Reply to How did you afford your $1M plus home?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]OP again. We take home about 19k (after paying into healthcare costs which are high for our firm, 401k, etc). Nanny is 3500/month. Family help is about 2k/month now but that will go up in time. We've also had to bail out the parents from a foreclosure and pick up emergency health expenses so all of those things took a toll early on and ate up money we could have saved. Also, we weren't as disciplined about savings until the last few years (paid for our own modest wedding etc). Student loans from college are 1k/month. Hoping we find a house eventually that has room for an au pair so we can cut way down on childcare costs. For those who have incomes similar to ours, thanks so much for posting your budgets. We know we can cut down in some areas but there aren't huge areas of excess (lavish vacations, jewelry, fancy clothes, cars, etc). 
I'd like to put together a larger downpayment (wait until we can save enough) rather than raising our monthly cost if possible. It just seems excessive to spend more than 4500/month. We realize our HHI income is high now so it worries me to take on even more monthly expense.[/quote]

I think your situation demonstrates very nicely the hedonic treadmill and why people who earn lots of money still feel poor.  Just think about how "rich" you would be if you discarded your attachment to the $1 mil house and bought a $500k house.  You'd be rich!  But since you've developed this concept that you have to have a $1 mil house, you're essentially going to be financially exactly the same as my family in terms of disposible income (we earn almost half what you do and are looking for a 500k house).  I guess you could argue that you get 2x the pleasure out of your $1 mil house as I do out of my $500 k house.  But I truly believe that we adjust to our circumstances in terms of happiness -- as long as your home is safe, clean, and comfortable, you won't really notice the difference.

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By your logic then, shouldn't you be looking at a $250K house?  Why do you think you should buy at the same price point as you when they make twice as much.  This doesn't make any sense to me[/quote]

Yeah, we're trying to go as low as we can and not compromise the uncompromisable, like lead paint/moldy basement, an unmanageable and costly commute, and feeling like we can walk around at night w/out being mugged!  We'll do that for as low as we can go, but $500k seems realistic at this point for "adequacy," though I am hoping for more in the 400k range.  If we can't find it, we'll continue renting.  I'm sure there's a term for this in economics:  the base level you need that you can't go below, which in my opinion is $500k for DC for upper middle class people.  Is it "inelastic"?

Perfectly willing to admit that this is subjective and am willing to be argued below that! [/quote]

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