Reply to At odds with spouse ove how much house we can afford

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[quote=Anonymous]Forgive me, I only read the first 9 pages of this thread and skipped to the end for a quick contribution. No snark, I promise.

First of all, it is possible to have meaningful dialogue about conflict resolution without discussing specific financial numbers. Almost everyone in my wife's family has this kind of HHI, and one thing I have noticed is that no one talks about how much money they make or what they do with it. It is seen as impolite.

I, on the other hand, am from a blue collar family, and the culture is different. They are fascinated by money and talk a lot about how much (or little) everyone is making. Since I am the first one of them to attend college and lucked into a booming industry, I am doing better than most of them and at a much earlier age, and I am starting to get judged by how I spend my money. I only make 1/10th of the situation in this thread, but that is enough for my family members to think I'm insane for not buying this or that (things that would obviously make my 'quality of life' higher). I truly regret telling them anything about my income.

Point is, if you share numbers, you will be judged by those who have different values from your own. The bigger the numbers, the harsher the judgement. One thing that bigger numbers do is give us more power (read: options), and there is simply more to say about what "we" would do different from you. The power to save a lot rather quickly, the power to "instantly" recover from lavish expenditures, the freedom to make risky investments that pay off big, to start your own business, etc. There is almost an infinite amount of possibility open to us when we have a stream of income that far exceeds our living expenses.

I don't pretend to know the OP's husband, but as a husband and father, I can tell you that the biggest component of 'quality of life' for me is not the amenities of a house; rather, it is having flexibility to work less. True wealth is found in the inverse relationship between money and time. In other words, I feel richer with $5K of monthly income that only takes me 10 hours a week to earn than I do with $10K of monthly income that takes me 60 hours a week to earn. In a phrase: it's all about the passivity of income.

Since you have shared some number specifics, I have to say that I would personally invest most of the eggs in your basket into a passive business, (i.e. an apartment complex(s)) that would earn you a 35% cash on cash return, yoy. That would add $20K per month to your HHI, for which you're not trading any time. Then I would buy a personal residence out of the returns, effectively paying nothing for the house. Then I would make an exit plan, retiring from my 60-hour-per-week job to do something more fulfilling.

Of course, my investments wouldn't stop there. The apartment complex(s) I bought would have been undervalued and mismanaged ones. By repairing them and installing good management, I will have doubled or tippled their value, which would allow me to cash out some of the equity in those businesses to buy more businesses. And the passive income just keeps growing until I can afford the house I want, in the location I want. In my case, I want a villa in a 5-star resort in the Caribbean, and if I purchase it with passive income streams, I can actually live in a resort area, because I am not tied to a job 'working for the man' in a city that is un-affordable.

To not leverage the power you have in this manner is not bad by any means; it just means you have a rather 'middle class' outlook. Thinking only in terms of how broke you want to be vs. how nice of a lifestyle to live is not how the rich think, because it confines your lifestyle to dependency on a salary. The rich leverage other people's time and money so that they can use less of their own to achieve the same things. The "magical" point is when people reach the day they can walk away from money-making but the money keeps coming. They are free of any need to earn a salary. When people have lots of disposable income, they have a very sure opportunity to make this happen rather quickly.

So if THAT is the reason your husband wants to buy less house, listen to him, regardless of what you have to personally sacrifice to get there. If there is a plan in place that you can get excited about, it is easy (and sometimes fun) to make the sacrifices. On the other hand, if he wants to buy less house just because he is afraid of going broke, then that would be frustrating, because he is thinking just like an average guy with an above-average income. People like this often times end up just as broke as everyone else, just at a higher level. Here's the litmus test: if you earn the money you do, because you HAVE to in order to support your lifestyle (rather than because you WANT to), you are just like everybody else earning far less.

The painful thing to watch is opportunity squandered. I think that is why some people react passionately to questions like the OP is asking. It is, in many senses, the wrong question. A better one is: how do I want to leverage this income to fundamentally change my life. And this leads to worthy conversations about your missing, calling, and passions in life. It is this type of conversation that will help you to find common ground with your husband. Household budget talks are secondary to that and come naturally when an agreement has been made on bigger things, like 'what do I want to do with my life.' Like it or not, but a $1M/year income begs that question, because you have options. Lots of options.

~Just thoughts from a husband.
Chris[/quote]

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