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Acquiring real estate was one of the first goals I had. I even took on PMI to do it. But, I’ve made 50k of equity in the process(and stopped the ridiculous rent price increases) . People will tell you to pay off student loans or build x emergency fund...but had I done both of those things first, I’d be 50k poorer. My home purchase has got me 2x my student loan value out of college as equity.
Buying a house early in your career can really hamstring you and your equity can may very well be timing/luck. I’m not entirely against it but it’s not a magic money maker
Part of the problem is that the media has inflated people's expectations of just how much an "average" family should be able to buy. It makes people feel poor even when they are not.
There is some truth to that.
I recall a line from the movie Silence of the Lambs. Hannibal Lecter (Anthony Hopkins) says to Clarice (Jody Foster) "His fundamental nature is to covet. And what does he covet? He covets that which he sees. He covets that which he sees every day."
Buying a house early in your career can really hamstring you and your equity can may very well be timing/luck. I’m not entirely against it but it’s not a magic money maker
I agree with this as well, we moved around a bunch (not even locally, I mean cross country moves) to further our careers. I have a friend who didn't job hop and makes 100k less than I do.
I mean it’s true. I never heard the term Henry, but my wife and I would qualify as that. We make 150k, but we’re not rich. We don’t go on big vacations. Once you hit 401k matches, pay student loans, and pay bills (cough taxes, insurance), there’s not money to be frivolous with.
I know every statistic would say we're top 10 percent in income for our age, but it doesn’t feel rich at all. We will be, but not today.
But it’s nice to be able to click on this person’s story to give them revenue to fund their woes.
Yeah I feel you.
When I was a kid growing up I always thought when I hit $100K a year that I would have 'made it' and be rolling in money. Well the wife and I bring in just over $200K a year now, and it doesnt feel like it at all. We pump a ton into 401K, building our emergency fund (at 3 months, working towards 6) and paying down debt (cars and credit cards FINALLY paid off, working on student loans and the house next).
We are not struggling, and we are doing just fine, but it definitely isnt the 'pop champagne every night' vision I had as a youngster.
Holding 6 months of low paying liquid savings in your 20s or 30s seems like a tremendous cost. That’s money you haven’t tax deferred, aren’t investing, or using to build home equity. It’s just too inefficient. It’s downright damaging for someone if that was their largest asset.
Even now, I would never want to hold that much like that with no end in sight. Let’s say 6 month of true cash outlay expenses is 30k. Do I really want that kind of money rotting? And even living way under your means, say spending 10 months of your 12 months of income would take 3 years just to get to that point.
Over conservatism can create the bad outcome you’re trying to avoid. I’d rather aggressively grow my way to prosperity to have the 6 months expenses than turtle to get it at the risk of the future.
The only emergency fund I’ve built, is from all credit card rewards I get are saved and rolled into a special Xmas account. I’ve made around 8k from this.
I don’t see what’s wrong with relying on credit cards to aid cash flow, if they’re interest free intro apr. Credit is a tool.
When the water heater goes out, the car needs a $1,500 repair and you got a $2,000 bill from a trip to the ER ALL IN THE SAME MONTH...you will be glad you had that $30K 'sitting there rotting'...but as they say, life is the best teacher...you will learn. But in the meantime carry on.
Sounds like a combination of "champagne taste, beer budget" and "big hat, no cattle".
But since I'm over 50, nothing I could say could have any relevance to this discussion.
You honestly don't think it has to do with the investment in multiple real estate properties? It seems like you're projecting your situation rather than the situation of the millennial in the article.
This is a good question. Most people I know that are young and make that kind of money are saving (for retirement and for rainy days). We have to keep in mind that "Jenny" feels strapped for cash but isn't poor. The opening paragraph reads:
"Jenny Castillo makes over six figures, owns multiple homes in DC and vacationed in three countries already this year. But at the end of each month, she’s still counting pennies."
Owning multiple homes in DC, and vacationing around the world, hardly seems like a real struggle.
Sounds kind of out of touch to me too. Who the hell writes these articles about what it looks like to live financially strapped? Do they even really know what it's like?
Someone who owns multiple homes in a high COL city like DC, has the means to vacation around the world, and makes over 6 figures a year isn't exactly struggling financially IMO.
Rent out one or more of the houses and collect the income. Cut back on some of the international travel. Geez. Such horrible sacrifices, right?
Struggling is figuring out how you are going to make it another 6 days until payday with $20 in your pocket, nothing in your bank account, and a few cans of food in the pantry.
I've been broke early in my career and have worked with charities that help people who are truly struggling. Sorry but this article is just insulting and classist.
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