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No. I'm living in the only place I've ever known by living with my family. I don't even think they'd let me leave.
Even if I wanted to be a Dallas, Merced, or Eureka slum lord I couldn't.
Sounds like you need to get out and see the world. Wth your limited exposure to life in other areas, maybe you don't fully understand this whole COL thing, you know? And how it relates to the topic of this thread?
Besides, the Bay Area is one of those extreme cases in which many people who want to purchase a home do extend themselves beyond the standard "30% of gross monthly income" (caveat: many, not all!) NYC, LA and others would fall under this exception.
No. I'm living in the only place I've ever known by living with my family. I don't even think they'd let me leave.
Even if I wanted to be a Dallas, Merced, or Eureka slum lord I couldn't.
Are you an adult? Adults make their own decisions. If you're not an adult yet, please disregard.
It's fine if you want to stay in the bay area. I agree with you that it is a great place to live. But own your decisions; they are yours.
I was reading a article that stated that most financial experts and banks feel that your rent or mortgage should be 30% of your monthly gross income which makes no sense. Shouldn't it be 30% of what you bring home after taxes instead of before taxes since the money you are living off of is the Net income?
It evens out. In any case, it's more of a maximum amount that you don't want to exceed. Lower is better.
Quote:
Originally Posted by te3t
I just checked and my rent is 36% of my monthly gross income and 47% of my net income.
I actually didn't realize that when people said rent/mortgage should be no more than 30%, they were talking about GROSS. Somehow I always assumed net, and wondered how people made that work long term esp. if they are in a higher COL east coast city. Makes sense that you'd look at gross though because if their net is smaller because they are funding a 401k, have a pension contribution etc. -- those things are savings right off the top.
That's why I don't have 401K yet because I feel like I need a bigger increase to balance everything out. I plan to get 401K in about a year or two once I am out of debt and have a bigger salary.
The only way I survive is living at home while aggressively saving to grow a brokerage fund. It's pretty miserable especially when I look back and realize that a 1950s family consisting of an electrician, or even a low wage husband/wife could have had their own 1958 mid century modern ranch house with 3 bedrooms 2 bathrooms with a green lawn, nice neighbors, kids, 2 cars in their driveway, and the chance to buy a rental property. I will never get the opportunity to live that life. I'll be stuck living at home. The only chance I'd have at living that fantasy is buying a home in the central valley, renting it out, and experiencing it through my tenants. Even dangerous places like Hayward or East Palo Alto aren't attainable.
I sympathize with Bay Area rents and home prices. But you need to take off your rose colored glasses about the standard of living in the 1950s. It wasn't nearly as good as you're making it out to be. People were content with less in those days.
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That's well into the financial danger zone.
