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Old 08-06-2008, 07:34 PM
 
2,639 posts, read 5,071,339 times
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Quote:
Originally Posted by Humanoid View Post
The sales-tax hike will only add about $50/year to the case in question. Not a big deal. Just give it up, the earlier estimate of $40k after tax was accurate your claim of $32k was way too low.
Stay with me here. I'm going to help you out.

You said at most $5000k in taxes. Let's go with that figure.

Now, let's say a family buys a Prius. Calculate the tax on that.

When you combine those and subtract from $40k, what do you end up with?
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Old 08-06-2008, 10:31 PM
 
Location: Los Angeles Area
3,306 posts, read 3,336,563 times
Reputation: 592
Quote:
Stay with me here. I'm going to help you out.
Dude, are you serious? You make numerous inaccurate claims about taxes and now you are talking about buying a Prius as if 1.) This is a normal car purchase, 2.) People buy cars every year. You don't take the year you just purchased something like a car and use that to determine how much sales tax you pay in general...that is silly. You need to amortize the tax cost over the life of the car. Anyhow, just get out a calculator and the tax code and you'll see that $40k given or take a bit is an accurate estimate. End of story.
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Old 08-06-2008, 10:41 PM
 
2,639 posts, read 5,071,339 times
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Quote:
Originally Posted by Humanoid View Post
Dude, are you serious? You make numerous inaccurate claims about taxes and now you are talking about buying a Prius as if 1.) This is a normal car purchase, 2.) People buy cars every year. You don't take the year you just purchased something like a car and use that to determine how much sales tax you pay in general...that is silly. You need to amortize the tax cost over the life of the car. Anyhow, just get out a calculator and the tax code and you'll see that $40k given or take a bit is an accurate estimate. End of story.
No, you don't amortize it over the life of the car, unless you have platinum credit, you're paying that out of the down payment. In other words, money out of your pocket.

All I'm saying to you is, unforeseen expenses come up. Things happen. And for those things you have to buy, you will pay sales tax on them. Your "hundreds of dollars" estimate doesn't fly if there's a car purchase.

In California, $40grand is minimum needed to live, but you will need DPA. Savings are not easy on that amount of money, period. $70grand and up, yes...you can probably put away $10grand a year. Assuming you need $100grand to buy the house you want, that's 10 years, assuming you have the same job at the same income and haven't been laid off, and assuming that prices haven't increased on the day-to-day expenses.

The point I'm making to you is simple. Your quick calculations don't fly, because there are too many variables. Prices go up. Taxes go up. Unforeseen expenses come up. Deaths in the family. Something will always come up, and that negates the ability to really save any quantifiable amount of money at that level of income, at least in California.
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Old 08-06-2008, 11:03 PM
 
Location: Los Angeles Area
3,306 posts, read 3,336,563 times
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Quote:
In California, $40grand is minimum needed to live, but you will need DPA
This is not true. A couple (or an individual) can live off less than $40/year in California, a couple could easily do around $35k and and individual around $30k. This doesn't involve living in the "ghetto" either, if you are willing to live in so-so areas then it would be even cheaper. In either case after a few years one could have money saved up for a modest down payment.

Quote:
Your quick calculations don't fly
They fly just fine, simply look at the tax code and get out a calculator. "Unforeseen expenses" have nothing to do with your tax burden...I don't know why you keep mentioning it toward me when I'm merely talking about one's tax burden.
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Old 08-06-2008, 11:32 PM
 
Location: Norcross GA
983 posts, read 4,033,490 times
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Quote:
Originally Posted by Humanoid View Post

There is little point in trying to make sense out of how people afforded prices during the peak of the boom, because the reality is that they didn't. Many people took out exotic loans that reduced the monthly payment the first few years by allowing them to pay only the interest (IO ARMS) or even only paying just part of the interest and letting the difference add to the loan (Pay option ARMS). But there are many areas of the country where houses stated reasonably priced, the bubble areas (CA, FL, NV etc) really pushed the national median up.

EXACTLY!!! Was going to make the same point.
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Old 08-07-2008, 06:26 AM
 
25,367 posts, read 37,636,914 times
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Isn't it totally different the average income and an average house price....Isn't it comparing apples with pears? Only the word avearge is the same, also it all depends where you home is located and if it is in a cheaper area than probable the incomes are lower, so it comes down to the same.
Right now it is a good time if a person with an average income and a very credit score can buy a low priced house
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Old 08-07-2008, 07:26 AM
 
122 posts, read 302,762 times
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Quote:
Originally Posted by bentlebee View Post
Isn't it totally different the average income and an average house price....Isn't it comparing apples with pears?
Yes.
First, that is the median household income. Not average.
Second, that median number includes renters. Renters make up 1/3 of all households.

Find the average income of homeowners and compare.
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Old 08-08-2008, 11:48 AM
 
1,851 posts, read 2,916,639 times
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Post You missed my point...sort of.

Quote:
Originally Posted by ocnymonty View Post
I'm not crying poor... I'm crying awknowledgement... my PITI is $2550. That's $1850 for principle and interest... and $700 for everything else. We own both cars outright and have low credit card debt. Yes some student loans are still being paid off but in the end I factored we could save $1500-$2000 per month before we even made our offer. That's when gas was $3.30 a gallon and heating fuel was right behind it. So now we're saving $500-600 per month with additional costs. What happens if I lose my job... or my wife. In the short term we'll survive, however our mortgage is dependent on two salaries.

Yes, wages went up some... but not nearly keeping pace with the rising cost of living.
Your math doesn't add up with what you say you and your wife earn. One salary should be enough to cover your mortgage of $2550/month. If you take the highest salary of the two of you, that is $1275 per paycheck. The other salary would cover incidentals and utilities.

As I stated before, young, high-earning couples, use BOTH incomes to sustain a lifestyle that is out of their reach, realistically.

I'm not blaming you for anything, nor am I saying you're doing anything wrong...but I am pointing out that with what you say you earn, and the cost of your house...something doesn't add up. Yes, taxes vary from state to state, but in each state, they vary from county to city, etc.

When you buy a home with a mortgage dependent on BOTH salaries (which is not necessary, sorry, it just isn't) then you set yourself up for the what-ifs you've mentioned above...you did that, not anyone else.

For this very reason, my husband and I will not even apply for a loan until I am working, to show we can handle the incidentals, etc., BUT we will not buy the home based on TWO incomes, we will spend an amount with a mortgage that each income, separately, can pay. If one of us looses our job, then accepting a lower salary to "make ends meet" won't be too hard and we won't have to worry about paying the mortgage.

If people did this then the mortgage mess we're in now wouldn't be as bad...a wise person once told me, even when your household brings in two incomes, it's best to live on one, and save as much of the other as possible. This is truly "living below your means."

Sorry.
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Old 08-11-2008, 09:35 AM
 
Location: Texas
42,336 posts, read 50,002,628 times
Reputation: 67253
Right...if you live below your means, things like increase in energy costs or sudden tax hikes will not create catastrophic consequences. I mean, does anyone actually think things are getting cheaper?

You _know_ the cost of living only gets higher, so plan for it.

I know it's commonly said that 33 - 37% of your gross income is about right for your house expenses, but I think that's insane. If you live in NY or CA, where you may not have a choice (b/c rent is so high), that's one thing. O/w, I say if you cross 25%, you've made your own bed.

And when did pets become a "necessity"?
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Old 08-11-2008, 10:06 AM
GLS
 
1,985 posts, read 4,749,518 times
Reputation: 2406
Quote:
Originally Posted by stan4 View Post

And when did pets become a "necessity"?
While this statement has some financial validity, it would be best to tread lightly here. Someone from the Pet forum is going to come over and throw you off the "Rainbow Bridge".
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