43% of home purchases are all cash

[Anonymous]

To the $60K savings per year Poster: Have kids. Come back after you have kids and update us.

At this point your financial advice is a lot like a person who doesn't have kids giving a parent advice on how to raise a child. You don't know what you don't know.

And yes, you are smug.

[Anonymous]

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Anonymous wrote:Only first time homebuyers put down just 20%!

On our second home we put down 60%. It's easy. Live your life on one income and save the other's income.

Do you live in the DC metro? Or are you married to a law partner? or you are are old. B/c with daycare running $3k/month for two kids, mortgage for a basic starter home at $3k/month, you have to clear $200k to 'save the other's income'.

No. We make HHI 180k. We aren't Asian (although I do agree they are good savers). We don't have children yet, but considering our mortgage is only $1500 on our 700k house, it won't be such a struggle with daycare. We lived on one income since we got jobs and saved 60k a year. We still take great overseas vacations and don't feel pinched at all.

Come back when you have kids. You are really fortunate and I say congratulations, but you come across as smug. Not everyone makes as much as you nor have they been as fortunate.

Not smug one bit. Not even that proud about it. But I'm sick of everyone saying they can't do it. We haven't always made this much either.

Than how did you save $60k/year for at least 7 years to get your $400k downpayment?? That requires about $100k additional pre-tax salary, so where did savings come from? Any outside help or lucky investments (ie you bought before the last bubble?)

It was our second home... We did make money on the sale of 1st home, but we also put a lot of equity into it. We had a high mortgage.

You're speaking so far out of your ass at this point that you should really refrain from giving household savings tips to others. I say this as someone who shares your sentiment: too many people say it's too hard, too much of the time. That said, you've materially misrepresented your situation and left off -- and, here, as elsewhere I'll constrain myself to speaking from experience -- one major component of savings/consumption: children.

I'll break it down for you. In DC, daycare will run about 2k per month for the first 3 years (that's an average). It will decline by a few hundred dollars in subsequent years. **(See below.)

Once your child reaches school-age, you'll quickly realized that school hours are short, much shorter than working hours. So you'll need some care around the ends of the day. And in the summer. You'll either be looking at an au pair or some other arrangement costing about the same.

Next, with your income, you'll likely be hit by the AMT. That hurts. Factor in about 5k in additional taxes.

Finally, the child will really squeeze your day. Effectively, career-advancement is on-hold for a few years. This is the trade-off you should be cognizant of going-in, and acknowledge that you're fortunate enough to be in such a position. But, this does limit your income gains for at least a few years.

Oh, and start saving for college. But, honestly, on 180k, this will be tough. You're in the exact wrong spot for college: high enough income to not qualify for financial aid, but not high enough that you can comfortably swing the cost out-of-pocket. Yeah, this will suck, so start planning ahead now.

Signed,
Parent of 2, HHI @300k, mortgage around 900k.

**Yes, you can find cheaper daycare options. But, extrapolating from your HHI, you'll probably find the cheaper options not to your liking. A family daycare may be fine for most people (and I personally believe it is in no ways inferior), but you'll probably elect to go a more corporate route. Probably located nearer to your employment.

I do realize what you're saying. We waited until we had a home we wanted to raise children in before having children. Our mortgage is very low ($1500) so that we can afford children, saving for college, daycare or even if one parent wants to stay home. We love that low mortgage. I'm not speaking out of my ass... I'm not trying to give household tips to others. I would never, but I don't think it's fair to say that only Asians can save or that it's not doable in this area. Yes, it's harder.

No, you don't realize what I'm saying. The picture you should be getting here is that you *don't* know.

I used to be the same way, before I had kids. They really are blood-sucking financial leeches.

Each child will cost around 2 times your current mortgage payment, not including saving for college. Your fabulous vacations just got 25% more expensive. (You have to buy a full-price seat after age 2; the hotel room will stay the same.)

[Anonymous]

NP here.

I don't agree that Asians save the most. Since you mentioned it, the Asians I know (many) are stretching it to live in what they think is the best school system, signing up for too many classes for their children, and guarantee early burn out, and limited social skills for their children.

I have news for you, social skills do not come from rote memorization, nor does doing what you love while getting paid for it. And being focused on money, money, money is a set up for failure.

Not all Asian children like what their parents are doing to them, and the parents often do not see the reality, and the wrongful repercussions.

Give me my upbringing any day. I don't need to keep up with the Kims, thank you very much.

[Anonymous]

Wish I could have bought a house with cash.

Good job to the poster who put down 60%. I can't wait to get rid of my mortgage!

[Anonymous]

Anonymous wrote:

NP here.

I don't agree that Asians save the most. Since you mentioned it, the Asians I know (many) are stretching it to live in what they think is the best school system, signing up for too many classes for their children, and guarantee early burn out, and limited social skills for their children.

I have news for you, social skills do not come from rote memorization, nor does doing what you love while getting paid for it. And being focused on money, money, money is a set up for failure.

Not all Asian children like what their parents are doing to them, and the parents often do not see the reality, and the wrongful repercussions.

Give me my upbringing any day. I don't need to keep up with the Kims, thank you very much.

I agree you don't need to keep up with the Kim's because there are plenty of barista positions for your liberal arts graduating kids. Actually that might be a bad idea because the Kim's don't like to waste money and make their own coffee. FYI kim is korean and there are other Asians you ignoramus.

[Anonymous]

Anonymous wrote:Only first time homebuyers put down just 20%!

On our second home we put down 60%. It's easy. Live your life on one income and save the other's income.

As a single parent - I felt very fortunate to be able to put down 20% on our second home (I only put down 3% on my first home - gasp). Lucky you to have two incomes.

[Anonymous]

Kim was an example, you ignoramus. If I told you where our degrees were from, it would shut your big mouth up very quick.

Then again, I doubt you know when to shut it.

I hope I don't employ you, if I do, its not for long.

[Anonymous]

Anonymous wrote:Kim was an example, you ignoramus. If I told you where our degrees were from, it would shut your big mouth up very quick.

Then again, I doubt you know when to shut it.

I hope I don't employ you, if I do, its not for long.

Uh huh, so you are going to fire asians? Maybe just the kims.

[Anonymous]

Anonymous wrote:Kim was an example, you ignoramus. If I told you where our degrees were from, it would shut your big mouth up very quick.

Then again, I doubt you know when to shut it.

I hope I don't employ you, if I do, its not for long.

Our degrees? Did it take a group effort?

[Anonymous]

How is your bitching about the high cost of kids any different from my bitching about the high cost of travel to Bali this year?

You make your choices. Live with them.

[Anonymous]

Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Only first time homebuyers put down just 20%!

On our second home we put down 60%. It's easy. Live your life on one income and save the other's income.

Do you live in the DC metro? Or are you married to a law partner? or you are are old. B/c with daycare running $3k/month for two kids, mortgage for a basic starter home at $3k/month, you have to clear $200k to 'save the other's income'.

No. We make HHI 180k. We aren't Asian (although I do agree they are good savers). We don't have children yet, but considering our mortgage is only $1500 on our 700k house, it won't be such a struggle with daycare. We lived on one income since we got jobs and saved 60k a year. We still take great overseas vacations and don't feel pinched at all.

Come back when you have kids. You are really fortunate and I say congratulations, but you come across as smug. Not everyone makes as much as you nor have they been as fortunate.

Not smug one bit. Not even that proud about it. But I'm sick of everyone saying they can't do it. We haven't always made this much either.

Than how did you save $60k/year for at least 7 years to get your $400k downpayment?? That requires about $100k additional pre-tax salary, so where did savings come from? Any outside help or lucky investments (ie you bought before the last bubble?)

It was our second home... We did make money on the sale of 1st home, but we also put a lot of equity into it. We had a high mortgage.

Can you elaborate on when you bought, for how much, and what it appreciated to? What kind of equity did you put into, like you are a handyman and reframed an addition? And started with 20% downpayment then?

So this was in DMV, what was your approach? We are first time home buyers and trying to see how to make it to have a huge downpayment for our next home. Unfortunately we aren't super handy, so hopefully that wasn't your appoach?!

PP here, yes we live in DMV. We put down 20% on our first home at 24 which was a small foreclosure (a little under market value, but not much and we didn't do much work to it). Prior we lived with roommates to save (and because we enjoyed roommates in DC at that age). We got a 10 year mortgage so that our payments, savings and tax deductions would be higher. The place did increase in value. Then we sold and were able to put down 60%. It came combined from equity and also from savings. We lived on one income and the other automatically went to investments. We don't drive that old of cars (5 years old), still vacation, etc, but we save a lot.

I know a lot of people on this board think owning homes isn't the best investment strategy, but for us we feel like it is. It's a lot better than paying rent and the tax deductions help (a little). We like building equity in our home instead of paying a landlord's mortgage.

We have talked that maybe it would have been better to keep saving until we were in our 30s and could just buy one house, but we did house hop. I think there are many different ways to go about it.

At 24 you had saved up at least $60k in cash and had stable jobs to buy a house (assuming generally the cheapest house you can buy in DMV is $300k). At 24, I was still grappling with student loans and barely making $60k/year? What did you guys study and how did you start off debt free? That's the problem for most first time home buyers, jobs since 2000 have been kind of lackluster unless you are a lawyer, and even lawyers generally have huge student loans.

As for most people on this board not thinking real estate is good investment, are you kidding? 99% of people on this board think real estate is the way to go; the problem is affording it compared to renting. Putting off kids gave you a lot of flexibility; we were only together 3 years before we had kids, thus the crappy foreclosures and roommate situation weren't really options for long -- once kids come you want a decent place. When did you buy the foreclosure, 2009?

[Anonymous]

Anonymous wrote:How is your bitching about the high cost of kids any different from my bitching about the high cost of travel to Bali this year?

You make your choices. Live with them.

Wow, I didn't know Bali was going to pay for your social security!

[Anonymous]

Anonymous wrote:To the $60K savings per year Poster: Have kids. Come back after you have kids and update us.

At this point your financial advice is a lot like a person who doesn't have kids giving a parent advice on how to raise a child. You don't know what you don't know.

And yes, you are smug.

+1Million and from somebody who is cheap like uncle Scrooge and certainly could not care less about what the Joneses are doing (and I am not Asia)

if you live in DC, come back after you have 2 of 3 kids and let us know. the first 4 years of our 2 kids' life cost us abot $140,000 in daycare costs alone (and that was from 2005 to 2013, paying for an infant now cost much more than in 2005, it's about $2000 at our former daycare.). we lost about additional $100K when one of the kids develope a serious health issue and I had to go part time (see, sometimes you cannot save an entire salary because you do not have an entire salary). and this is just the beginning. please don't talk about things you don't know about. have kids first and then come back and we discuss

[Anonymous]

Anonymous wrote:

Anonymous wrote:Kim was an example, you ignoramus. If I told you where our degrees were from, it would shut your big mouth up very quick.

Then again, I doubt you know when to shut it.

I hope I don't employ you, if I do, its not for long.

Uh huh, so you are going to fire asians? Maybe just the kims.

huh?

[Anonymous]

Why is someone without kids even on this site? One of the big lessons of parenthood is that very few things are just that easy and many things don't work out according to your best laid plans. You just figure it out a little bit at a time.