What HHI does a family of 5 need to feel comfortable: NW DC or close-in Bethesda/Nova

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What do people spend their money on? I have a HHI of $250k, just finished paying off student loans, three kids (2 in public, 1 in daycare) and live comfortably. Vacation a few times a year, max out retirement and put money in 529s. We don’t have a ton left over after all that, but feel comfortable.

Our mortgage is $3500/month.

This is me, too, with one kid in private. Live in a 4br townhouse in very close-in Nova, bought for about $900k in 2018. Refinanced last year to 2.6%.

I honestly don't know what people are spending their money on who make twice as much!

$3500 is my mortgage on 550K. So either you had a huge down-payment or something is amiss with these numbers.

PP here. Down payment was 20%, mortgage is also $3500, so not sure what is amiss?

I think the missing puzzle piece is that you refinanced, which extended your mortgage term and incorporated a bit of the equity you already had, thereby lowering the payment a little from what it would otherwise be. The normal payment on a 720k mortgage at 2.6% with reasonable tax and insurance assumptions is more like 3.9k. Although PP with 3.5k on a 550k loan must have a really bad interest rate

[Anonymous]

275K/year if you do public school and are ok using metro and/or driving reasonable cars (mid-range toyota).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There was thread recently on Reddit where they mocked DCUM for its cluelessness. This is why. If you need 600k to be comfortable, you are doing something wrong or your head is up your arse.

If you read the budgets of all these "need $600k to be comfortable" posters, the fine print is that they are saving $8-15K/month IN ADDITION TO RETIREMENT.
So yes, if a line item in your budget is to save vast sums of money each month, you are going to "just be making it" on a 1% income.

that 8-15k is for retirement...most wealthy people's largest retirement assets are not an IRA or 401(k)... my taxable is far larger than our combined 401(k)s and will always be. If you are making 600k + you need to save WAY more than the max 401k allotments to be in any shape to retire comfortably.

You're nuts. We make 600k and have over 1M in our roth and 2.6M in out 401ks. We are only 45. We will not even need a penny from our brokerage to live incredibly well. With 10 more years of contributions, we will retire very comfortably on over 8M in company sponsored retirement plans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are a family of 4, so this may not apply, but our HHI is 575 and we feel more than comfortable. Sadly it's easy to get to the point where you always want more (more retirement! more for college! more vacations! maybe private school really is the way to go!), but this is plenty.

Our main expenses are the mortgage on our 1M house, kids activities, retirement, and college savings (if those count as expenses). We have no plans for a nice car (our two are worth a combined 15K), private school, more than one vacation a year, or expensive home updates.

(FWIW, we don't care where our clothes come from or what kind of cars we drive. So what if my pants come from target and I drive a Honda Fit? Somebody might disapprove? So? Why would I that bother me?) (But it's possible it's easier to not be bothered because our income is high)

We have your exact lifestyle in Au park on $375k. Where is the rest of your money going? I am truly puzzled by posts like this.

+1. Same here. I honestly don’t understand what people blow their money on.

Agree, except our HHI is $150k or so and we live in a 5 bed house close in, vacation in Europe and Maine, or elsewhere in the US each year, plus plenty of other trips, have kids in activities, Max retirement and adequate college savings. I have no idea why others think you need so much more!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What do people spend their money on? I have a HHI of $250k, just finished paying off student loans, three kids (2 in public, 1 in daycare) and live comfortably. Vacation a few times a year, max out retirement and put money in 529s. We don’t have a ton left over after all that, but feel comfortable.

Our mortgage is $3500/month.

If you bought in the last 5 years, that total mortgage cost is cleary not for a home in NWDC or Bethesda, close-in

That's prob a mortgage on a 750k home...which works great on a 250k income

A close in crack shack in Bethesda is now closer to 1-1.2M, which you couldn't COMFORTABLY afford

I just posted that Brother can’t find a place on 300k. He is finding that complete run down crappy places all cost over $1m. He is trying to get something in the 800k range. This is a single guy not looking for a ton of space or thinking about school districts.

Then he’s an idiot because there are plenty of great places at that price if he truly doesn’t want anything large and doesn’t care about school district!

[Anonymous]

Anonymous wrote:There was thread recently on Reddit where they mocked DCUM for its cluelessness. This is why. If you need 600k to be comfortable, you are doing something wrong or your head is up your arse.

Link?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There was thread recently on Reddit where they mocked DCUM for its cluelessness. This is why. If you need 600k to be comfortable, you are doing something wrong or your head is up your arse.

If you read the budgets of all these "need $600k to be comfortable" posters, the fine print is that they are saving $8-15K/month IN ADDITION TO RETIREMENT.
So yes, if a line item in your budget is to save vast sums of money each month, you are going to "just be making it" on a 1% income.

that 8-15k is for retirement...most wealthy people's largest retirement assets are not an IRA or 401(k)... my taxable is far larger than our combined 401(k)s and will always be. If you are making 600k + you need to save WAY more than the max 401k allotments to be in any shape to retire comfortably.

You're nuts. We make 600k and have over 1M in our roth and 2.6M in out 401ks. We are only 45. We will not even need a penny from our brokerage to live incredibly well. With 10 more years of contributions, we will retire very comfortably on over 8M in company sponsored retirement plans.

Am I? Or do you just choose to put all your money in IRAs. My wife and I put 75K+ into our IRAs but we put well more into our trust. So do the math, clearly my trust will be much much larger.

Every wealthy person I know has a brokerage account that’s multiples of their retirement assets.

[Anonymous]

800k HHI, own our home (no mortgage), two kids in private school, save 20% net income for retirement and college, take one vacation a year, share one care…a Subaru.

I feel like life got more comfortable (meaning we didn’t have to worry constantly about money) l when we hit the $600k mark. OP is onto something…

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Everyone's definition of comfortable is different. Some people are comfortable driving a Subaru or Ford. I would shoot myself. Some people think 4000 sqft house is needed to be comfortable. That's way too big for me. Op, your question is unanswerable

I can’t begin to understand your car comment. You’d shoot yourself if you drove a Subaru?

NP

You really can’t understand that comment? I totally can. A boring car, especially if you have a long commute, is god awful. I like luxury when I drive far.
I’m not really sure what’s so hard to understand about that. Different strokes for different folks and all that.

PP is just overly dramatic. Shoot yourself for driving a Subaru? Tell us that you're privileged without telling us that you're privileged. Please.

For PP, it's a status thing. Many people convey their car as a symbol of status and wealth, or something that they can easily show off to neighbors. If you're secure in where you're at, it's not that big of a deal. To each his own.

Not everything in life is about status sweetie. If I was the last person on earth I still wouldn't wear walmart clothes and drive a subaru. Besides, that wasn't the point of the post. The point of the post was that different people have different preferences and there is absolutely no remotely agreed upon definition of "comfortable." Hence this entire thread is pointless.

[Anonymous]

Right now interest rates are high, making the owning part hard. but if you rent, I'd say 350 is comfortable upper middle class if you use public school (yes, I think that B-CC is pretty good)

[Anonymous]

Anonymous wrote:I’m coming to the sad realization that the basics of a good middle class lifestyle cost a fortune around here. A house with Bedrooms for all the kids, college, annual family vacation, saving for retirement. Is 600k the point where all this becomes doable without financial strain?

Granted we bought our close in house a ways back, but at the time it was a little over 3xs our income (and interest rates were 8.5% back then). Going by that, I'd say you could do it with a $375/$400 income. 2 kids in college, and we are retiring on January 2

[Anonymous]

We’re a family of 4, soon to be 5 in 2025. Our HHI is $250k and I wouldn’t quite say we’re comfortable. We’re stable but to maintain our savings at the same level, home maintenance, and vacations as we’d like, we’d need $400k. We’ll be close to that as we near retirement but by then it won’t matter as much as the children will be adults.

[Anonymous]

Anonymous wrote:We are at 270k and feel comfortable. We live in NW DC and have one car. Just depends on how you budget and spend your money.

We’re about the same, 2 cars, 2 kids in public, pay for mortgage, live close in MD.

[Anonymous]

We are in Bethesda. Once we hit 600k HHI, we didn't really care too much. could easily save 150k +, live how we want, decent home in an established neighborhood.

Once we hit 750k, we felt like we could still save our 150k + a year plus send two to private without worry.

400k was the point where I did feel somewhat flush but our savings wasn't nearly as high

[Anonymous]

Family of 7, HHI of $90k and we live downtown. Everyone is happy and well-provided for. If you have your priorities, it's not difficult.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are at 270k and feel comfortable. We live in NW DC and have one car. Just depends on how you budget and spend your money.

We’re about the same, 2 cars, 2 kids in public, pay for mortgage, live close in MD.

+1 we got lucky with real estate timing and our close-in PITI is undeR $1500/mo. It’s not a luxurious house, and our car is a dented Toyota, but we have decent savings and take nice vacations.