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My wife and I (33 and 30) are on the fence about having kids; one of my concerns is that kids will eat up all of our income and we'll never be able to retire. As it is now, we are able to save 29% of our income but that's running things pretty tight. I will never make much more money than I do now (51K with about 3% raises every year capping out around $80K) although I have about as stable employment as anyone can get. She may increase her income (about 25K now, she can make at least 40K in my opinion - she is working way below her potential).
We're running out of time to have kids, but everyone we know our age spends a fortune on their kids, don't know if we can do it and still save money.
This is one of those questions that runs into that "is $1MM or some other high figure of savings & net worth late in life worth sacrificing lifestyle" type decisions.
Depends on how bad you want them. Kids don't have to cost as much as people think, but they definitely are expensive, because you either have to pay for day care or one parent has to drastically cut back or give up on work to stay home with them. Both options are expensive.
My wife and I (33 and 30) are on the fence about having kids; one of my concerns is that kids will eat up all of our income and we'll never be able to retire. As it is now, we are able to save 29% of our income but that's running things pretty tight. I will never make much more money than I do now (51K with about 3% raises every year capping out around $80K) although I have about as stable employment as anyone can get. She may increase her income (about 25K now, she can make at least 40K in my opinion - she is working way below her potential).
We're running out of time to have kids, but everyone we know our age spends a fortune on their kids, don't know if we can do it and still save money.
This is one of those questions that runs into that "is $1MM or some other high figure of savings & net worth late in life worth sacrificing lifestyle" type decisions.
Kids aren't just about the money. What type of future do you want? Would you be satisfied with another 50-60 years with just you and your wife? Or do you want a life sharing your love, resources and time with your children and grandchildren?
My mother did it as a school teacher. When she moved to CA in early 70s she bought a townhouse lived in it and then kept it when she bought a duplex rented 1 unit lived in the other, bought a SFR, etc etc.
Her steady teaching salary and excellent credit allowed her get loans to continue purchasing properties and leverage her into controlling millions of $ in real estate.
Lots of that is due to luck. If she had done the same thing in her home town in Iowa she'd be a pauper in comparison. However, she lived on a shoestring budget with room mates to help her pay her mortgage, etc.
Even today she lives in a multi million dollar house but rents out her pool house and second story because she likes the income.
That is really cool . I like to hear those kinds of stories . It's amazing how much wealth has been created for people that have purchased real estate in CA and help it long term .
True some was luck but she also had a plan and took action too . Many people don't want to own multiple properties or have tenants as they view it as risky .
Over time properties in L.A have gone up so much and of course rents have gone way up to while her mortgages would of stayed the same, and are likely mostly paid off .
At the current prices in LA , I don't feel there is the same opportunity for growth in the future .. But I could be wrong .
Surely there will be parts of the country though that will get more popular or developed over time and land and property will become more desirable .
That is really cool . I like to hear those kinds of stories . It's amazing how much wealth has been created for people that have purchased real estate in CA and help it long term .
True some was luck but she also had a plan and took action too . Many people don't want to own multiple properties or have tenants as they view it as risky .
Over time properties in L.A have gone up so much and of course rents have gone way up to while her mortgages would of stayed the same, and are likely mostly paid off .
At the current prices in LA , I don't feel there is the same opportunity for growth in the future .. But I could be wrong .
Surely there will be parts of the country though that will get more popular or developed over time and land and property will become more desirable .
It is extremely unlikely that today's growth will be able to replicate what happened in the past. However, if it goes up 3-4% annually that's nothing to sneeze at.
LA real estate prices will not go back to what they were like in the 90's unless there is some sort of catastrophic natural disaster.
It is extremely unlikely that today's growth will be able to replicate what happened in the past. However, if it goes up 3-4% annually that's nothing to sneeze at.
LA real estate prices will not go back to what they were like in the 90's unless there is some sort of catastrophic natural disaster.
Yeah true. Also since most people buy property leveraged/with a loan 3-4% leveraged is quite a bit more than just 3-4%
Prices would have to go down pretty drastically to go back to 90's levels.
At these levels it's tough to find any value plays really.
Even the ungentrified areas where it's mostly a working class immigrant population the houses are $400,000+
Amazing to think of $400,000 being the 'lower end'
I wouldn't call a California equity refugee, or anyone that got a nice profit off of their primary home, a "self made" millionaire.
They were lucky, same as if they got an inheritance or something. If it was just the good luck of the real estate market inflating around them, they were beneficiaries of phenomena outside their control. That is not "self-made" anything.
My own house in Oregon has increased in value by about 55% in less than 2 years. That has nothing to do with me, I was just lucky; I had no idea it would increase in value so quickly... all I wanted was a roof over my head.
I wouldn't call a California equity refugee, or anyone that got a nice profit off of their primary home, a "self made" millionaire.
They were lucky, same as if they got an inheritance or something. If it was just the good luck of the real estate market inflating around them, they were beneficiaries of phenomena outside their control. That is not "self-made" anything.
My own house in Oregon has increased in value by about 55% in less than 2 years. That has nothing to do with me, I was just lucky; I had no idea it would increase in value so quickly... all I wanted was a roof over my head.
I wouldn't call a California equity refugee, or anyone that got a nice profit off of their primary home, a "self made" millionaire.
They were lucky, same as if they got an inheritance or something. If it was just the good luck of the real estate market inflating around them, they were beneficiaries of phenomena outside their control. That is not "self-made" anything.
My own house in Oregon has increased in value by about 55% in less than 2 years. That has nothing to do with me, I was just lucky; I had no idea it would increase in value so quickly... all I wanted was a roof over my head.
If you are referring to my post, that's not at all what I was talking about.
All those houses/townhomes/etc are an incorporated LLC with annual gross rents in excess of 200k. Selling all those assets would be well north of 1 M.
To where? Some cheap dump in Indiana? Then you live in Indiana.
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