At odds with spouse ove how much house we can afford
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Anonymous
People, please follow along- we want to leave for some different features of a house first and foremost- YARD! I have no idea what a defacto private even means- public is public. I couldn't care less about a personal choice to use private schools. Whatevs! I never said one dispariging word about it- it's something that's simply not in our calculus. Please stop interpolating what you think I think. |
Anonymous
There is a big difference between most of DCPS, which is dreadful, and what any reasonable person would label a "de facto private school" system. |
Anonymous
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Forgive me, I only read the first 9 pages of this thread and skipped to the end for a quick contribution. No snark, I promise.
First of all, it is possible to have meaningful dialogue about conflict resolution without discussing specific financial numbers. Almost everyone in my wife's family has this kind of HHI, and one thing I have noticed is that no one talks about how much money they make or what they do with it. It is seen as impolite. I, on the other hand, am from a blue collar family, and the culture is different. They are fascinated by money and talk a lot about how much (or little) everyone is making. Since I am the first one of them to attend college and lucked into a booming industry, I am doing better than most of them and at a much earlier age, and I am starting to get judged by how I spend my money. I only make 1/10th of the situation in this thread, but that is enough for my family members to think I'm insane for not buying this or that (things that would obviously make my 'quality of life' higher). I truly regret telling them anything about my income. Point is, if you share numbers, you will be judged by those who have different values from your own. The bigger the numbers, the harsher the judgement. One thing that bigger numbers do is give us more power (read: options), and there is simply more to say about what "we" would do different from you. The power to save a lot rather quickly, the power to "instantly" recover from lavish expenditures, the freedom to make risky investments that pay off big, to start your own business, etc. There is almost an infinite amount of possibility open to us when we have a stream of income that far exceeds our living expenses. I don't pretend to know the OP's husband, but as a husband and father, I can tell you that the biggest component of 'quality of life' for me is not the amenities of a house; rather, it is having flexibility to work less. True wealth is found in the inverse relationship between money and time. In other words, I feel richer with $5K of monthly income that only takes me 10 hours a week to earn than I do with $10K of monthly income that takes me 60 hours a week to earn. In a phrase: it's all about the passivity of income. Since you have shared some number specifics, I have to say that I would personally invest most of the eggs in your basket into a passive business, (i.e. an apartment complex(s)) that would earn you a 35% cash on cash return, yoy. That would add $20K per month to your HHI, for which you're not trading any time. Then I would buy a personal residence out of the returns, effectively paying nothing for the house. Then I would make an exit plan, retiring from my 60-hour-per-week job to do something more fulfilling. Of course, my investments wouldn't stop there. The apartment complex(s) I bought would have been undervalued and mismanaged ones. By repairing them and installing good management, I will have doubled or tippled their value, which would allow me to cash out some of the equity in those businesses to buy more businesses. And the passive income just keeps growing until I can afford the house I want, in the location I want. In my case, I want a villa in a 5-star resort in the Caribbean, and if I purchase it with passive income streams, I can actually live in a resort area, because I am not tied to a job 'working for the man' in a city that is un-affordable. To not leverage the power you have in this manner is not bad by any means; it just means you have a rather 'middle class' outlook. Thinking only in terms of how broke you want to be vs. how nice of a lifestyle to live is not how the rich think, because it confines your lifestyle to dependency on a salary. The rich leverage other people's time and money so that they can use less of their own to achieve the same things. The "magical" point is when people reach the day they can walk away from money-making but the money keeps coming. They are free of any need to earn a salary. When people have lots of disposable income, they have a very sure opportunity to make this happen rather quickly. So if THAT is the reason your husband wants to buy less house, listen to him, regardless of what you have to personally sacrifice to get there. If there is a plan in place that you can get excited about, it is easy (and sometimes fun) to make the sacrifices. On the other hand, if he wants to buy less house just because he is afraid of going broke, then that would be frustrating, because he is thinking just like an average guy with an above-average income. People like this often times end up just as broke as everyone else, just at a higher level. Here's the litmus test: if you earn the money you do, because you HAVE to in order to support your lifestyle (rather than because you WANT to), you are just like everybody else earning far less. The painful thing to watch is opportunity squandered. I think that is why some people react passionately to questions like the OP is asking. It is, in many senses, the wrong question. A better one is: how do I want to leverage this income to fundamentally change my life. And this leads to worthy conversations about your missing, calling, and passions in life. It is this type of conversation that will help you to find common ground with your husband. Household budget talks are secondary to that and come naturally when an agreement has been made on bigger things, like 'what do I want to do with my life.' Like it or not, but a $1M/year income begs that question, because you have options. Lots of options. ~Just thoughts from a husband. Chris |
Anonymous
Who do you think goes to Whitman or Churchill or McLean or Langley? What does one way or another mean? |
Anonymous
| OP, I love this thread. Maybe that house in CC might be perfect for you b/c there are others around who also have high incomes. It is certainly a mecca for lawyers and very centrally located. I am not sure about the public schools there. Whitman in Bethesda is better than BCC. DH is CC native. |
Anonymous
Ding, ding, ding! It is a great house, in a perfectly fine school district. I don't give a rip the occupations of those by whom we are surrounded, and centrally located is awesome! Please see the subject of this thread- I would be perfectly happy buying this house- but my spouse does not think we can afford/should spend this much. I think we'd be perfectly comfortable, hence the dilemma! Stalemate, again. |
Anonymous
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Hey Chris, I read that book, too. Its called "the 4 hour work week" or "rich dad, poor dad" Great books. If OPs husband is in law, it does not work out quite that neatly. Law is time intensive -- they don't just give out the Million for a few brillant thoughts. Meetings, filings ect -- takes quite a bit of time. Fixing up those ailing apt buildings is not without a time component--OPs new job. We have friends who do this. They both have 9-5 government jobs, and they moonlight a lot to keep all these properties rented, renters happy, toilets flowing ect. Different life from that of a high powered lawyer with intellectual interests.
Perhaps the OP has realized, like many BigLaw wives, that DH is good at what he does, and for some reason wants to keep doing it. Perhaps she would like to secure a home for herself while DH is doing all that working. Maybe later in life, the DH will secure and income stream such as you describe. |
Anonymous
| OP, my DH the same. sigh. I saw so many great houses in Bethesda, no need to show them to you. DH wants to wait, also. |
Anonymous
In what price range were you looking? So you have to stay put in a sub-optimal situation? I feel ya. It sucks! We work out asses off (him more than me hours-wise), why can't we enjoy it a little, all the while making sure to have plenty in savings colleges funded etc.? Must find a way to get through to him. |
Anonymous
| Not working for me. He just bought me a car. We are "looking" in 1.2 to 1.5. I don't think I will ever get him out of this starter home. Or maybe he is right, who knows? |
Anonymous
I am not passing judgement on people who do not wish to spend the time it takes to heavily leverage their cash. My brother-in-law and his wife are both attorneys, and they have zero interest in this sort of thing. They love their jobs and want to work their tails off for the rest of their lives, even if it costs them the other things they want to have in life. That's fine. Not everyone wants to be independently wealthy. To each his own. My greater point is not that my over-arching vision of how to manage this kind of earning power is better; my point is that the lack of a vision can be really frustrating and create dysfunction in a marriage over much smaller issues, like how much to spend on a house. Secondary to that, I am trying to make the point that this much discretionary income has the ability to create income streams that make the mortgage size debate a moot point, regardless of HHI in the future. If you have no line-of-site to get from where you are now to where you want to go, then it can be difficult to make budgetary decisions in this kind of a vacuum. At that point, it will just come down to felt emotional needs and two spouses getting frustrated with one another's shallow reasons. If somebody doesn't "feel" like spending or saving a certain amount of money, that is fine; however, don't expect to get others to buy into that feeling without painting a compelling vision of how it helps you get to an end goal both spouses are excited about--whatever that is. People have mentioned in this thread that DH just needs to see some examples of the types of homes each price point is able to buy, and this will win him over. Maybe. But it should be noted that this might not be adequate if the OP is looking for more than merely getting her way. If DH ends up dismayed over the housing prices and only reluctantly acquiesces to the pressures of providing for his family at a certain level of luxury and is unhappy as a result, then OP will have lost bigger than she ever thought she could win. As for my specific example, it is one of many plans that could give a married couple some deeper, more fulfilling reason to live with less house for the short term. Investing in real estate is certainly not going to be everyone's cup of tea. I'm not making that claim. Nor am I claiming that they key to happiness is building wealth. But better leveraging cash as busy attorneys is not impossible, and doing so is a pragmatic way to solve this problem. By the by, purchasing a house with the end game in mind (the equity you stand to make) might help DH be more comfortable with a bigger capital outlay. But this requires buying the right type of house (one that is undervalued), and adding value to it (renovation). That might be a pain, but it is A WAY to double your investment, and that is A REASON to invest more in the first place. You can end up with a nicer house than you would have been able to otherwise buy. |
Anonymous
| I don't think OP needs career advice when they're pulling in a million a year. OP my DH has learned to spend more as we've earned more over the years. Compromise is important in any relationship. Have you talked to your DH and actually seen houses and sat down and run the numbers. Do you spend in other areas? |
Anonymous
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OP, I think you received a lot of good advice here (in addition to a lot of snark). To repeat some of the points that seem insightful to me and relate some of my own experience:
1. If your DH makes a million as an attorney, I would guess that he's fairly smart, and his claims that you cannot afford a 1.5+million house (it seems pretty clear that you can based on your HHI and savings) are pretext for his belief that your family can satisfy its needs and wants for much less. Without knowing exactly what those are, I can't opine on whether that is, in fact, possible, though it seems to me from my own recent housing search that you can probably find something that meets your important criteria for 1.2-1.3 (See the recent thread on how much a 5 Br. dream house would cost.) I would suggest that instead of framing the issue as how much can you afford that you frame it as much you need to spend to get what you need and want and, rather than a specific number, I'd try to find a range of 200 to 300k (because what you want/need may change as you look at more houses and you don't want to get locked into a particular price point too early.) Also, since you're probably not going to buy a house DH is uncomfortable with, it may be better for you to try to get him to explain to you why you can get everything you want for less than a million, than for you to try to explain to him why you can't. Until he sees how difficult it is to get a 5Br house in your sought neighborhoods for less than a million (unless you buy something on a busy street or real old, etc.), he probably won't change his mind on what he thinks you should spend. 2. The best way to get an idea of how much you need to spend to get what you need and want from a house is to look at lots of houses on the market in your sought neighborhoods. After a while, you'll both understand the differences between various price points and have a decent idea of which houses are actually worth more vs. unrealistic sellers (of which there are a lot). It's probably good to loosely monitor the available listings now, but I suspect that you won't really get the best "sample" at this time because of the extreme lack of inventory. There will likely be a lot more available in the spring. (Fall/winter can be a great time to buy if you know what you want and find a motivated seller, but it probably isn't the best time to do your homework.) We looked for almost a year (and over 50 houses) before placing an offer, and I know others that have taken longer. 3. Things that will significantly affect how much you need to spend are: proximity to a metro stop; if all the bedrooms are on the same level or not; if you need more than 3 or 3.5 bathrooms; if everything has to be recently renovated; and how many luxuries you want/imperfections you can deal with. (For instance, we would have liked an eat-in kitchen, but bought a house without one, because it had almost everything else we wanted.) 4. I'm always amazed at the many people that advocate putting more than 20% down on a house to lower the mortgage amount when someone has a lot of savings like you. That only makes sense financially if you earn less on that money than the interest rate on your mortgage. Given how low rates are now -- even for jumbo mortgages -- I'm not sure that strategy really would make sense for you, unless your husband felt psychologically better carrying less debt. Remember that, because of inflation, the dollars you pay back tomorrow are not as valuable as the dollars you borrow today. 5. I generally think it is better to think of a house as a place to live rather than as an investment, but putting your money into a house can be a strong part of a diversification strategy. At your income level, I would consider talking to a financial planner about this (and 4). 6. There's much more competition as price goes down, as many more people in this area can afford a 800k-950k house than a 1.1 house than a 1.4 house than a 1.7 house, etc. This is important because there have been a lot of bidding wars lately for houses less than 1.1m that are priced reasonably to begin with. So, this may diminish the cost of going up a price point. Good luck. |
Anonymous
Wow! You rock, thanks for the sound and well-articulated advice. I will definitely take it to heart. |
Anonymous
| 6:32. Yes, you rock. Could you please talk to my husband? BTW, I am not the OP. |