Affordability rules (Boston: good schools, income, living in)

[MrLinderman]

Originally Posted by RubyMA

It is the case for my aunt who bought a 300k duplex in cambridge. It is now valued at close to 2 million dollars.

And the land is probably 1.8 million of the value

[RubyMA]

Originally Posted by Parsec

The topic comes up if you all work in the same field. Then you realize you all make about the same amount of money. After you get past that realization, it gets weird when you see what your friends are buying and think how they can afford it. It's hard not to judge, especially if you're financially savvy and your friends aren't. Obviously I wouldn't say anything about it in real life, but on a forum I'd say anything to a stranger. Now if I had a friend who was a real estate agent or architect, I'd have no idea what they make and I really wouldn't care either. It just so happens that most of my friends and I are in accounting, finance or engineering, which explains why I come off as a numbers guy on here.

That infographic is interesting, but I don't like to compare myself to people who only completed community college. I'm willing to bet that 6% will drop quite a bit when you filter out everyone who doesn't hold an advanced degree. You can only improve if you compare yourself to people who are better than you are. No successful person ever said "Hey, I'm earning more than the guy working at the post office!" This isn't just about money either - it applies to everything in life.

I like you very much Parsec! At the end of the day it is what it is. Some people make more than others and they shouldn't have to apologize for it. Not all of us on here can be the average 100k HHI. Having a perspective from the top 6% is part of why some of us like this blog. Everyone has their own struggles or priorities at their income levels and I choose to learn from it being at the beginning of my career.

[Parsec]

Originally Posted by SpringMom3

I'm just curious about what personal finance sites you are on, Parsec, but I guess you can't post that here?

My other .02 to add to this conversation is that I think 300K can easily afford a 1mm house, because like others are saying, that extra money doesn't go to extra daycare, etc. many costs remain fixed. I'm a little late to the convo though.

I read the one on here, but I don't post because I'd have to use the same username as I do for the MA forum. I'm on a few others including one mentioned earlier in this thread, but I use a different username for those forums. I think it's against the TOS to reference them, but you can find the popular ones pretty easily if you click around a little.

Originally Posted by RubyMA

I like you very much Parsec! At the end of the day it is what it is. Some people make more than others and they shouldn't have to apologize for it. Not all of us on here can be the average 100k HHI. Having a perspective from the top 6% is part of why some of us like this blog. Everyone has their own struggles or priorities at their income levels and I choose to learn from it being at the beginning of my career.

Jeez, you make me sound like I'm an old man or something. My wife and I are only ~10 years into our careers! BTW, if you have a college degree you should hit 100k HHI the day you get married.

[Fedupwiththis]

In my opinion "rules" are just a way to get yourself in hot water or stress yourself out unnecessarily. The only true way to know what you can afford is to build yourself a budget.. period.

You also need to know your personal spending. We have friends that rent and pay about $800 a month less then us and think we are crazy.. Well, $600 of our monthly payments hit our principle, and we also get great tax write-offs. They're both smokers, eat out regularly, drive new cars and pamper themselves with grooming and brand name clothing. So even if we made the same wage, the extra $800 a month we spend in housing we get back in the form of equity and tax breaks. They feel the need to smoke, eat out, drive expensive cars, etc. So they're used to a life style that is really about $1,200 more expensive then us... So the simple "rule of thumb" doesn't equally work on our matched incomes.

When I first joined this site I got myself super stressed out after buying a new home because I thought I spent too much because my house costs about 22% of my monthly income and a lot of people here said I was crazy. Some of these people started saying how they make $75k and only spend 15%.. but I live in a high cost of living area and my wife and I make over $150k we also have no credit card debt and are overall frugal.. So the "rule" really stressed me out for no reason. I know what I can afford because I have a budget and have plenty left over each month... Build a budget and figure it out.

[timberline742]

Originally Posted by Parsec

Jeez, you make me sound like I'm an old man or something. My wife and I are only ~10 years into our careers! BTW, if you have a college degree you should hit 100k HHI the day you get married.

Yeah, drop that should. Lots of people don't. Loads of people work at jobs requiring degrees that earn significantly less than 50k around here.

I can hire people with masters from decent schools and 10-15 years experience for roughly 50k any day of the week and often do.

[MrLinderman]

Originally Posted by timberline742

Yeah, drop that should. Lots of people don't. Loads of people work at jobs requiring degrees that earn significantly less than 50k around here.

I can hire people with masters from decent schools and 10-15 years experience for roughly 50k any day of the week and often do.

You can get a freshly minted JD for 37,500 as a prosecutor.

[massnative71]

Of course it depends on what one majors in. Some "college grads" have trouble qualifying for Walmart greeter.

[Partial Observer]

Originally Posted by timberline742

Yeah, drop that should. Lots of people don't. Loads of people work at jobs requiring degrees that earn significantly less than 50k around here.

I can hire people with masters from decent schools and 10-15 years experience for roughly 50k any day of the week and often do.

Agreed. My wife is a mental health counselor who focuses primarily on grieving children and families. The minimum requirements for her job include a Master's degree, continuing education, and on-the-job clinical supervision (which often requires accepting a low-paid or unpaid internship). Most of the jobs in her field have unpredictable hours, and the employers (generally non-profits) tend to keep their clinicians part-time to avoid paying benefits. My wife has never cracked $37K. Her parents didn't pay for school, so she took out $100K in student loan debt for seven years of college so she could do what she loves. The tradeoff is that we will always have a small and outdated home, we will never have more than one modest retirement account, we can't afford to travel, and we will never be able to save for our own children to attend college. Perhaps she made a stupid career choice, but her clients sure are glad to have her professional (and cheap) help when tragedy strikes and their children need to talk to someone.

We can't all be executives, investment bankers, well-compensated "consultants," or whatever else it is people here do. Some of us are just ditch-diggers, and sometimes we need advanced degrees to dig those ditches.

Also, bear in mind that getting married doesn't always double your earning potential. Yes, many people with high earning capacities unite to form "power couples" that take the real estate market and Mercedes dealerships by storm. But that's not for everyone.

[timberline742]

Originally Posted by massnative71

Of course it depends on what one majors in. Some "college grads" have trouble qualifying for Walmart greeter.

STEM majors.

Not Boston, but I hired a Duke science major (masters) for under 50, with experience, in San Francisco and that was not that long ago. Brilliant man, now working in Australia on his Ph.D. We can get PhDs with experience for under 70k, and MS with experience for 50ish, in sciences from good schools.

People don't earn that much from top to bottom.

Originally Posted by Partial Observer

Perhaps she made a stupid career choice, but her clients sure are glad to have her professional (and cheap) help when tragedy strikes and their children need to talk to someone.

It's not stupid if she likes her job and she's helping the world. I never chose a major based on earning potential, and I'm glad I didn't. I made far more as a C level Exec Assistant than I do now, but damn, I hated it. I did it because I was good at it and it was employable as I tried to get in the field I really wanted to be in, it took 10 or so years.

[Whatsnext75]

Theres a lot of MIT grads who truly want to help the world and earning potential isnt a number one priority for them. Part of their mission statement is to basically use their special brains to help humanity. Now im not saying they are poor by any means but i work with a lot of them at a non profit and im always so impressed by their kindness, empathy and intelligence. They actually make me feel better about the world. They need a roof over their heads to live in this city but theyre not obsessed with living in weston or wellesley.