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Re: Overheard at Work
« Reply #13264 on: April 26, 2016, 11:34:13 AM »
My wife and I are looking for a home now. On our combined salary, which isn't bad, we're probably going to have to give up on all of our "wants" for a home to be able to afford one at slightly less than 3x our salary. HCOL areas suck. The one that I'm really struggling with is the proximity to the train--prices go down the farther we get from the train station, but at a certain point it means that I'll have to drive, which increases our total monthly expenses by about $100-$150 depending on the town--so is that worth an extra $20k-$35k on the purchase price, knowing that it is a 15-30 year commitment and I don't know how long I'll be in my job? At the same time, that is one of the things that does hold the value up.

In any case, we're going with the 30% rule for our mortgage payment/tax/insurance. Still not sure if that is on gross or net.


Similar issue here. We've been considering migrating to the suburbs. Except the homes are all huge (and expensive, accordingly) out there. We want a 1br, but they just don't exist in the areas we're looking (near my office)--and 2brs are also fairly uncommon. So if we do move, we'll have to pay for space we don't even want--and even more if we want to be near transit. But if I change jobs, we're stuck with too much expensive house.

We're looking at the suburbs as well (actually, only the suburbs--I think the city of Chicago is in a housing bubble and I don't think the prices can hold up; not to mention I expect taxes to rise drastically with no increase in services). Luckily, or unluckily, my wife and I are both people who like our space, so we actually want a "large" house--large meaning 1400 sqft and up, not including basement or garage. Even there though, it is really hard to find a house that is 2-3 bedrooms, 1 to 2.5 baths that hasn't been knocked down and a monstrosity put up.

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Re: Overheard at Work
« Reply #13265 on: April 26, 2016, 11:43:50 AM »
My wife and I are looking for a home now. On our combined salary, which isn't bad, we're probably going to have to give up on all of our "wants" for a home to be able to afford one at slightly less than 3x our salary. HCOL areas suck. The one that I'm really struggling with is the proximity to the train--prices go down the farther we get from the train station, but at a certain point it means that I'll have to drive, which increases our total monthly expenses by about $100-$150 depending on the town--so is that worth an extra $20k-$35k on the purchase price, knowing that it is a 15-30 year commitment and I don't know how long I'll be in my job? At the same time, that is one of the things that does hold the value up.

In any case, we're going with the 30% rule for our mortgage payment/tax/insurance. Still not sure if that is on gross or net.


Similar issue here. We've been considering migrating to the suburbs. Except the homes are all huge (and expensive, accordingly) out there. We want a 1br, but they just don't exist in the areas we're looking (near my office)--and 2brs are also fairly uncommon. So if we do move, we'll have to pay for space we don't even want--and even more if we want to be near transit. But if I change jobs, we're stuck with too much expensive house.

We're looking at the suburbs as well (actually, only the suburbs--I think the city of Chicago is in a housing bubble and I don't think the prices can hold up; not to mention I expect taxes to rise drastically with no increase in services). Luckily, or unluckily, my wife and I are both people who like our space, so we actually want a "large" house--large meaning 1400 sqft and up, not including basement or garage. Even there though, it is really hard to find a house that is 2-3 bedrooms, 1 to 2.5 baths that hasn't been knocked down and a monstrosity put up.
I actually want to buy a 1br in our building (with plans to keep it as a rental when we move), but the assessments combined with the impending property tax increases have pretty much scared me off.

Speaking of monstrosities. While researching the housing market out in suburbia, I saw an ad for what pretty much amounted to a castle. 2 bed, 7 bath (wut?), 2 pools (with swim-up bar). It had crenelations and everything! I wish I'd saved the ad. I wonder if they ever sold it.
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dragoncar

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Re: Overheard at Work
« Reply #13266 on: April 26, 2016, 11:50:16 AM »
My wife and I are looking for a home now. On our combined salary, which isn't bad, we're probably going to have to give up on all of our "wants" for a home to be able to afford one at slightly less than 3x our salary. HCOL areas suck. The one that I'm really struggling with is the proximity to the train--prices go down the farther we get from the train station, but at a certain point it means that I'll have to drive, which increases our total monthly expenses by about $100-$150 depending on the town--so is that worth an extra $20k-$35k on the purchase price, knowing that it is a 15-30 year commitment and I don't know how long I'll be in my job? At the same time, that is one of the things that does hold the value up.

In any case, we're going with the 30% rule for our mortgage payment/tax/insurance. Still not sure if that is on gross or net.


Similar issue here. We've been considering migrating to the suburbs. Except the homes are all huge (and expensive, accordingly) out there. We want a 1br, but they just don't exist in the areas we're looking (near my office)--and 2brs are also fairly uncommon. So if we do move, we'll have to pay for space we don't even want--and even more if we want to be near transit. But if I change jobs, we're stuck with too much expensive house.

Get a house that is easily partitioned, rent out the spare rooms.  You can provide a kitchenette (hot plate/fridge/microwave) or something like that ... remember that there are tons of people who never do any real cooking at home

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Re: Overheard at Work
« Reply #13267 on: April 26, 2016, 11:58:10 AM »
My wife and I are looking for a home now. On our combined salary, which isn't bad, we're probably going to have to give up on all of our "wants" for a home to be able to afford one at slightly less than 3x our salary. HCOL areas suck. The one that I'm really struggling with is the proximity to the train--prices go down the farther we get from the train station, but at a certain point it means that I'll have to drive, which increases our total monthly expenses by about $100-$150 depending on the town--so is that worth an extra $20k-$35k on the purchase price, knowing that it is a 15-30 year commitment and I don't know how long I'll be in my job? At the same time, that is one of the things that does hold the value up.

In any case, we're going with the 30% rule for our mortgage payment/tax/insurance. Still not sure if that is on gross or net.


Similar issue here. We've been considering migrating to the suburbs. Except the homes are all huge (and expensive, accordingly) out there. We want a 1br, but they just don't exist in the areas we're looking (near my office)--and 2brs are also fairly uncommon. So if we do move, we'll have to pay for space we don't even want--and even more if we want to be near transit. But if I change jobs, we're stuck with too much expensive house.

We're looking at the suburbs as well (actually, only the suburbs--I think the city of Chicago is in a housing bubble and I don't think the prices can hold up; not to mention I expect taxes to rise drastically with no increase in services). Luckily, or unluckily, my wife and I are both people who like our space, so we actually want a "large" house--large meaning 1400 sqft and up, not including basement or garage. Even there though, it is really hard to find a house that is 2-3 bedrooms, 1 to 2.5 baths that hasn't been knocked down and a monstrosity put up.
I actually want to buy a 1br in our building (with plans to keep it as a rental when we move), but the assessments combined with the impending property tax increases have pretty much scared me off.

Speaking of monstrosities. While researching the housing market out in suburbia, I saw an ad for what pretty much amounted to a castle. 2 bed, 7 bath (wut?), 2 pools (with swim-up bar). It had crenelations and everything! I wish I'd saved the ad. I wonder if they ever sold it.

I don't see how landlords can be making money these days with taxes the way they are, unless they either own the place outright without a mortgage, or live in one of the other units. I know my landlord would not be on our unit if she didn't own it; she'd also be hard-pressed to get more money than she is getting from us.

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Re: Overheard at Work
« Reply #13268 on: April 26, 2016, 01:22:14 PM »
My wife and I are looking for a home now. On our combined salary, which isn't bad, we're probably going to have to give up on all of our "wants" for a home to be able to afford one at slightly less than 3x our salary. HCOL areas suck. The one that I'm really struggling with is the proximity to the train--prices go down the farther we get from the train station, but at a certain point it means that I'll have to drive, which increases our total monthly expenses by about $100-$150 depending on the town--so is that worth an extra $20k-$35k on the purchase price, knowing that it is a 15-30 year commitment and I don't know how long I'll be in my job? At the same time, that is one of the things that does hold the value up.

In any case, we're going with the 30% rule for our mortgage payment/tax/insurance. Still not sure if that is on gross or net.


Similar issue here. We've been considering migrating to the suburbs. Except the homes are all huge (and expensive, accordingly) out there. We want a 1br, but they just don't exist in the areas we're looking (near my office)--and 2brs are also fairly uncommon. So if we do move, we'll have to pay for space we don't even want--and even more if we want to be near transit. But if I change jobs, we're stuck with too much expensive house.

We're looking at the suburbs as well (actually, only the suburbs--I think the city of Chicago is in a housing bubble and I don't think the prices can hold up; not to mention I expect taxes to rise drastically with no increase in services). Luckily, or unluckily, my wife and I are both people who like our space, so we actually want a "large" house--large meaning 1400 sqft and up, not including basement or garage. Even there though, it is really hard to find a house that is 2-3 bedrooms, 1 to 2.5 baths that hasn't been knocked down and a monstrosity put up.
I actually want to buy a 1br in our building (with plans to keep it as a rental when we move), but the assessments combined with the impending property tax increases have pretty much scared me off.

Speaking of monstrosities. While researching the housing market out in suburbia, I saw an ad for what pretty much amounted to a castle. 2 bed, 7 bath (wut?), 2 pools (with swim-up bar). It had crenelations and everything! I wish I'd saved the ad. I wonder if they ever sold it.

I don't see how landlords can be making money these days with taxes the way they are, unless they either own the place outright without a mortgage, or live in one of the other units. I know my landlord would not be on our unit if she didn't own it; she'd also be hard-pressed to get more money than she is getting from us.

Depends on the market.  In our area, things are heating up, but it seems landlords can still make decent money even after taxes, insurance, maintenance.  In a LCOL area, probably not so much, or even some HCOL areas it might not make sense to be a landlord.

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Re: Overheard at Work
« Reply #13269 on: April 26, 2016, 01:37:56 PM »
My wife and I are looking for a home now. On our combined salary, which isn't bad, we're probably going to have to give up on all of our "wants" for a home to be able to afford one at slightly less than 3x our salary. HCOL areas suck. The one that I'm really struggling with is the proximity to the train--prices go down the farther we get from the train station, but at a certain point it means that I'll have to drive, which increases our total monthly expenses by about $100-$150 depending on the town--so is that worth an extra $20k-$35k on the purchase price, knowing that it is a 15-30 year commitment and I don't know how long I'll be in my job? At the same time, that is one of the things that does hold the value up.

In any case, we're going with the 30% rule for our mortgage payment/tax/insurance. Still not sure if that is on gross or net.


Similar issue here. We've been considering migrating to the suburbs. Except the homes are all huge (and expensive, accordingly) out there. We want a 1br, but they just don't exist in the areas we're looking (near my office)--and 2brs are also fairly uncommon. So if we do move, we'll have to pay for space we don't even want--and even more if we want to be near transit. But if I change jobs, we're stuck with too much expensive house.

We're looking at the suburbs as well (actually, only the suburbs--I think the city of Chicago is in a housing bubble and I don't think the prices can hold up; not to mention I expect taxes to rise drastically with no increase in services). Luckily, or unluckily, my wife and I are both people who like our space, so we actually want a "large" house--large meaning 1400 sqft and up, not including basement or garage. Even there though, it is really hard to find a house that is 2-3 bedrooms, 1 to 2.5 baths that hasn't been knocked down and a monstrosity put up.
I actually want to buy a 1br in our building (with plans to keep it as a rental when we move), but the assessments combined with the impending property tax increases have pretty much scared me off.

Speaking of monstrosities. While researching the housing market out in suburbia, I saw an ad for what pretty much amounted to a castle. 2 bed, 7 bath (wut?), 2 pools (with swim-up bar). It had crenelations and everything! I wish I'd saved the ad. I wonder if they ever sold it.

I don't see how landlords can be making money these days with taxes the way they are, unless they either own the place outright without a mortgage, or live in one of the other units. I know my landlord would not be on our unit if she didn't own it; she'd also be hard-pressed to get more money than she is getting from us.

Depends on the market.  In our area, things are heating up, but it seems landlords can still make decent money even after taxes, insurance, maintenance.  In a LCOL area, probably not so much, or even some HCOL areas it might not make sense to be a landlord.
Even if the house isn't paid off, if they bought it 15 years ago, their mortgage payment might be half of what they're renting it for, just from the housing market having gone up.

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Re: Overheard at Work
« Reply #13270 on: April 26, 2016, 01:42:56 PM »
Good point--I was talking specifically about the City of Chicago, and for people who bought in the last 2-3 years.

Digital Dogma

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Re: Overheard at Work
« Reply #13271 on: April 26, 2016, 02:10:28 PM »
Overheard at work... I'll keep it very general and ambiguous

The market took a nose dive to ~16,000 last year and a guy (lets call him Bob) nearing retirement had always mentioned his plan was to work till he died in his boots. He got spooked, others nearing retirement mentioned that they took their savings out of their 401k to avoid "losing their retirement" to another recession (which hasn't arrived yet as far as I know...)

So he liquidated one of his 401k funds and took penalties for withdrawing prior to retirement. The idea was to buy rental property, with 25% down, in a very low income area. Nobody would extend him credit because of the big vehicle loan, big mortgage on an upside-down house, and credit card debt. He paid off the vehicle (YES! sell that huge piece of shit) and most of the credit card debt (Better...) and still can't improve his credit score significantly. Now he is looking at getting a cash loan from a company who does not even require proof of income because no banks are willing to qualify him for a loan.

I can't see this ending well.
« Last Edit: April 26, 2016, 02:15:20 PM by Digital Dogma »

merula

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Re: Overheard at Work
« Reply #13272 on: April 26, 2016, 02:30:21 PM »
My company is doing a bunch of things to promote personal finance topics and knowledge of the company's offerings (pension, 401k, free legal services, etc.). As part of this, our intranet had a poll "The average deferral percentage of all employees in the MegaCorp 401(k) Plan is?"

I guessed 5%, which is the match, and was pleasantly surprised to learn that I'm wrong, it's 9%. However, that information came with this chart:
AgeContribution rate401(k) balance
<357%$30,000
35-548%$134,000
>5412%$252,000

How does that even work? How can you put away that much and still only have $252,000 on average at age 55?

onlykelsey

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Re: Overheard at Work
« Reply #13273 on: April 26, 2016, 02:37:00 PM »
My company is doing a bunch of things to promote personal finance topics and knowledge of the company's offerings (pension, 401k, free legal services, etc.). As part of this, our intranet had a poll "The average deferral percentage of all employees in the MegaCorp 401(k) Plan is?"

I guessed 5%, which is the match, and was pleasantly surprised to learn that I'm wrong, it's 9%. However, that information came with this chart:
AgeContribution rate401(k) balance
<357%$30,000
35-548%$134,000
>5412%$252,000

How does that even work? How can you put away that much and still only have $252,000 on average at age 55?

It doesn't ask about loans or withdraws from your account, and most people don't spend their whole life at a job like MegaCorp with a plan.  Only in my 10th? 12th? job did I get a 401(k) plan.  Also clearly a generational thing.

merula

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Re: Overheard at Work
« Reply #13274 on: April 26, 2016, 02:41:15 PM »
It doesn't ask about loans or withdraws from your account, and most people don't spend their whole life at a job like MegaCorp with a plan.  Only in my 10th? 12th? job did I get a 401(k) plan.  Also clearly a generational thing.

Fair point, but we do have a LOT of "lifers" and a rapidly aging workforce (we are definitely not Google), but the 401k plan has only existed since the mid-90s? I think?

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Re: Overheard at Work
« Reply #13275 on: April 26, 2016, 03:51:33 PM »
It doesn't ask about loans or withdraws from your account, and most people don't spend their whole life at a job like MegaCorp with a plan.  Only in my 10th? 12th? job did I get a 401(k) plan.  Also clearly a generational thing.

Fair point, but we do have a LOT of "lifers" and a rapidly aging workforce (we are definitely not Google), but the 401k plan has only existed since the mid-90s? I think?

Even if you have a lot of lifers, how many newbies do you have? I have a 401k from a MegaCorp that I worked for for 2.5 years. When I left I had about $35k in there, and I've made all the contributions I ever will to it. With my current job, if I leave within 2 years I doubt that I'll have more than $40k to $50k in it when I leave--it isn't the best plan and there was no match for the first year, so I put $11k to an IRA when I joined the company and didn't start contributing hardcore to the 401k until about 8 months in.

I think my dad has something similar--his current 401k is only in the $300k range, but that doesn't tell the whole story since he put a lot towards stock options, has/had a pension, and 2 other 401k/IRA's.


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Re: Overheard at Work
« Reply #13276 on: April 27, 2016, 03:01:41 AM »
My company is doing a bunch of things to promote personal finance topics and knowledge of the company's offerings (pension, 401k, free legal services, etc.). As part of this, our intranet had a poll "The average deferral percentage of all employees in the MegaCorp 401(k) Plan is?"

I guessed 5%, which is the match, and was pleasantly surprised to learn that I'm wrong, it's 9%. However, that information came with this chart:
AgeContribution rate401(k) balance
<357%$30,000
35-548%$134,000
>5412%$252,000

How does that even work? How can you put away that much and still only have $252,000 on average at age 55?

I would expect that the 12% match for the older folks resulted from putting sweet FA away for years and then realising they were way behind. So it is 12% today not 12% since they started contributing. Also if they have calculated the average contribution as (7 + 8 + 12) / 3  = 9 then they need to go back to school (unless each age range is exactly 1/3 of the workforce).

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Re: Overheard at Work
« Reply #13277 on: April 27, 2016, 06:42:31 AM »
I work in accounting, so we are still super busy with personal taxes (Canada). Yesterday, in our staff meeting, our boss said payday wouldn't be until mid-May because he just didn't have time to do it. He was just joking, but one of the junior CA's started freaking out. What about my mortgage payment? Car payment? etc. I was just meh. Whatever.

The thing is she makes waaaay more than I do. I got her started on YNAB at one point, I wonder if she kept up with it?

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Re: Overheard at Work
« Reply #13278 on: April 27, 2016, 06:45:29 AM »
I work in accounting, so we are still super busy with personal taxes (Canada). Yesterday, in our staff meeting, our boss said payday wouldn't be until mid-May because he just didn't have time to do it. He was just joking, but one of the junior CA's started freaking out. What about my mortgage payment? Car payment? etc. I was just meh. Whatever.

The thing is she makes waaaay more than I do. I got her started on YNAB at one point, I wonder if she kept up with it?

i'd be freaking out too i dont keep captial on hand for my work to skip paying me one week.  i keep enough on hand for the bills and the rest is invested in taxable accounts since all tax advantaged are maxed.  i guess i could use my Manufactured spending to pay my mortgage with a CC but that is one thing i cant float out with a CC that i will typically use as an E fund and just not fund my taxable the next month to pay off the CC with out incurring interest. 
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merula

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Re: Overheard at Work
« Reply #13279 on: April 27, 2016, 07:34:53 AM »
I would expect that the 12% match for the older folks resulted from putting sweet FA away for years and then realising they were way behind. So it is 12% today not 12% since they started contributing. Also if they have calculated the average contribution as (7 + 8 + 12) / 3  = 9 then they need to go back to school (unless each age range is exactly 1/3 of the workforce).

I'm guessing that the center group is the largest. Almost all jobs here require a degree, so if you say that starts at 22, then there's s 13 year span in the first group, 20 in the second and 10 in the third (assuming "standard" retirement at 65).

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Re: Overheard at Work
« Reply #13280 on: April 27, 2016, 08:57:58 AM »
I work in accounting, so we are still super busy with personal taxes (Canada). Yesterday, in our staff meeting, our boss said payday wouldn't be until mid-May because he just didn't have time to do it. He was just joking, but one of the junior CA's started freaking out. What about my mortgage payment? Car payment? etc. I was just meh. Whatever.

The thing is she makes waaaay more than I do. I got her started on YNAB at one point, I wonder if she kept up with it?

i'd be freaking out too i dont keep captial on hand for my work to skip paying me one week.  i keep enough on hand for the bills and the rest is invested in taxable accounts since all tax advantaged are maxed.  i guess i could use my Manufactured spending to pay my mortgage with a CC but that is one thing i cant float out with a CC that i will typically use as an E fund and just not fund my taxable the next month to pay off the CC with out incurring interest.

I don't work on credit.  If they stop paying me, I stop showing up.

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Re: Overheard at Work
« Reply #13281 on: April 27, 2016, 11:24:44 AM »
I work in accounting, so we are still super busy with personal taxes (Canada). Yesterday, in our staff meeting, our boss said payday wouldn't be until mid-May because he just didn't have time to do it. He was just joking, but one of the junior CA's started freaking out. What about my mortgage payment? Car payment? etc. I was just meh. Whatever.

If my employer can't pay me once (and I consider paying late not paying me) for any reason then that gives me serious concerns about the whole organization and I would immediately begin job hunting. Sure I can make my mortgage payment now but what about six months from now? Will my employer have paid me by then for any work I've done between now and then?

For my own "heard at work" story, we recently had our benefits meeting and one of the vendors tried the "It costs about a dollar a day, you spend more than that on a latte!" Actually one, no I don't, and two, even if I did and I was on a fixed budget your phrasing implies that I'd buy this product on top of buying the latte daily. The flaw is that I can choose to stop buying the latte partway through the year but I'm locked into this product till the end of the insurance plan year and I can think of a lot of other things I can spend +$360 on. Thankfully my workplace is big on financial literacy (the Dave Ramsey name/classes gets thrown around a lot) so I'm not too worried about my coworkers but that's got to be part of that vendor's regular pitch.

Employers being unable to pay is a big deal.  At DBF's previous job at a small lunch counter, when the nice manager realized that the owners weren't paying the vendors, nice manager started sending employees out to cash their paychecks in waves immediately upon receipt, to make sure that no employee would end up with a bounced check.  It was a good move, as the owners just posted a sign on the door one night a while later telling employees (and nice manager) to go away and they skipped town.
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Re: Overheard at Work
« Reply #13282 on: April 27, 2016, 01:53:34 PM »
I work in accounting, so we are still super busy with personal taxes (Canada). Yesterday, in our staff meeting, our boss said payday wouldn't be until mid-May because he just didn't have time to do it. He was just joking, but one of the junior CA's started freaking out. What about my mortgage payment? Car payment? etc. I was just meh. Whatever.

If my employer can't pay me once (and I consider paying late not paying me) for any reason then that gives me serious concerns about the whole organization and I would immediately begin job hunting. Sure I can make my mortgage payment now but what about six months from now?

Not quite the same, but a previous employer announced in a company meeting that as a cash-conservation measure until the next round of funding showed up, they were going to stop paying withholding tax. The alarms going off in my head drowned out pretty much everything else they said, but I looked around the room and nobody else seemed even the least bit fazed by it. As far as I know they all went down with the ship.

The next April, I got a call from their HR person (the owner's wife) who said they weren't even going to issue W-2's. I'm guessing that they played even more sketchy tricks with the payroll and didn't want to document it.

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Re: Overheard at Work
« Reply #13283 on: April 27, 2016, 02:05:52 PM »
I work in accounting, so we are still super busy with personal taxes (Canada). Yesterday, in our staff meeting, our boss said payday wouldn't be until mid-May because he just didn't have time to do it. He was just joking, but one of the junior CA's started freaking out. What about my mortgage payment? Car payment? etc. I was just meh. Whatever.

If my employer can't pay me once (and I consider paying late not paying me) for any reason then that gives me serious concerns about the whole organization and I would immediately begin job hunting. Sure I can make my mortgage payment now but what about six months from now?

Not quite the same, but a previous employer announced in a company meeting that as a cash-conservation measure until the next round of funding showed up, they were going to stop paying withholding tax. The alarms going off in my head drowned out pretty much everything else they said, but I looked around the room and nobody else seemed even the least bit fazed by it. As far as I know they all went down with the ship.

The next April, I got a call from their HR person (the owner's wife) who said they weren't even going to issue W-2's. I'm guessing that they played even more sketchy tricks with the payroll and didn't want to document it.

I knew someone who was a partner in a business that decided to do that. It was in addition to a bunch of other asinine get-money-quickly ideas to bail out a business that had been managed into the ground due in part to his own bad decision making. He never could understand why I didn't want to come work for him. (He was a really smart dude, but stupid at the same time.)

However, if these guys burn you and you report them to the IRS for failure to pay withholding tax, you may be able to get a cut of it if you blow the whistle on them.
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Re: Overheard at Work
« Reply #13284 on: April 27, 2016, 02:07:32 PM »
Long time lurker/reader, first time poster.

I must say that after spending the last 3 months poring over MMM's site, the average income of posters and their coworkers appears to be astronomical. My wife (she is a mostly SAHM) and I together pull in ~$43,000/year in a low COL area of the Midwest. I work at a large financial firm, and she is a nurse doing 1 shift every couple of weeks. As many of you and MMM himself have mentioned, FIRE is mostly contingent on savings rate, so the principles are the same for us all. All of the high 5 figure and low 6 figure household salaries are nonetheless impressive.

Back on topic: I have a cube mate who recently showed up to work with a new Louis Vuitton purse, promptly showing it off to everyone. Never having seen one before, I had to Google it to find out that it costs ~$2,000. She told me that she had been saving up for it for awhile, and that it was to reward herself.  When I mentioned it was good she had at least not put such an extravagant purchase on a credit card, she qualified her previous statement by saying that she had "mostly saved up for it, but still had to put the rest on a credit card."

The confusing part is that we live in a city where no one would be able to identify the purse as the status symbol she was hoping to acquire. In other words, our city is not known for its cognizance of high fashion :-)

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Re: Overheard at Work
« Reply #13285 on: April 27, 2016, 02:22:32 PM »
Long time lurker/reader, first time poster.

I must say that after spending the last 3 months poring over MMM's site, the average income of posters and their coworkers appears to be astronomical. My wife (she is a mostly SAHM) and I together pull in ~$43,000/year in a low COL area of the Midwest. I work at a large financial firm, and she is a nurse doing 1 shift every couple of weeks. As many of you and MMM himself have mentioned, FIRE is mostly contingent on savings rate, so the principles are the same for us all. All of the high 5 figure and low 6 figure household salaries are nonetheless impressive.

Back on topic: I have a cube mate who recently showed up to work with a new Louis Vuitton purse, promptly showing it off to everyone. Never having seen one before, I had to Google it to find out that it costs ~$2,000. She told me that she had been saving up for it for awhile, and that it was to reward herself.  When I mentioned it was good she had at least not put such an extravagant purchase on a credit card, she qualified her previous statement by saying that she had "mostly saved up for it, but still had to put the rest on a credit card."

The confusing part is that we live in a city where no one would be able to identify the purse as the status symbol she was hoping to acquire. In other words, our city is not known for its cognizance of high fashion :-)

Maybe she bought the purse for herself because she finds joy in it, rather than to show off to others? Being excited about something that brings one joy is a normal reaction.
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Re: Overheard at Work
« Reply #13286 on: April 27, 2016, 05:24:10 PM »
I remember being at a wedding with a bunch of people from San Francisco in the mid 2000s as they talked about needing $600k for a "starter home".  I never understood how that math would work out.  They made more money than me, but not six times as much. 

Then 2008 came.  Turned out the math didn't work out.  :/

The math worked out just fine. I was visiting my friend in San Jose a bunch in 2010 - just post-recession. He was just starting out as at a dot-com, so was making about $75K starter salary. Another of his friends with the same salary bought a $600,000 condo (not a detached home) - 3 bedrooms, 1500 sq feet. Now said condo is worth 1.1 million. Both he and my friend now make over $100K, but my friend is still renting - he COULD afford that condo then, he can't now.

Detached homes are about $1.5 million for fixer-uppers, $2 million minimum if they're move-in ready or renovated.

The bay area looked at the housing "crisis", laughed really hard, and jacked the prices up 2-fold.


I, on the other hand, live in San Diego, where real estate is still reasonable (my 1200 sqft condo was purchased for $210K, worth about $250K now and rising fast). However, I can't afford a detached home and the market is growing much faster than my salary, so we won't be able to afford one unless my wife starts working. I make $90K / yr.

MgoSam

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Re: Overheard at Work
« Reply #13287 on: April 27, 2016, 06:12:30 PM »
I work in accounting, so we are still super busy with personal taxes (Canada). Yesterday, in our staff meeting, our boss said payday wouldn't be until mid-May because he just didn't have time to do it. He was just joking, but one of the junior CA's started freaking out. What about my mortgage payment? Car payment? etc. I was just meh. Whatever.

If my employer can't pay me once (and I consider paying late not paying me) for any reason then that gives me serious concerns about the whole organization and I would immediately begin job hunting. Sure I can make my mortgage payment now but what about six months from now?

Not quite the same, but a previous employer announced in a company meeting that as a cash-conservation measure until the next round of funding showed up, they were going to stop paying withholding tax. The alarms going off in my head drowned out pretty much everything else they said, but I looked around the room and nobody else seemed even the least bit fazed by it. As far as I know they all went down with the ship.

The next April, I got a call from their HR person (the owner's wife) who said they weren't even going to issue W-2's. I'm guessing that they played even more sketchy tricks with the payroll and didn't want to document it.

I knew someone who was a partner in a business that decided to do that. It was in addition to a bunch of other asinine get-money-quickly ideas to bail out a business that had been managed into the ground due in part to his own bad decision making. He never could understand why I didn't want to come work for him. (He was a really smart dude, but stupid at the same time.)

However, if these guys burn you and you report them to the IRS for failure to pay withholding tax, you may be able to get a cut of it if you blow the whistle on them.

Yeah when I was working as an accountant one of our clients refused to pay sales tax. He was happy to collect it and couldn't get himself to listen to us when we said that we would be unwilling to sign off on his taxes. He went to a competitor of ours and was told the same thing. His restaurant didn't last very long anyways.

randymarsh

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Re: Overheard at Work
« Reply #13288 on: April 27, 2016, 08:05:22 PM »
The math worked out just fine. I was visiting my friend in San Jose a bunch in 2010 - just post-recession. He was just starting out as at a dot-com, so was making about $75K starter salary. Another of his friends with the same salary bought a $600,000 condo (not a detached home) - 3 bedrooms, 1500 sq feet. Now said condo is worth 1.1 million. Both he and my friend now make over $100K, but my friend is still renting - he COULD afford that condo then, he can't now.

The principal and interest on a 600K house (with 20% down) at 4% is $2,292. The take home income for a single person no kids on 70K gross is about $4,342 per month assuming nothing for health insurance and retirement.

Spending 52% of net income on a home, before property taxes, insurance, and maintenance seems very risky. This was a condo so there was an HOA? That had to be $200 minimum right? 57% of net income.

I guess it technically works, but you've pretty much leveraged yourself to the hilt.
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frugalparagon

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Re: Overheard at Work
« Reply #13289 on: April 27, 2016, 10:14:28 PM »
I work in accounting, so we are still super busy with personal taxes (Canada). Yesterday, in our staff meeting, our boss said payday wouldn't be until mid-May because he just didn't have time to do it. He was just joking, but one of the junior CA's started freaking out. What about my mortgage payment? Car payment? etc. I was just meh. Whatever.

If my employer can't pay me once (and I consider paying late not paying me) for any reason then that gives me serious concerns about the whole organization and I would immediately begin job hunting. Sure I can make my mortgage payment now but what about six months from now?

Not quite the same, but a previous employer announced in a company meeting that as a cash-conservation measure until the next round of funding showed up, they were going to stop paying withholding tax. The alarms going off in my head drowned out pretty much everything else they said, but I looked around the room and nobody else seemed even the least bit fazed by it. As far as I know they all went down with the ship.

The next April, I got a call from their HR person (the owner's wife) who said they weren't even going to issue W-2's. I'm guessing that they played even more sketchy tricks with the payroll and didn't want to document it.

I knew someone who was a partner in a business that decided to do that. It was in addition to a bunch of other asinine get-money-quickly ideas to bail out a business that had been managed into the ground due in part to his own bad decision making. He never could understand why I didn't want to come work for him. (He was a really smart dude, but stupid at the same time.)

However, if these guys burn you and you report them to the IRS for failure to pay withholding tax, you may be able to get a cut of it if you blow the whistle on them.

Yeah when I was working as an accountant one of our clients refused to pay sales tax. He was happy to collect it and couldn't get himself to listen to us when we said that we would be unwilling to sign off on his taxes. He went to a competitor of ours and was told the same thing. His restaurant didn't last very long anyways.

I worked in an accounting office many years ago. We had a client whose husband had died maybe seven years prior. She ran a veterinary hospital as sole proprietor. She had not been paying income tax, payroll taxes, sales taxes--nuthin' since he had died. She owed hundreds of thousands. Naturally, she wasn't at all concerned. It was her daughter that made her call us, being alarmed by all the threatening IRS notices.
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Re: Overheard at Work
« Reply #13290 on: April 27, 2016, 11:48:11 PM »
The math worked out just fine. I was visiting my friend in San Jose a bunch in 2010 - just post-recession. He was just starting out as at a dot-com, so was making about $75K starter salary. Another of his friends with the same salary bought a $600,000 condo (not a detached home) - 3 bedrooms, 1500 sq feet. Now said condo is worth 1.1 million. Both he and my friend now make over $100K, but my friend is still renting - he COULD afford that condo then, he can't now.

The principal and interest on a 600K house (with 20% down) at 4% is $2,292. The take home income for a single person no kids on 70K gross is about $4,342 per month assuming nothing for health insurance and retirement.

Spending 52% of net income on a home, before property taxes, insurance, and maintenance seems very risky. This was a condo so there was an HOA? That had to be $200 minimum right? 57% of net income.

I guess it technically works, but you've pretty much leveraged yourself to the hilt.

It's not that bad.  After tax deductions, the effective interest you pay is only around $1k/month.  You put $700/mo towards principal (forced, illiquid savings).  If you are otherwise mustachian, you still have plenty left over to save.
« Last Edit: April 27, 2016, 11:49:49 PM by dragoncar »

BlueHouse

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Re: Overheard at Work
« Reply #13291 on: April 28, 2016, 05:31:17 AM »
Long time lurker/reader, first time poster.

I must say that after spending the last 3 months poring over MMM's site, the average income of posters and their coworkers appears to be astronomical. My wife (she is a mostly SAHM) and I together pull in ~$43,000/year in a low COL area of the Midwest. I work at a large financial firm, and she is a nurse doing 1 shift every couple of weeks. As many of you and MMM himself have mentioned, FIRE is mostly contingent on savings rate, so the principles are the same for us all. All of the high 5 figure and low 6 figure household salaries are nonetheless impressive.

Back on topic: I have a cube mate who recently showed up to work with a new Louis Vuitton purse, promptly showing it off to everyone. Never having seen one before, I had to Google it to find out that it costs ~$2,000. She told me that she had been saving up for it for awhile, and that it was to reward herself.  When I mentioned it was good she had at least not put such an extravagant purchase on a credit card, she qualified her previous statement by saying that she had "mostly saved up for it, but still had to put the rest on a credit card."

The confusing part is that we live in a city where no one would be able to identify the purse as the status symbol she was hoping to acquire. In other words, our city is not known for its cognizance of high fashion :-)

Maybe she bought the purse for herself because she finds joy in it, rather than to show off to others? Being excited about something that brings one joy is a normal reaction.
Is it actually possible though?  Is there any intrinsic value in a name brand purse if no one recognizes the brand value?  If the brand is not adding to the value, then isn't the only value the function of the item?  I suppose design and material could factor in a bit, but there's really no way I can see to value a purse at $2k unless you count brand awareness as some value.
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Metric Mouse

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Re: Overheard at Work
« Reply #13292 on: April 28, 2016, 05:55:31 AM »
Is it actually possible though?  Is there any intrinsic value in a name brand purse if no one recognizes the brand value?  If the brand is not adding to the value, then isn't the only value the function of the item?  I suppose design and material could factor in a bit, but there's really no way I can see to value a purse at $2k unless you count brand awareness as some value.

I would argue it is possible. If she really wanted, for example, a blue leather handbag with red velvet interior and a special pocket for her custom cigarette case, she may have to pay a premium for a brand name bag that has all of those features. It's over priced on its merits, but to get exactly what one wants it may be worth it (for them) to pay for more than the sum of its parts. It would have nothing to do with the brand.

Clearly I'm not arguing that a purse is worth $2K. But to get that quality, great looking handbag that you've always wanted? Might be worth it to someone, regardless of what name is stitched on the tag.
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plainjane

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Re: Overheard at Work
« Reply #13293 on: April 28, 2016, 06:03:56 AM »
Back on topic: I have a cube mate who recently showed up to work with a new Louis Vuitton purse, promptly showing it off to everyone. Never having seen one before, I had to Google it to find out that it costs ~$2,000. She told me that she had been saving up for it for awhile, and that it was to reward herself.  When I mentioned it was good she had at least not put such an extravagant purchase on a credit card, she qualified her previous statement by saying that she had "mostly saved up for it, but still had to put the rest on a credit card."
The confusing part is that we live in a city where no one would be able to identify the purse as the status symbol she was hoping to acquire. In other words, our city is not known for its cognizance of high fashion :-)
Maybe she bought the purse for herself because she finds joy in it, rather than to show off to others? Being excited about something that brings one joy is a normal reaction.
Is it actually possible though?  Is there any intrinsic value in a name brand purse if no one recognizes the brand value?  If the brand is not adding to the value, then isn't the only value the function of the item?  I suppose design and material could factor in a bit, but there's really no way I can see to value a purse at $2k unless you count brand awareness as some value.

A big part of the value of the brand name is to the person who purchases it and the subset of people who likewise recognize it.  It is a clan identifier to both yourself & others.  You aren't the target - it isn't important that everyone knows, just the one group.  There may only be 100 other people in your city who are the target.  And it isn't just the people in the city who might see it - she's also claiming membership to the worldwide group of people who have & want to have this bag. 
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Re: Overheard at Work
« Reply #13294 on: April 28, 2016, 06:11:28 AM »
Is it actually possible though?  Is there any intrinsic value in a name brand purse if no one recognizes the brand value?  If the brand is not adding to the value, then isn't the only value the function of the item?  I suppose design and material could factor in a bit, but there's really no way I can see to value a purse at $2k unless you count brand awareness as some value.

I would argue it is possible. If she really wanted, for example, a blue leather handbag with red velvet interior and a special pocket for her custom cigarette case, she may have to pay a premium for a brand name bag that has all of those features. It's over priced on its merits, but to get exactly what one wants it may be worth it (for them) to pay for more than the sum of its parts. It would have nothing to do with the brand.

Clearly I'm not arguing that a purse is worth $2K. But to get that quality, great looking handbag that you've always wanted? Might be worth it to someone, regardless of what name is stitched on the tag.

Am I on the wrong board?!? Colleague has bought a $2k bag on credit.

This was overheard at work and is anti-mustachian.

This is the board where we mock our colleagues for financial decisions we think are foolish. Sometimes we may judge someone unfairly, mostly we don't because most of the tales here are hilariously spendy.

Might I suggest a separate thread for the justification of the purchase of $2k bags and $600k houses?

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Re: Overheard at Work
« Reply #13295 on: April 28, 2016, 06:20:37 AM »
Is it actually possible though?  Is there any intrinsic value in a name brand purse if no one recognizes the brand value?  If the brand is not adding to the value, then isn't the only value the function of the item?  I suppose design and material could factor in a bit, but there's really no way I can see to value a purse at $2k unless you count brand awareness as some value.

I would argue it is possible. If she really wanted, for example, a blue leather handbag with red velvet interior and a special pocket for her custom cigarette case, she may have to pay a premium for a brand name bag that has all of those features. It's over priced on its merits, but to get exactly what one wants it may be worth it (for them) to pay for more than the sum of its parts. It would have nothing to do with the brand.

Clearly I'm not arguing that a purse is worth $2K. But to get that quality, great looking handbag that you've always wanted? Might be worth it to someone, regardless of what name is stitched on the tag.

Am I on the wrong board?!? Colleague has bought a $2k bag on credit.

This was overheard at work and is anti-mustachian.

This is the board where we mock our colleagues for financial decisions we think are foolish. Sometimes we may judge someone unfairly, mostly we don't because most of the tales here are hilariously spendy.

Might I suggest a separate thread for the justification of the purchase of $2k bags and $600k houses?

$600k houses can be reasonable in some parts of the country.

$2k bags are never reasonable regardless of where you live.

Metric Mouse

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Re: Overheard at Work
« Reply #13296 on: April 28, 2016, 06:44:10 AM »
Is it actually possible though?  Is there any intrinsic value in a name brand purse if no one recognizes the brand value?  If the brand is not adding to the value, then isn't the only value the function of the item?  I suppose design and material could factor in a bit, but there's really no way I can see to value a purse at $2k unless you count brand awareness as some value.

I would argue it is possible. If she really wanted, for example, a blue leather handbag with red velvet interior and a special pocket for her custom cigarette case, she may have to pay a premium for a brand name bag that has all of those features. It's over priced on its merits, but to get exactly what one wants it may be worth it (for them) to pay for more than the sum of its parts. It would have nothing to do with the brand.

Clearly I'm not arguing that a purse is worth $2K. But to get that quality, great looking handbag that you've always wanted? Might be worth it to someone, regardless of what name is stitched on the tag.

Am I on the wrong board?!? Colleague has bought a $2k bag on credit.

This was overheard at work and is anti-mustachian.

This is the board where we mock our colleagues for financial decisions we think are foolish. Sometimes we may judge someone unfairly, mostly we don't because most of the tales here are hilariously spendy.

Might I suggest a separate thread for the justification of the purchase of $2k bags and $600k houses?

Sorry for the foam. I forgot to ask if the black bag was actually orange...
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Tjat

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Re: Overheard at Work
« Reply #13297 on: April 28, 2016, 06:48:24 AM »
Am I on the wrong board?!? Colleague has bought a $2k bag on credit.

This was overheard at work and is anti-mustachian.

This is the board where we mock our colleagues for financial decisions we think are foolish. Sometimes we may judge someone unfairly, mostly we don't because most of the tales here are hilariously spendy.

Nah, you're in the right place. Unless someone is fabulously wealthy and/or easily financially independent, they have no business buying a $2K accessory where an alternative with identical functionality can be purchased for $50. <begin requested judgement> Keep an eye on her facebook, I predict her newsfeed begins with a picture of this beloved purse with a caption similar to "#deservethis", which includes comments from her inane friends like "#totallywantthis" and the absolutely insane "Congratulations!!!". Next she'll continue with a picture of a pet, meal, or glass of wine w/ skyline in background, followed by a MLM inspirational quote/advertisement, then a complaint about her job/financial situation. </end judgement>


Pooplips

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Re: Overheard at Work
« Reply #13298 on: April 28, 2016, 06:53:43 AM »
Sorry for the foam. I forgot to ask if the black bag was actually orange...

Wow! That reference is a few 100 pages old now. Well done.

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Re: Overheard at Work
« Reply #13299 on: April 28, 2016, 07:19:34 AM »
Sorry for the foam. I forgot to ask if the black bag was actually orange...

Wow! That reference is a few 100 pages old now. Well done.

This thread has taken offense to your lengthism. It isn't a 'few 100 pages' yet! Give it about 3 weeks though ;).