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It appears to me that you are just whining about not being able to live an upper class lifestyle on a middle class income, and have run yourself so far into debt that you can't even see daylight. $1000/mo for a car? Really? If your family had a summer home and a boat bigger than a rowboat, your parents were way into the upper class. You may think you are entitled to that lifestyle, but you aren't. Go earn it. Meanwhile, learn to live within your means. If you are making a $1000/mo car payment, you have no idea how to do that.
Now wait a second. Boats and vacation homes come in many varieties. My grandparents, who were working class, lived in a 500 sq. ft. cottage in a blue collar Midwestern town. Additionally, they owned a mobile home on a lake (aka a vacation home) and an old ski boat. That hardly made them upper class.
Very true, rents go up as well. with us paying a mortgage the cost is fixed for a 30 year period. Insurance will also go up with both renters and home owners. sure the cost would be more with a home than with renters insurance of an apartment. Property tax can go up as well. For the first 4 years that we lived in our home the property tax was flat with the 2013 year declining. For 2015 the property tax increased to what is known as our base rate plus 2%. What that means is that the home was valued at $310,000 or the price that we paid for the home. They added 2% to that amount, or an additional $6,200 bringing our tax rate to 1% of $316,200 or $3,162 a year. In addition we pay some school funding bonds that add an addional .25% for a true property tax of $3,952.50 a year. Each year if prices rise the County can add an additional 2% to the value of our home. I have heard that they don't always do that but it can happen. Lets say that they do it again next year. The new assessed value is $316,200 * 2% = $6,324 for a new assessed value of $322,524 with the property tax (and bond payments) bringing our bill to $4,031.55 a year.
I know that I run on and on, but did that answer the question?
My costs were fixed for 15 years, after which they dropped to near zero. I bought what I could afford and paid for it. Now my wife and I live in a 1750 sq. ft. completely remodeled and updated home on 93 acres with a creek in the back yard, deck, patio, gazebo overlooking the creek, barn and shop. Property taxes were $1500 this year. I forget how much insurance is, but not much because we have a $5000 deductible. Almost all homeowner claims are below that, so it only costs us a few hundred dollars a year. Thanks to living within my means, I could write a $5000 check without blinking.
Getting there took a lot of years of deferred gratification; pots of stew and driving beaters. When the mortgage was paid off, we went right on making the payments into our retirement accounts.
Living within your means really is that simple. Buy what you can afford and pay for it. Don't spend money just because you have it.
My costs were fixed for 15 years, after which they dropped to near zero. I bought what I could afford and paid for it. Now my wife and I live in a 1750 sq. ft. completely remodeled and updated home on 93 acres with a creek in the back yard, deck, patio, gazebo overlooking the creek, barn and shop. Property taxes were $1500 this year. I forget how much insurance is, but not much because we have a $5000 deductible. Almost all homeowner claims are below that, so it only costs us a few hundred dollars a year. Thanks to living within my means, I could write a $5000 check without blinking.
Getting there took a lot of years of deferred gratification; pots of stew and driving beaters. When the mortgage was paid off, we went right on making the payments into our retirement accounts.
Living within your means really is that simple. Buy what you can afford and pay for it. Don't spend money just because you have it.
Except that poor renters are not allowed to buy what they can afford, so they rent forever, which means they will pay more and more for housing while having nothing to show for it.
Except that poor renters are not allowed to buy what they can afford, so they rent forever, which means they will pay more and more for housing while having nothing to show for it.
Irrelevant if they couldn't pay a mortgage. If they bought, they would have nothing to show for it as well (unless, of course, the "Foreclosure Sale" sign that will appear in the front yard counts.)
If they could pay a mortgage, they can rent and invest the difference.
It appears to me that you are just whining about not being able to live an upper class lifestyle on a middle class income, and have run yourself so far into debt that you can't even see daylight. $1000/mo for a car? Really? If your family had a summer home and a boat bigger than a rowboat, your parents were way into the upper class. You may think you are entitled to that lifestyle, but you aren't. Go earn it. Meanwhile, learn to live within your means. If you are making a $1000/mo car payment, you have no idea how to do that.
If you want to go bowling, cancel your cable service and spend the money bowling. That would buy a lot of lines. The bars are not packed because people have more money to spend and are filling the upscale venues.
No $1000/month car payment. The poster puts a very large number of miles on the vehicle every year for work and is including all car expenses.
But even if it were a payment, the reasonableness would depend on the length of the loan. There's a big difference between $1000/month for 2-3 years and $1000/month for 8 years!
This is why I think it is important to look not at the payment but at the real capital cost - which is depreciation plus interest/opportunity cost. This allows you to avoid the "payment mentality" which traps people forever in auto debt because they never pay off a car before buying the next one, thinking "I can get a brand new car for just $480/month, less than my current payment of $495", while "intentionally forgetting" the fact that their current loan only has 8 payments left - and the new one will run for 72 months (6 years)!
I realize most of us here on the forums know that that attitude is silly, but when you look only at the payment and not the true capital cost, you're indirectly promoting this way of thinking!
My point was merely that rising rent shouldn't be a concern as long as your income goes up to cover it, just as you were pointing out with HOA dues and property taxes. And of course lets you invest enough to later either buy a house in cash, or have enough in your portfolio to cover rent/mortgage in retirement.
Ok I see what you are saying. True rents will increase as well. When you have a fixed interest rate loan the cost to "rent" your home does not increase at the same amount. Lets look at the apartment comlex that my wife and I used to live at. Originally we were paying $1,000 a month. By the time we left we were paying $1,460 a month. Just a little over 4 years later and they rent those same apartments for over $1,800 a month. When we moved and purchased our home the mortgage, tax, and insurance was just under $1,800 a month. and we have paid that amount untill this month when prices increased because the property tax increased on our home. Now we are paying just over $1,800 a month.
While rents can increase and continue to increase our mortgage will stay the same with the variable being property tax. As I have shown that does not go up by much and may not go up every year. Rent can and has in our area increased every year.
As far as an increase in income, my employer has been paying us a 2% increase each year. If someone stays at the same job year after year you will be making less over time as the cost of living increases faster than 2% around here. I know some employers offer a cost of living increase and an increase in pay. My employer does not offer that.
Ok I see what you are saying. True rents will increase as well. When you have a fixed interest rate loan the cost to "rent" your home does not increase at the same amount. Lets look at the apartment comlex that my wife and I used to live at. Originally we were paying $1,000 a month. By the time we left we were paying $1,460 a month. Just a little over 4 years later and they rent those same apartments for over $1,800 a month. When we moved and purchased our home the mortgage, tax, and insurance was just under $1,800 a month. and we have paid that amount untill this month when prices increased because the property tax increased on our home. Now we are paying just over $1,800 a month.
While rents can increase and continue to increase our mortgage will stay the same with the variable being property tax. As I have shown that does not go up by much and may not go up every year. Rent can and has in our area increased every year.
As far as an increase in income, my employer has been paying us a 2% increase each year. If someone stays at the same job year after year you will be making less over time as the cost of living increases faster than 2% around here. I know some employers offer a cost of living increase and an increase in pay. My employer does not offer that.
Your right, I do diss the source. It's pretty common sense that wages collapsed when you see the lifestyle that you grew up in to be totally unattainable for all but the rich.
Lifestyle not including iPhones and flatscreen, btw.
I am far from rich, yet I have a lifestyle that materially exceeds the lifestyle I grew up with.
All I can afford is 400 sq ft, I've seen only one for sale and that was 30 years ago.
We have older as in built in the 1930's era homes that are small in this area. Not sure if they are 400 square feet or not. Many of these are torn down and larger homes are built on them.
Most builders are not going to want to build a small home. Most people are not going to want to buy a small home. The market just is not there. Around here land cost would be a factor. It would be a waste to build small single family homes. I bet that their may be a market for smaller condo type homes though. The problem is that chances are you will find places like Santa Monica or along the LA and Orange County Coast in California or maybe the Bay area where you would find these smaller places. I know of apartment buildings that have small units like that. The problem for you is that they are not cheap. Most of these small places are luxury themed places and the cost to rent is more than my housepayment. The land they are built on is prime space.
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