Reply to It’s extremely hard to raise kids in a nice neighborhood without generational wealth

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]7 pages in and everyone is contributing their own version of “screw you, I got mine” while ignoring OP was focused on those under 35 buying $2-3M homes.

We get that many of you saved aggressively and traded up between mid 30s to 50s. You all keep repeating the same story that ironically was only possible for most of you because of unprecedented property appreciation in this country since 2008. Yet you all think you’re brilliant for benefitting from a macroeconomic trend.

[b]How many PP’s bought a $2-3M home under 35 with kids without parental support or a trust in the DC area?[/b][/quote]

My 28-year-old son and his 27-year-old wife just purchased a $2M home in McLean with $1.2M down and an $800K mortgage. He graduated in 2020 and is currently working as a senior software engineer for Amazon for a cool $350K/year. His wife graduated in 2021 and is currently working for Google for a cool $300K/year. They got married in 2020 and lived with my wife and me for five years to save the $1.2M down payment (with some luck in the stock market) prior to purchasing the home. They plan on paying off the mortgage in the next two years. It is not that difficult.[/quote]

Sounds like a piece of cake![/quote]

it is, with the right life choices around employment, having children, and saving vs spending.  All actions have consequences, some more favorable than others.  And, people prefer different things, which is also fine, so they make different choices.  None of it necessarily depends on "generational wealth", though.  [/quote]

Getting two FAANG jobs straight out of school and having parents with a literal guest house in a major city is not something anywhere close to a “piece of cake.” And if you think access to a guest house in a major city isn’t tapping generational wealth, you’re out of your mind.[/quote]

You're extrapolating from one anecdote.  Plenty of young physicians, BigLaw attorneys, and entrepreneurs who saved diligently and limited their family size have expensive homes at relatively young ages, all without generational wealth paying for anything.  If you obtained an education which qualified you for only low income employment, or if you spend wantonly, you're not going to be in that group.  If you have a large family at a young age, fail to save and invest diligently, or engage in other asset-sapping behaviors, you're not going to be in that group.  [/quote]

Two big law attorneys married to each other are not buying a $2-$3 million house as their first home unless they have generational wealth. Why? They typically have at least 400k combined in loans. And they're usually not graduating from law school until they're 28. Starting salaries in big law are still much lower than your FAANG child's salary (250k first years vs. 350k). HHI of 500k-600k plus 400k in loans cannot afford a $2 million house.

Source: Am biglaw. [/quote]

I didn’t have any law school debt (thanks mom and dad), and one big law salary plus another similar salary was enough to buy the equivalent of $1.5m
house twenty years ago after only a few years of working, renting and saving. Also, I was 25, as were my closest friends, when I graduated law school. [/quote]

You also benefitted from generational wealth! You (and your generation) also benefitted from lower educational and housing costs (controlled for inflation).

Most T14 students have at least 2 years between undergrad and law school. At Michigan, for example, the average entering age is 24.6. Most people are graduating at 27-28. Then a good chunk take a clerkship (where the pay isn't great). Then you start in biglaw as a second year at 30 making 275k (including bonus).

If you borrow the entire cost of your T14 education, you'll graduate with around 400k in debt. If you choose a standard repayment plan with a ten-year term, you'll pay $5,000 a month servicing your debt. And it would be idiotic to only pay down the minimum, especially if your goal is to buy a house. If you had two biglaw incomes and wanted to live really frugally, it would still take ages to save up the 500k down payment. You take home after the minimum debt payment is only $9,500. Subtract necessary expenses for a 1BR apartment, utilities, food, clothing (for work), medical, emergencies, and it would likely take you at least 5 years making only minimum debt payments to save 500k for a down payment on a $2 million house on TWO biglaw salaries.

So no, it is not reasonably possible to buy a $2-3 million house in your early 30s, even with biglaw, without generational wealth. Fortunately, there are many other excellent houses you can buy in this area for far less. [/quote]

It is possible actually. I went to a T14 and got a merit scholarship that covered 200k. My parents helped me with groceries in law school - about $150 a month. They make under 150k.  I graduated law school at 24 (turned 25 the summer after law school).

I paid off 100k very quickly within 2.5 years. Saved aggressively almost my entire big law income while living off my DH’s non-lawyer income (140k in our mid 20s, 200k by our 30s). Covid ramped up our savings significantly because all of our disposable income for travel, eating out, etc went to savings. By the time we were early 30s (I was 6 years into big law by then and making 500k), we had saved more than enough for a 20% down payment and bought our forever home for 2M.

It’s certainly not common but it is doable without generational wealth. [/quote]

Did you find it risky having a $1.5M mortgage on $700K HHI given your salary would likely decrease if you didn’t stay in big law / make partner?

We make $700-800K early 30s but even with 20% down we are too worried about job security / getting paid this much for another 20-30 years to jump on a $2M+ home.

If we had rich parents who could bail us out or the entire mortgage balance in an account where we could pay off the mortgage in case of job loss we’d do it but right now it feels too risky until we accumulate a lot more savings. [/quote]

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