$3,600 a month for housing in Silicon Valley for a family of 4 seems crazy low. The article says that includes $2,100 for mortgage and then I guess that means $1,500 for taxes. It doesn’t seem right that mortgage is just slightly more than property taxes.
Quick research shows that Silicon Valley property taxes are about 0.8%, so that means their home is worth a bit over $2 million. Even if you assume they only borrowed say $1.5 million, that is still about $7k a month.
So either they are lying or have paid off a ton of their home (or I guess they bought it years ago when prices were 1/3rd what they are now). Either way, the chart is meaningless showing a crazy low housing cost for Silicon Valley.
My wife and I paid off her MBA Student debt of $200k in about 4 years.
It was able to happen because we both make well above median salaries, and we’re 33 with a kid and still don’t own a house. It’s mind boggling how we expect anybody making close to a median salary to climb out of any amount of debt. Even putting $10k per year in post-tax dollars into the debt black hole is fucking impossible for a single person making $50k a year.
We should just have a “Thread of awesome Matt Levine stuff”. But since we don’t, I’ll put this here:
If you are a young person with no credit history, or a person with bad credit history, you will want to “build your credit.” This consists basically of creating a long record of reliably repaying your debts, so that credit reporting bureaus think you are a good credit, so that banks will happily lend you money, so that you can buy stuff on credit cards and get leases and mortgages and car loans. If you have no or bad credit this is hard, though, since no one will advance you any credit, so you won’t have any debts to pay, so you won’t build credit.
There are canonical approaches. Banks will give you credit cards with low credit limits so you can start small and build from there. Or they will give you secured credit cards: You put $1,000 in a bank account, you get a linked credit card with a $1,000 limit, the credit advanced to you is secured by the money in your account, the bank takes no credit risk but reports repayments to the credit bureaus, etc.
What if there was a simpler way? Yesterday reader Sark Asadourian sent me a link to a Credit Building product from Canadian fintech Koho, and I haven’t stopped laughing about it since. Here is the “How it works” section of the website:
1 Start by subscribing to Credit Building for $7/month in-app
2 Sit back. We’ll report your progress to a major credit bureau and help you grow your credit score in just 6 months — without having to lift a finger
3 Ensure there’s $7 in your Spendable account each month to cover the subscription fee. That’s it!
They will demonstrate to a credit bureau that you pay your bills, by sending you a $7 bill each month, which you will pay. What is the bill for? For demonstrating that you pay your bills. They’ll charge you $7 a month for charging you $7 a month. What you get for the $7 is a record that you paid $7. Which could conceivably be worth $7 to you! Possibly this is good for the customers! I cannot stop laughing. This is maybe the best financial product I have ever seen.[13] “For the low cost of $7 a month, you can pay us $7 a month.” Everything else is so dull and overelaborated. Imagine being the person who came up with this. Imagine the bright wild gleam in your eye, coming in to work that day to tell your colleagues.
Out of curiosity - has anyone ever reported anything to one of the credit bureaus? What kind of process is it like? If I just called up Experian and said my brother had an auto loan from me and paid it off, what kind of due diligence should I expect?
It is possible to report information to a credit bureau , but generally it is not practical unless you’re running a larger small business, because of the requirements to become a “data furnisher” to the major credit bureaus. It can take a lot of time, and you will need to meet a minimum number of transactions.
We send our stuff to a collection agency that tries to collect, charges a percentage if they do collect, and reports it to them.
I need to deal with some excess HSA contributions, anyone know the rules on this? (current year) Internet is just like “pull it out plus the gains on it” without a clear explanation on how to calculate it and my HSA provider just has a form to fax (wtf) asking how much you want to pull out. Is there any specific way to calculate/record the basis and gains? Also any rules on which contributions I need to pull out? I’m dealing with a two employer situation but the first employer just kept shoveling money in as if I was married or something and blew through my limit on their own. I didn’t notice because they threw some extra money in there outside of my usual payroll contribution (encouraging employees to take the cheaper health plan, USA#1). My new employer is scheduled to make one more payroll deduction to my new HSA so [if allowed] the easiest way to fix things is to let the next contribution go in and pull from my old HSA, otherwise I’m contacting HR to stop the next contribution then restart for 2022 and I’d also need to calculate the excess across two different HSA accounts. Also is there any requirement to contact my old employer to have them deal with things on their end? I feel like they could be subject to extra taxes on this as well since everything was made through payroll contributions.
My wife and I have a similar conversation a couple of times a year, not same subject matter but same bullshit.
Wife: Hey Melk, you’re gonna love this. I was talking to [insert friend here] and she said [insert nonsensical bullshit here].
Melk: That’s ridiculous, surely you called her out on this bullshit
Wife: Of course not, sometimes your friends just need to vent and they just want someone to listen
Melk: Yeah, maybe, but I mean come on. That is just such complete bullshit
Wife: This is why you have so few friends.
You just need to have bland guy friends where when they vent, it’s about the coach not passing on a Crucial Third Down Situation. Maybe his point is equally stupid, but you just drink beer with them and get yourselves and some strangers at the bar all equally made at the coach and then once that’s agreed you go home. Who the fuck wants to hang out with someone and talk about their relationships and finances?
I just got a new credit card. When applying, I added my husband as a user. The terms said that I’m solely responsible for his charges; given that, will my card’s revolving limit still count toward his monthly utilization? I ask because he has another card of his own and I wanna know if the denominator of his utilization is the sum of both limits or only his own card’s limit.
I’m guessing the answer is yes it will reduce his utilization, but it’s a little strange to me that one can earn credit for purchases one isn’t responsible for paying. I’m pretty sure that’s how I’ve built my credit though. Years ago my mommy opened a joint card for me on which she’s the primary holder (with probably the same terms) and only now am I bothering to get a 2nd card. After some googling about credit scores, I’ll keep the old one open but lock its spending so that a hacker can’t use it.
Yes, the entirety of your limit will count towards your spouse’s total available credit and utilization. I did the same with my partner a few years ago to build her credit and that’s what we saw in Credit Karma.