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I have been saving at least 25% of my after-tax income every year since college ended. Some of my friends and acquaintances spend a lot, judging by my facebook newsfeed. We are talking about:
- International travel
- Fine dining
- Electronic gadgets
- Domestic travel to resorts like Las Vegas or Cancun
I spend very little on these things and hope my discipline will pay off long-term when it comes to home ownership. I am not a doctor or lawyer and never desired to be either one, so my income is not going to be in the top 5%. A typical house in SF is 700K and I really want to stay here. Anybody in my shoes who are well along in years want to comment?
It is not how much you make, it is how much you save. The more you earn, the more you spend on things you really don't need. Don't replace your wants,just replace your needs. Make your savings work for you. Try to achieve 6 or 7 percent on your savings.
It is not how much you make, it is how much you save. The more you earn, the more you spend on things you really don't need. Don't replace your wants,just replace your needs. Make your savings work for you. Try to achieve 6 or 7 percent on your savings.
I saved more than 30% in the East Bay and still around 25% in SF. Housing here is ridiculously pricey even for a modest 3-bedroom and am afraid some of my "friends" will not get to homeownership.
I have been saving at least 25% of my after-tax income every year since college ended. Some of my friends and acquaintances spend a lot, judging by my facebook newsfeed. We are talking about:
- International travel
- Fine dining
- Electronic gadgets
- Domestic travel to resorts like Las Vegas or Cancun
I spend very little on these things and hope my discipline will pay off long-term when it comes to home ownership. I am not a doctor or lawyer and never desired to be either one, so my income is not going to be in the top 5%. A typical house in SF is 700K and I really want to stay here. Anybody in my shoes who are well along in years want to comment?
Sounds like the 'good life' I'd like to live once I get 'rich'. I seriously could care less about housing or a nice car but you only live once and those experiences are what make life worth living in the first place.
I've spent more on a single vacation than the KBB of my car or an entire year's worth of rent (I won't give you any cold hard number yet.) That should give you a clue where my priorities lie.
Fyi, I currently make less than the US median salary and live in a high cost of living area.. and still save about 40% of my after-tax income, thanks to frugality.
Last edited by ragnarkar; 12-17-2012 at 02:38 PM..
I have been saving at least 25% of my after-tax income every year since college ended. Some of my friends and acquaintances spend a lot, judging by my facebook newsfeed. We are talking about:
- International travel
- Fine dining
- Electronic gadgets
- Domestic travel to resorts like Las Vegas or Cancun
I spend very little on these things and hope my discipline will pay off long-term when it comes to home ownership. I am not a doctor or lawyer and never desired to be either one, so my income is not going to be in the top 5%. A typical house in SF is 700K and I really want to stay here. Anybody in my shoes who are well along in years want to comment?
So what are you really trying to say here? Why are you so concerned that your friends should own homes? Home ownership is not the end-all, be-all and not everyone aspires to own a home. Some people value life experiences more.
Do your friends make substantially more than you? My husband's cousin spends money like it is nothing but he is already retired, owns his own home and obviously has substantial retirement income that affords him this lifestyle.
My husband and I make "okay" money. We also live in a high cost of living area (comparable or even more expensive than SF) and even though we save somewhere closer to 50% of our income, we will probably never be able to purchase a house here.
So what are you really trying to say here? Why are you so concerned that your friends should own homes? Home ownership is not the end-all, be-all and not everyone aspires to own a home. Some people value life experiences more.
Do your friends make substantially more than you? My husband's cousin spends money like it is nothing but he is already retired, owns his own home and obviously has substantial retirement income that affords him this lifestyle.
My husband and I make "okay" money. We also live in a high cost of living area (comparable or even more expensive than SF) and even though we save somewhere closer to 50% of our income, we will probably never be able to purchase a house here.
Clarification- we need to save a lot in a high COL area. What good is it to live the life of luxury if you cannot buy a house *and* pay off the mortgage before retirement? My goal is to pay off a mortgage by age 60, even in the Bay Area. Good luck paying rent on your posh apartment when you retire.
The down payment alone is 150,000 to 200,000. That's why I am saying no to international travel.
*My income is above the median. Only friends who are lawyers/doctors make substantially more.
I am not a doctor or lawyer...
A typical house in SF is 700K and I really want to stay here.
Anybody in my shoes who are well along in years want to comment?
You've learned discipline but the next lesson is leverage.
Could you buy an OKish house and be the landlord?
Live in the smallest of the rooms then rent out the others to pay the bills?
Really pay them all including the inevitable repairs?
If so... in a few years you might be able to be in the nicer house.
Be careful.
Clarification- we need to save a lot in a high COL area. What good is it to live the life of luxury if you cannot buy a house *and* pay off the mortgage before retirement? My goal is to pay off a mortgage by age 60, even in the Bay Area. Good luck paying rent on your posh apartment when you retire.
The down payment alone is 150,000 to 200,000. That's why I am saying no to international travel.
*My income is above the median. Only friends who are lawyers/doctors make substantially more.
You need to move my friend. 150k-200k can buy you quite a lavish house in ohio. You may like it in SF...but be prepared to pay more for everything! But if you got the money then who cares. Everybody has different priorities. Your friends like to go on vacation. I hate planes or boats so my vacations are always within 12 hours of driving and we don't go often.
In SF, the rent versus own debate could potentially get complicated by rent control laws. If you have a decent apartment that you like (and that is covered by rent control, which many are, at least in the city of SF), you may have less incentive to buy.
Your friends may not care as much about owning a home. Not everyone does. Maybe they plan to rent for life (which of course they should factor into their plans as they save for the future). Maybe they don't plan to retire in San Francisco. Not everyone has the same priorities.
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