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Ouch. My whole mortgage only took five years (house was 2X annual income with 10% down). Compared to the rest of my peers who took out 30 year notes, I have an extra 25 years to put that mortgage money into my pocket instead of the bank.
I'm jealous! lol I'm sure I don't make as much as you, but I can't find any SFH in a safe area that cost under about 5 times my salary unless I'm willing to have a commute of about 1.5 - 2 hours each way
Geez why all the haters? For every 40K earner wagging their finger at the 400K earner there's a 4K earner living with a dozen relatives wagging his finger at the laid off blue collar guy for not living more frugally.
I hear you: "If I ever.....I will.......he should have......."
That is the smart thing to do. The mentality of "Keeping up with the Jones" is a bunch of **** to keep you enslaved !
In my previous company, first of all most of management were former IBM'ers. I was given grief for driving a old beat-up truck instead of being in debt for driving a set of wheels that look good, that is, make the company look good. Also I choose to live in a smaller house versus a McMansion and got grief for that as well. But when I got laid off, I didn't have to worry about car payments or a house mortgage !
The management all they cared about was their power and image. It seems that you could be better controlled if you were heavily leveraged ! I know one thing when I got laid off, if I had car payments and house mortgage, I would have lost my *** on selling the house and I would be living in the rat race on the East Coast like either in the DC area or NYC/NJ instead of being happy here in Colorado !
Quote:
Originally Posted by sterlinggirl
+1
With a $400K salary, I'd have an average house paid off in a year and then start banking cash for retirement and toys.
I've gotten a lot of grief over the years for trying to pay down my mortgage early instead of paying banks 5% so that I can lock up money in a 401K *hoping* for more than a 5% return. Ironically, most of the people who gave me grief about paying down the mortgage are the ones who are crying the 401K blues and laying awake at night wondering how they're going to keep their houses out of foreclosure.
Assuming $500K was after taxes, I would do the following with that money:
Pay cash for nice house in our neighborhood: $275k
Fund 12-month emergency fund: $60k
Fund HSA with three years of max-out-of pocket medical expenses: $30k
Pay off car, student and personal loans: $67k
Divide the rest evenly ($17k each) between furnishing new house, child's education fund, retirement fund and vacation fund.
Sounds very sensible to me!
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unless I'm willing to have a commute of about 1.5 - 2 hours each way
