Reply to If you are middle class (<150k HHI), how would things be different if you were rich (>400k HHI)

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Yes it is middle class. I standard government or military salary is middle class. If you have to live far from the city and have a long commute to work in order to comfortably afford housing, you are middle class.

The point is that people in the &gt;400k range don’t need to make those compromises. That is the difference. Whdd we n you are rich you can have what you want.[/quote]

$150 is Not middle class.  You don't have to have a far commute, you just get a smaller house, like we did.  And very few people need to live close to DC/city.  We don't.

At under $150K we live very comfortably.  Kids are in multiple activities (expensive), private weekly music lessons, almost paid off house, college savings (at this point enough to pay for a state school, room and board and extras), retirement savings, paid cash for our last vehicle and will for our next.  And, we do things like carry out a few times a week.  Its how you spend your money.  If you choose crazy high housing costs, sure, you can be house poor but is poor financial decisions not middle class.[/quote]

PP, when did you buy your home? You say it's almost paid off, so did you buy a long time ago, put down a huge downpayment, or double-up on payments? What is your PITI? [/quote]

You don't want to double up on payments or do an extra payment a year.  If you double up, you are also paying interest.  You want to pay down the principal.  You want to refinance if you have a high interest rate.  If your interest rate is good and you are paying in extra, you want to regularly recast it.  I wish I knew about recasting years ago but thankfully someone spoke of it here.  With the recasting we've maybe saved $600-700 a month (but it depends on our property taxes and insurance that get taken out although we could pay it separately).  For recasting, we have only had to pay a $250 fee each time.  Some make you do a lump sum but they didn't require us to as we paid in extra each month consistency to principal.   Google recasting.  Thats made a huge difference for us.  First time we did a recast, we reduced our payment maybe $500, and the second recast, was $100 a month.  We also refinanced to a 15 year mortgage maybe 4 years into our 30 as we got a big rate drop.  We put down 20%.  Our actual mortgage now might be $1400 or so.  I haven't looked as we continue to pay the original amount which was usually $2000-2400.

We bought the cheapest house on the market when it was high years ago.  Its tiny and was a complete dumb so not the normal bidding war as many people didn't want it as it was a project house.  We've had to redo everything (although we still have stuff to do) but mainly DIY except the big things like the roof/siding, so that has saved a lot of money.

It is almost paid off.  We could pay it off now but I'd rather use the money to buy my spouse a really nice car and pay cash as that's what we did a few years ago for me (they take my car so eventually I'll want it back - or they'll keep it and I'll get a new one).[/quote]

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