Out of curiosity, what is your mortgage payment as a percentage of your gross HHI

[Anonymous]

Anonymous wrote:

Anonymous wrote:15.8% of gross. PITI

to PP asking "why gross?". It's because NET is influenced by a multitude of factors including retirement, health care, tax rates, etc. Using % gross is the best way to compare across different households and financial situations.

gross makes no sense, because it includes taxes. that is money you don't have and will never have, so why is it relevant? i could make $10 million a year, but if i pay $9.9 million of it in taxes, should i calculate my mortgage, savings rate, etc. as a portion of $10 million?

for the reasons you mentioned, net also makes no sense if you are excluding retirement, healthcare, etc. but i don't see why taxes should be included.

where do you live that you have a 99% tax rate? Gross makes more sense because most people have roughly the same tax burdens.

[Anonymous]

7 percent.

[Anonymous]

25%

[Anonymous]

9% of gross.

We bought when our HHI was half of what it is now. We might eventually upgrade, but for now we're just pouring money into 401ks.

[Anonymous]

Anonymous wrote:9% of gross.

We bought when our HHI was half of what it is now. We might eventually upgrade, but for now we're just pouring money into 401ks.

'

what does that mean? Aren't there limits to how much you can contribute to a 401K plan? Like $17K or so?

[Anonymous]

Anonymous wrote:

Anonymous wrote:9% of gross.

We bought when our HHI was half of what it is now. We might eventually upgrade, but for now we're just pouring money into 401ks.

'

what does that mean? Aren't there limits to how much you can contribute to a 401K plan? Like $17K or so?

Yes, we each put $17.5k/year into our 401ks. Our HHI is $150k, and if our housing costs were higher, we couldn't afford to max out 401ks AND save for a new car, college, etc., which we are able to do now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:15.8% of gross. PITI

to PP asking "why gross?". It's because NET is influenced by a multitude of factors including retirement, health care, tax rates, etc. Using % gross is the best way to compare across different households and financial situations.

gross makes no sense, because it includes taxes. that is money you don't have and will never have, so why is it relevant? i could make $10 million a year, but if i pay $9.9 million of it in taxes, should i calculate my mortgage, savings rate, etc. as a portion of $10 million?

for the reasons you mentioned, net also makes no sense if you are excluding retirement, healthcare, etc. but i don't see why taxes should be included.

where do you live that you have a 99% tax rate? Gross makes more sense because most people have roughly the same tax burdens.

you totally missed the point here.

i was using an extreme example to show how ridiculous it is to measure the cost of something against your gross income, when gross income takes into account a sum of money that the government takes and, therefore, is not yours. why count it?

[Anonymous]

The advantage of gross income is that it's easy to compute. We all know our gross. Do you know your net? Have you taken into account tax bills/refunds come April?

Gross is the wrong measure, I agree, but at least it's easy. That's worth more in this case.