Anonymous
Post 07/06/2016 13:41     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:PP here who bought house in 99. When I started out, 20+ years ago, I noticed that my senior colleagues were much much better off than me. They made more than me, sure, but the big difference was that they were paying the same in mortgage payments as I was for my one bedroom appt.

I realized that buying a house is insurance against rent increases. So, I bought what I could afford -- on my income. Money was tight for the first few years. But in time, my income increased -- from 60K when I bought the house (1999) to 170K now. Some of that was inflation, but most was career growth. Now, my mortgage was at 8%, not 3.7%. So, with the same monthly mortgage payment as a fraction of income, I would be able to borrow 480K with an inflation adjusted salary to 85K. (same Loan to debt ratio).

That means a 600K house, which is basically what I live in.

More to the point, when we hire someone out of grad school, after a few years (same place in life), they are making about 100K. At 100K, with current interest rates, they could buy my house today.

In 20 years, assuming modest inflation, they will be comfortable/



r.
You won the housing lottery and totally ignoring the difference between a $40k down payment vs $120k down payment.


I took a risk. It paid off. I also work hard. When I was starting out, the mountain seemed high.

With that said, no one earning what I am earning is poor\
Anonymous
Post 07/06/2016 13:37     Subject: Re:s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Ok, I get it now! That poster from a few posts up explained to me that everyone must live in a single family home within 15 miles of DC with great schools ratings from 7 and up. So by creating these very specific requirements, she was able to PROVE that anyone making less than $300k is simply unable to get by.

Not everyone in the area who is happy and successful lives in a single family home within 15 miles of DC with a great schools rating of 7 and up.

(Writing from a paid-off $500k house 10 miles from DC with schools rated 7/7/5)


How did you afford private high school?


We are sending our child to our local high school rated 5, not private.


I can just imagine the earlier poster's reaction. A GS 5 - you mean, a middle ranked school??

Anonymous
Post 07/06/2016 13:32     Subject: Re:s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:Ok, I get it now! That poster from a few posts up explained to me that everyone must live in a single family home within 15 miles of DC with great schools ratings from 7 and up. So by creating these very specific requirements, she was able to PROVE that anyone making less than $300k is simply unable to get by.

Not everyone in the area who is happy and successful lives in a single family home within 15 miles of DC with a great schools rating of 7 and up.

(Writing from a paid-off $500k house 10 miles from DC with schools rated 7/7/5)


How did you afford private high school?


We are sending our child to our local high school rated 5, not private.
Anonymous
Post 07/06/2016 12:48     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:PP here who bought house in 99. When I started out, 20+ years ago, I noticed that my senior colleagues were much much better off than me. They made more than me, sure, but the big difference was that they were paying the same in mortgage payments as I was for my one bedroom appt.

I realized that buying a house is insurance against rent increases. So, I bought what I could afford -- on my income. Money was tight for the first few years. But in time, my income increased -- from 60K when I bought the house (1999) to 170K now. Some of that was inflation, but most was career growth. Now, my mortgage was at 8%, not 3.7%. So, with the same monthly mortgage payment as a fraction of income, I would be able to borrow 480K with an inflation adjusted salary to 85K. (same Loan to debt ratio).

That means a 600K house, which is basically what I live in.

More to the point, when we hire someone out of grad school, after a few years (same place in life), they are making about 100K. At 100K, with current interest rates, they could buy my house today.

In 20 years, assuming modest inflation, they will be comfortable/


You won the housing lottery and totally ignoring the difference between a $40k down payment vs $120k down payment.
Anonymous
Post 07/06/2016 12:46     Subject: Re:s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:Because these people are spending 75 percent of their 300k plus salary on childcare, taxes and housing.


I think this says it all.


Yep, though I would add student loans to that list. That is why people feel poor on high incomes. Because paying your 2K student loan payment every month (which is the payment for a PUBLIC law school or medical school), and paying your 3K mortgage (for a house that was considered middle or even working class in the 80s and 90s, but is now very expensive), and paying 3K a month (at least) for daycare or a nanny for 2 kids, while very costly, does not feel luxurious, yet that (plus 28% or so in taxes) is where the majority of your money goes. Add that to the fact that some of these high income jobs come with brutal hours, and no, these people do not FEEL rich. I used to be one of those people, and got so sick of it we moved to a lower cost of living area, where we make much less money, but now have a very nice house, and much lower childcare costs. So I can say while I was objectively "richer" before based on income alone, we are much much wealthier now in terms of lifestyle. So I totally het how people who make much more money than me don't "feel" rich.
Anonymous
Post 07/06/2016 12:14     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
PP here who bought house in 99. When I started out, 20+ years ago, I noticed that my senior colleagues were much much better off than me. They made more than me, sure, but the big difference was that they were paying the same in mortgage payments as I was for my one bedroom appt.

I realized that buying a house is insurance against rent increases. So, I bought what I could afford -- on my income. Money was tight for the first few years. But in time, my income increased -- from 60K when I bought the house (1999) to 170K now. Some of that was inflation, but most was career growth. Now, my mortgage was at 8%, not 3.7%. So, with the same monthly mortgage payment as a fraction of income, I would be able to borrow 480K with an inflation adjusted salary to 85K. (same Loan to debt ratio).

That means a 600K house, which is basically what I live in.

More to the point, when we hire someone out of grad school, after a few years (same place in life), they are making about 100K. At 100K, with current interest rates, they could buy my house today.

In 20 years, assuming modest inflation, they will be comfortable/
Anonymous
Post 07/06/2016 11:40     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:Ok. I read these posts and cringe. my HHI income is 1/2 of that. We are quite comfortable. Small house in a good suburb, 1800 sq ft on 0.25 acres, GS ranking 9/9/8. Kid in public.

Now, DW is SAH, so we have never had childcare expenses.

I have managed to save some cash: net worth is about 1.1 mil. (no inheritance).

It is all expectations. We do not consider the big international vacations. Private schools? Eh, in Vienna, I don't need them.

Cars, well my 6 yo subie runs fine.

Now, granted I have lived here since '99, but HHI was 80K then, and we were doing fine.


So how much did you pay for the house in '99 and how much appreciation did you see? A quarter acre within 20 miles of DC will be at least $600k for the land, and you make $150k? I suspect you won the housing lottery?


Looking on Redfin 1800 sq ft houses (didnt look at the lot size) are btw 600-700k/yr. Assuming it was 1/2 of that in 1999... So your mortgage is likely pretty low.
Anonymous
Post 07/06/2016 11:26     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Ok. I read these posts and cringe. my HHI income is 1/2 of that. We are quite comfortable. Small house in a good suburb, 1800 sq ft on 0.25 acres, GS ranking 9/9/8. Kid in public.

Now, DW is SAH, so we have never had childcare expenses.

I have managed to save some cash: net worth is about 1.1 mil. (no inheritance).

It is all expectations. We do not consider the big international vacations. Private schools? Eh, in Vienna, I don't need them.

Cars, well my 6 yo subie runs fine.

Now, granted I have lived here since '99, but HHI was 80K then, and we were doing fine.


So how much did you pay for the house in '99 and how much appreciation did you see? A quarter acre within 20 miles of DC will be at least $600k for the land, and you make $150k? I suspect you won the housing lottery?


The pp said he graduated college in 99, very few people I know purchased houses at 21/22. For all you know he may have purchased in the '05 run up in housing prices.


My mistake, he did not say he graduated college in 99. Anyway I graduated in 2002 making 30K, and still make far less than the 300K whiners and would never consider myself poor. Get some perspective people.


Graduated college in 87, finished PhD in 1994. Bought a house in 99. I did get lucky with the equity. But, adjusting for inflation, I could still afford my house with what DW and I were earning in '99.

As for 1/4 acre lots...teardowns in my neighborhood are selling for about 525K.
Anonymous
Post 07/06/2016 11:26     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Ok. I read these posts and cringe. my HHI income is 1/2 of that. We are quite comfortable. Small house in a good suburb, 1800 sq ft on 0.25 acres, GS ranking 9/9/8. Kid in public.

Now, DW is SAH, so we have never had childcare expenses.

I have managed to save some cash: net worth is about 1.1 mil. (no inheritance).

It is all expectations. We do not consider the big international vacations. Private schools? Eh, in Vienna, I don't need them.

Cars, well my 6 yo subie runs fine.

Now, granted I have lived here since '99, but HHI was 80K then, and we were doing fine.


So how much did you pay for the house in '99 and how much appreciation did you see? A quarter acre within 20 miles of DC will be at least $600k for the land, and you make $150k? I suspect you won the housing lottery?


The pp said he graduated college in 99, very few people I know purchased houses at 21/22. For all you know he may have purchased in the '05 run up in housing prices.


My mistake, he did not say he graduated college in 99. Anyway I graduated in 2002 making 30K, and still make far less than the 300K whiners and would never consider myself poor. Get some perspective people.


Some people bought early on and they was why queried. But really if the key point of if you can ever reach a comfortable middle class lifestyle depends on if you bought 5 vs 10 years ago, that is a distorted arrangement. It used to be a family could buy a modest home and move up but now even that modest home is out of reach.

As for immediate PP, where is you and your wife's jobs? If you work in a office in Ashburn it's fine to get a nice house with good schools and short commute. The people who feel strapped have jobs downtown with two working parents.
Anonymous
Post 07/06/2016 10:00     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Ok. I read these posts and cringe. my HHI income is 1/2 of that. We are quite comfortable. Small house in a good suburb, 1800 sq ft on 0.25 acres, GS ranking 9/9/8. Kid in public.

Now, DW is SAH, so we have never had childcare expenses.

I have managed to save some cash: net worth is about 1.1 mil. (no inheritance).

It is all expectations. We do not consider the big international vacations. Private schools? Eh, in Vienna, I don't need them.

Cars, well my 6 yo subie runs fine.

Now, granted I have lived here since '99, but HHI was 80K then, and we were doing fine.


So how much did you pay for the house in '99 and how much appreciation did you see? A quarter acre within 20 miles of DC will be at least $600k for the land, and you make $150k? I suspect you won the housing lottery?


The pp said he graduated college in 99, very few people I know purchased houses at 21/22. For all you know he may have purchased in the '05 run up in housing prices.


My mistake, he did not say he graduated college in 99. Anyway I graduated in 2002 making 30K, and still make far less than the 300K whiners and would never consider myself poor. Get some perspective people.
Anonymous
Post 07/06/2016 09:58     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:Ok. I read these posts and cringe. my HHI income is 1/2 of that. We are quite comfortable. Small house in a good suburb, 1800 sq ft on 0.25 acres, GS ranking 9/9/8. Kid in public.

Now, DW is SAH, so we have never had childcare expenses.

I have managed to save some cash: net worth is about 1.1 mil. (no inheritance).

It is all expectations. We do not consider the big international vacations. Private schools? Eh, in Vienna, I don't need them.

Cars, well my 6 yo subie runs fine.

Now, granted I have lived here since '99, but HHI was 80K then, and we were doing fine.


So how much did you pay for the house in '99 and how much appreciation did you see? A quarter acre within 20 miles of DC will be at least $600k for the land, and you make $150k? I suspect you won the housing lottery?


The pp said he graduated college in 99, very few people I know purchased houses at 21/22. For all you know he may have purchased in the '05 run up in housing prices.
Anonymous
Post 07/06/2016 09:48     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:Ok. I read these posts and cringe. my HHI income is 1/2 of that. We are quite comfortable. Small house in a good suburb, 1800 sq ft on 0.25 acres, GS ranking 9/9/8. Kid in public.

Now, DW is SAH, so we have never had childcare expenses.

I have managed to save some cash: net worth is about 1.1 mil. (no inheritance).

It is all expectations. We do not consider the big international vacations. Private schools? Eh, in Vienna, I don't need them.

Cars, well my 6 yo subie runs fine.

Now, granted I have lived here since '99, but HHI was 80K then, and we were doing fine.


So how much did you pay for the house in '99 and how much appreciation did you see? A quarter acre within 20 miles of DC will be at least $600k for the land, and you make $150k? I suspect you won the housing lottery?
Anonymous
Post 07/06/2016 09:45     Subject: Re:s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:What do they want? I think that is pretty clear: they want it ALL. The 1.25-2 mil house. The 85k car (x2 and maybe a fun convertible for a third that they only take out on weekends). They want a second home at the beach. They want to be able to spend 50k on travel every year. They want to be able to drop 200-300 at dinner once a week (plus babysitter). They want the 110k CC membership plus ongoing dues and related fees. They want to pay for private school for 2-3 children. They want to save at least $1k a month per kid for college. In addition, they'll want $100k extra for general savings. I can keep good by here. This is where all their money goes.


Pretty much describes being rich. The two big expenses are the large, close in home and private school.
Anonymous
Post 07/06/2016 09:43     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Imagine spending $20k-$40k PER YEAR vacationing and then saying you're strapped for $. Wouldn't it be lovely?
Anonymous
Post 07/06/2016 09:41     Subject: s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?
Imagine spending $20k-$40k PER YEAR vacationing and then saying you're strapped for $. Wouldn't it be lovely?