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Normal is getting dressed in clothes that you buy for work and driving through traffic in a car that you are still paying for - in order to get to the job you need to pay for the clothes and the car, and the house you leave vacant all day so you can afford to live in it.--Ellen Goodman
Honestly, you need to learn to stop caring about what other people think. Maybe it's just the people I hang with are different, but I just don't experience what you're saying. I tend to think that if you are confident and happy with your own life choices, people sense that and will leave you alone (at least part of the time, maybe not always). Otherwise, tell those people to mind their own business.
Come to think about it, I have a friend who used to sort of tell me how crazy I was to rent, and I guess I never felt it as pressure. All of the advantages to owning a home that he cited were just not important to me. So I'd say to him "I really don't care about that". Which was true. I really didn't. I never experienced it as "pressure". He never says anything about it any more.
I got the constant "buy something" from my father during my early working years. 6 years into my career, I yielded to the pressure. This was 1988. The S&L meltdown and housing market crash happened about 18 months later. I'd purchased a not-very-nice condo at the peak of the market and got slaughtered. I sold it a few years later at 60 cents on the dollar. I accelerated payments to knock the balance down to where I could actually sell it. I had to borrow against my paid-for car at the closing to settle up. I learned a valuable lesson from that. Never buy something you wouldn't be happy to own and live in for the rest of your life. That's my real estate rule #1.
Honestly, you need to learn to stop caring about what other people think. Maybe it's just the people I hang with are different, but I just don't experience what you're saying. I tend to think that if you are confident and happy with your own life choices, people sense that and will leave you alone (at least part of the time, maybe not always). Otherwise, tell those people to mind their own business.
Come to think about it, I have a friend who used to sort of tell me how crazy I was to rent, and I guess I never felt it as pressure. All of the advantages to owning a home that he cited were just not important to me. So I'd say to him "I really don't care about that". Which was true. I really didn't. I never experienced it as "pressure". He never says anything about it any more.
It is often a good sign when you are not doing what "everyone" is telling you to do.
I rented into my 30's without giving it a second thought. The advantage in home ownership comes toward the end. Now, at 63, my home is paid for and I can live here for the rest of my life for just the property taxes. Were I to rent a similar place, I'd be out about $ 3,000/month. But I think that at the OP's age, renting is just fine.
12% of my gross income is saved each month (as liquid cash) and 16% of my gross income is contributed to my 401k, so 28% of my gross income is saved or invested. Currently, at the age of 32, I have about $23,000 saved in my 401k. My employer does not provide any 401k matching at all.
I currently have about $56,000 in liquid cash and no debt and earn $70K a year.
12% of my gross income is saved each month (as liquid cash) and 16% of my gross income is contributed to my 401k, so 28% of my gross income is saved or invested. Currently, at the age of 32, I have about $23,000 saved in my 401k. My employer does not provide any 401k matching at all.
I currently have about $56,000 in liquid cash and no debt and earn $70K a year.
Remember, I am single and have no dependents.
Id opt for an Ira or Roth IRA before a nonmatching 401k plan.
Id opt for an Ira or Roth IRA before a nonmatching 401k plan.
That's a stupid suggestion. A 401k is basically the same thing as an IRA. And an IRA would require me to contribute after-tax money into it, because contributions cannot come directly from my paycheck as a pretax deduction like 401k contributions can. Also, I used to have a Roth IRA and hated it. Roth IRA's have less potential for higher long term growth, because the basis of contributions are lower than they could be, because they've been taxed. I am vehemently opposed to any form of after-tax retirement contributions.
I too lived in the Bay Area and was approaching 40 when I purchased my townhouse there. The prices were insane even back then. I waited and saved until I could put down over 20% and have a 1 yr cushion for paying expenses. Good thing as I needed that cushion after the tech market went bust in 2001.
Renting is valid and buying is valid. It all depends on your needs and wants and what your finances are as well as other factors. It's a big decision and it isn't right for everyone. If you're happy that's the only thing that matters and that's when you know it's the right thing.
That's a stupid suggestion. A 401k is basically the same thing as an IRA. And an IRA would require me to contribute after-tax money into it, because contributions cannot come directly from my paycheck as a pretax deduction like 401k contributions can. Also, I used to have a Roth IRA and hated it. Roth IRA's have less potential for higher long term growth, because the basis of contributions are lower than they could be, because they've been taxed. I am vehemently opposed to any form of after-tax retirement contributions.
You certainly are not the first person to call good suggestions stupid only because you don't understand the advantages and I don't imagine you will be the last.
The advantages of an traditional IRA over a non-matched 401k are reduced fees and a larger selection of investment options. The advantage of the 401k is (probably) a larger contribution limit. They each use tax deferred contributions. The IRA is a tax deduction on your tax form but the net result is the same.
The advantage of the Roth IRA over a (non Roth) 401k has to do when you wish to pay taxes and can be an ENORMOUS advantage, especially if you are young. But, depending on circumstances, it can be an advantage to take the deduction now
Last edited by jw2; 06-02-2016 at 06:47 PM..
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