Reply to The problems of having your income be bonus driven

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]My total compensation is much higher than base salary because it's largely driven by stocks, bonuses, etc. It's been like this for the last 10 years of working. Base salary under 200k (recently over 200k), total comp 400k+. Whenever I try to get people's input on whether I can buy a nicer house, answer is always something like this

"you shouldn't count on stocks or bonus to pay for your lifestyle, just live off of your base".

Okay, so I'll save the excess bonus money for several years and buy the house I want in cash eventually so I don't need to carry a large mortgage.

But then they say "nooo you shouldn't have all that capital tied up in an illiquid asset, keep your money invested!!!"

So why is it okay for someone with a 400k base salary to buy a 1 million dollar house, but if god forbid your income is slightly variable you have to live ridiculously under your means? It's so annoying. Just tell me it's okay to buy the damn house.[/quote]

It depends.  How would you function if you need $350K+ to afford your house and you have a year or two with only $225-250K?

Because when it's a bonus, there is literally no guarantee (no matter how hard your work) that you won't end up with $0 or only 10-20% of your bonus.  It happens and you have to be prepared to function and not go into debt
[/quote]

So that's why I would simply put more money down to have a lower mortgage payment, or even pay cash which might make sense with these moderately high interest rates. [/quote]

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