Overheard at Work

[Seppia]

I used to live in the states, but three months ago I got a very decent job offer and I returned to my home country (Italy).
In Europe salaries tend to be lower, but on average you get significantly better side benefits.

One of the common ones is the availability of a subsidized meal plan, i.e. companies have either an in house canteen or an agreement with an outside location, so that employees can get a full meal for an insignificant cost (almost always below €2, often below €1).

The company I work for now has it even better: lunch is free.
Yes you read that correctly, you get a very decent three course meal with lots of choices (pasta pizza meat vegetables fruits soups salads etc) for a grand total of ZERO.

Italians tend to be more frugal vs Americans (I thought), so I was completely blown away by the number of people that spend €5-7 to buy a sandwich (a freaking sandwich) at the bar next door.

I mean are these people COMPLETELY INSANE?

You know who's the only one who will absolutely ALWAYS eats at the free canteen other than me?
The CEO.

[arebelspy]

You know who's the only one who will absolutely ALWAYS eats at the free canteen other than me?
The CEO.

Hah.  That bodes well for the company's success, methinks.

And maybe yours, if (s)he notices you doing that.  ;)

[Seppia]

You know who's the only one who will absolutely ALWAYS eats at the free canteen other than me?
The CEO.

Hah.  That bodes well for the company's success, methinks.

And maybe yours, if (s)he notices you doing that.  ;)

He is the reason why I left the USA (which I adore), so yes I absolutely agree it's a great sign for the company (the results since he joined 7 years ago seem to point in that direction as well) :)

[shelivesthedream]

I used to live in the states, but three months ago I got a very decent job offer and I returned to my home country (Italy).
In Europe salaries tend to be lower, but on average you get significantly better side benefits.

One of the common ones is the availability of a subsidized meal plan, i.e. companies have either an in house canteen or an agreement with an outside location, so that employees can get a full meal for an insignificant cost (almost always below €2, often below €1).

The company I work for now has it even better: lunch is free.
Yes you read that correctly, you get a very decent three course meal with lots of choices (pasta pizza meat vegetables fruits soups salads etc) for a grand total of ZERO.

Italians tend to be more frugal vs Americans (I thought), so I was completely blown away by the number of people that spend €5-7 to buy a sandwich (a freaking sandwich) at the bar next door.

I mean are these people COMPLETELY INSANE?

You know who's the only one who will absolutely ALWAYS eats at the free canteen other than me?
The CEO.

Wow. I'm self-employed but I worked on a project last year where everyone involved got lunch every day and dinner if we stayed last six. For free. I loved it! It wasn't totally amazing food (I had a baked potato for dinner literally every time) but FREE and all you had to do was walk downstairs and it was waiting for you!

I wonder if the CEO would consider charging people who don't eat the free lunch? To "cover the losses of throwing away prepared food". The only reason I can think of to go out is to get a bit of fresh air and a break, but there's this amazing thing called "a short walk"...

[Tjat]

Ah. Even worse than the people at my job who turn down the free green mountain coffee for the $4 Starbucks.... Apparently the commercial coffee canisters at work are gross but the commercial coffee canisters at Starbucks aren't

[nanu]

Ah. Even worse than the people at my job who turn down the free green mountain coffee for the $4 Starbucks.... Apparently the commercial coffee canisters at work are gross but the commercial coffee canisters at Starbucks aren't

I have a guy at work who I've seen buy outside coffee, even though we have in-house baristas that will make whatever coffee you want for free

[Seppia]

I wonder if the CEO would consider charging people who don't eat the free lunch? To "cover the losses of throwing away prepared food". The only reason I can think of to go out is to get a bit of fresh air and a break, but there's this amazing thing called "a short walk"...

No need for that, the canteen is a shared one (I work in an industrial area with many many offices right outside of Milan) so it's not only "ours".

It really blows my mind.
I mean you can get a very decent (it's Italy, one of the advantages is that food is on average very good) meal for free, better than the average cheap restaurant, and people choose to eat a sandwich and pay money for that! 5 to 7€!
Remember wages in Italy are fairly low, so that's equivalent to $10-15 in terms of NYC purchasing power.

When HR told me about this benefit I was like
"So how much does it cost me?"
Zero
"What do you mean ZERO? Like, I eat a three course meal for free?"
Yes
"Wait, how many tickets am I allowed per year?"
As many as you like, as long as you use them for yourself, a colleague, a customer
"This is awesome"

[shelivesthedream]

I wonder if the CEO would consider charging people who don't eat the free lunch? To "cover the losses of throwing away prepared food". The only reason I can think of to go out is to get a bit of fresh air and a break, but there's this amazing thing called "a short walk"...

No need for that, the canteen is a shared one (I work in an industrial area with many many offices right outside of Milan) so it's not only "ours".

It really blows my mind.
I mean you can get a very decent (it's Italy, one of the advantages is that food is on average very good) meal for free, better than the average cheap restaurant, and people choose to eat a sandwich and pay money for that! 5 to 7€!
Remember wages in Italy are fairly low, so that's equivalent to $10-15 in terms of NYC purchasing power.

When HR told me about this benefit I was like
"So how much does it cost me?"
Zero
"What do you mean ZERO? Like, I eat a three course meal for free?"
Yes
"Wait, how many tickets am I allowed per year?"
As many as you like, as long as you use them for yourself, a colleague, a customer
"This is awesome"

I didn't mean that the CEO really needed to cover any losses, just that if I had that power I would bloody well do everything I could to make them eat the free food with any excuse available. (Yes, I yearn to be a benevolent dictator...) Does the company not pay the canteen for their lunches just in case they want to eat them? Maybe the opposite would be better, and you could earn an extra few euros a day if you ate in the canteen.

[Seppia]

No, the company pays the canteen only for the redeemed tickets, so I guess they are secretly happy not everyone goes there :)

[LennStar]

In such a canteen I would probably change my 2 meals a day habit to a one big big meal a day and a snack habit ;)

[Warlord1986]

I was talking to a sign vendor. Business owner. He told that in two years he was going to retire. "Fifty years of doing this is enough!"

When I suggested he spend his retirement going to National Parks and seeing some of the country, he said he heard of jobs where people pay you to drive their stuff across country when they don't have trucks. This man is over seventy. :/

[boarder42]

One of the guys I work with recently purchased a $400,000 home.  He is single and makes ~$85,000/yr.  His big idea was that he is now going to do a side hustle (real estate) and has gained so much appreciation (I doubt he actually calculated comps - not sure what he is gauging this appreciation on).  His home is in a suburb about an hour or hour and a half drive out from the DC area.

I'm not sure how he qualified for that loan...but this isn't his first questionable choice, just the biggest I can recall from the last year.

mortgage loans are pretty easy to qualify for, and its usually way more than one should try to afford. my wife's credit is worse than mine so alone on around 90-95k i qualified for up to 500k .

[Kitsune]

One of the guys I work with recently purchased a $400,000 home.  He is single and makes ~$85,000/yr.  His big idea was that he is now going to do a side hustle (real estate) and has gained so much appreciation (I doubt he actually calculated comps - not sure what he is gauging this appreciation on).  His home is in a suburb about an hour or hour and a half drive out from the DC area.

I'm not sure how he qualified for that loan...but this isn't his first questionable choice, just the biggest I can recall from the last year.

mortgage loans are pretty easy to qualify for, and its usually way more than one should try to afford. my wife's credit is worse than mine so alone on around 90-95k i qualified for up to 500k .

This. We have good credit, and, at the time, a household income of about 110k... The bank had approved us for up to 750k for a house. Like, are you MAD?? That's asking for it to be repossessed at the first sign of ANYTHING in your life changing.

[Miss Piggy]

mortgage loans are pretty easy to qualify for, and its usually way more than one should try to afford. my wife's credit is worse than mine so alone on around 90-95k i qualified for up to 500k .

This. We have good credit, and, at the time, a household income of about 110k... The bank had approved us for up to 750k for a house. Like, are you MAD?? That's asking for it to be repossessed at the first sign of ANYTHING in your life changing.
[/quote]

That's insane.

[Kitsune]

mortgage loans are pretty easy to qualify for, and its usually way more than one should try to afford. my wife's credit is worse than mine so alone on around 90-95k i qualified for up to 500k .

This. We have good credit, and, at the time, a household income of about 110k... The bank had approved us for up to 750k for a house. Like, are you MAD?? That's asking for it to be repossessed at the first sign of ANYTHING in your life changing.

That's insane.
[/quote]

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??!

[mm1970]

mortgage loans are pretty easy to qualify for, and its usually way more than one should try to afford. my wife's credit is worse than mine so alone on around 90-95k i qualified for up to 500k .

This. We have good credit, and, at the time, a household income of about 110k... The bank had approved us for up to 750k for a house. Like, are you MAD?? That's asking for it to be repossessed at the first sign of ANYTHING in your life changing.

That's insane.

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??!
[/quote]

You are supposed to buy the biggest house you can afford!! I know that when we bought our house in 2004, we were approved for a $1M LOAN.

Um...now, I don't remember exactly what our income was back then.  But it was still insane.

[infogoon]

My wife and I were preapproved for a $300k mortgage on a combined income of about $65k.

I actually asked the loan officer why she bothered asking how much money we make, because it clearly had nothing to do with figuring out how much we could pay back.

[Pooperman]

DW and I are about to go through the mortgage process in a couple of months. We make around $90k combined with credit scores in the mid-to-high 700s. We want a house costing around $200k, we expect to be approved for about $500k. Insanity!

[maco]

My wife and I were preapproved for a $300k mortgage on a combined income of about $65k.

I actually asked the loan officer why she bothered asking how much money we make, because it clearly had nothing to do with figuring out how much we could pay back.

I think I was making 72 when they told me I could afford a house for 320 or something. I told the loan officer I disagreed and didn't want to go over 300. Ended up in the 280s.

[dragoncar]

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

[TheGrimSqueaker]

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.

[dragoncar]

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?

[dougules]

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?

[Playing with Fire UK]

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.

[Metric Mouse]

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...

[boarder42]

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.

[Metric Mouse]

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.

[exterous]

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

[Fuzzy Buttons]

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.  :/

[mtn]

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]

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]

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.

[dragoncar]

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]

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.

[Inaya]

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.

[dragoncar]

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

[mtn]

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.

[jda1984]

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.

[maco]

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.

[mtn]

Good point--I was talking specifically about the City of Chicago, and for people who bought in the last 2-3 years.

[Digital Dogma]

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.

[merula]

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:

Age	Contribution rate	401(k) balance
<35	7%	$30,000
35-54	8%	$134,000
>54	12%	$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]

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:

Age	Contribution rate	401(k) balance
<35	7%	$30,000
35-54	8%	$134,000
>54	12%	$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]

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?

[mtn]

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.

[Playing with Fire UK]

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:

Age	Contribution rate	401(k) balance
<35	7%	$30,000
35-54	8%	$134,000
>54	12%	$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).

[Prairie Gal]

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?

[boarder42]

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. 

[merula]

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).

[GuitarStv]

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.