This was us a few years ago; we were then at a $450K HHI, $2M NW, and we purchased a $1.4M home in a HCOL area on the west coast. Home is now worth close to $2M (our city became a refuge for tech workers looking to live out of the bay area permanently with remote work) and our HHI has jumped to about $750K, so we are looking to do an addition because we need more space.

Anonymous wrote:

Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

Risk tolerance. You need a much bigger emergency fund and a your savings won’t last as long on a more expensive place in the event of losing your job. My monthly housing costs are 1/10 of my income and I feel very secure.

Good for you! Lol

Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

Risk tolerance. You need a much bigger emergency fund and a your savings won’t last as long on a more expensive place in the event of losing your job. My monthly housing costs are 1/10 of my income and I feel very secure.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

Compared to total net worth? I agree with you. Essentially these folks are all dependent on their continued gainful employment to fund their lifestyles.

Please explain to me how, as a 41 yo with a family but no family money, I could have a lifestyle that would not be dependent on my continued gainful employment?

Dividends.
Rental income.
Other returns on investments.

Anonymous wrote:

Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

Compared to total net worth? I agree with you. Essentially these folks are all dependent on their continued gainful employment to fund their lifestyles.

Please explain to me how, as a 41 yo with a family but no family money, I could have a lifestyle that would not be dependent on my continued gainful employment?

When we bought ours at $1.3m a few years ago, our NW was 2.5m and HHI was $400k

We bought a $1.4m home, 20% down on a $400k HHI a couple of years ago. Our home value has since grown to $1.7m and HHI to $500k. NW is $2m excluding this home equity

We bought a $1.5 mil house a few years ago with a 20% down payment. $600K HHI, close to $10 mil NW. We have two young children now but intend to stay where we are and maybe expand the house eventually.

Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

People are willing to do bidding wars which raises the prices.

Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

No, it's a question of wealth distribution. Consider it your asset portfolio. You don't want to put all your eggs in the same basket. For most people, a house is the most expensive single asset they will ever own, but it doesn't need to represent more than 50% of your total net worth. Now, you can argue that if you buy in a very coveted region, with access to government jobs, wealthy private firms, good public and private schools, your house is a great investment opportunity... sure. Then the conversation switches to making sure your multimillion dollar home that constitutes a large part of your fortune is, indeed, in a highly desirable location. Don't build a large tract of land in the exurbs on which to buy a palace, unless you divine that your great-grandchildren will be able to make a mint because that was THE exurb that is now a desirable suburb

Anonymous wrote:

Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

I mean… we bought a house below our means because if one of us loses our job/is unable to keep working, our life won’t have to change that drastically. We don’t have family money and no one will rescue us in case of a financial crisis. I’m guessing many others are in the same boat.

Us too. It felt too risky to spend that much. We bought 750K on a 350K salary with 350 down. Later we improved that house with 200K cash and now owe 300K with 10 years left. It makes me happy to see that mortgage debt falling.

Anonymous wrote:We just bought 1.5. HHI appx 850k. net worth just passed 1M.

Did you skip a zero in here?

Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

For a high cost of living area it is not unusual for primary real estate to be 30-50% of NW

Anonymous wrote:lol DCUM people are largely financially illiterate. They treat houses as a liability rather than an appreciating asset, and they brag about their financial illiteracy - oh, we make $1M a year but we only bought a 500k house.

I mean… we bought a house below our means because if one of us loses our job/is unable to keep working, our life won’t have to change that drastically. We don’t have family money and no one will rescue us in case of a financial crisis. I’m guessing many others are in the same boat.

Anonymous wrote:

Anonymous wrote:Wow it is amazing how much people have tied up in their houses.

Is it really that amazing though? It's a high COL area. My job and my spouse's job are in DC. To avoid a miserable commute, we bought a close-in suburban house. It's NOT a fancy house, but it did cost $1M.

The average single family home sale in October in Fairfax was $1M (the bottom end of the scale in this question).