Probably because they need it for a house down payment in the near future so they can’t risk investing
What is this risk you speak of? Ive been told “line goes up”
Of course but I think you’d have to be insane to leave yourself such a small cushion. $9k a month sounds like plenty to most people but the average high earning household is going to be used to a higher standard of living and cutting back to that will be difficult. Savings are going to suffer, there’s a lot of pressure on the high earner or both of them if it is more of an equal earning situation so they have to keep grinding. Maybe they pay for amazing disability insurance but if either person has an employment/health issue they’re in trouble.
Give me a 1-2 million dollar house in that situation so i can save a bunch and hopefully quit the 70 hour a week job before I die or blow my money on fun stuff, not a house that is basically just used to sleep in.
I get paid every two weeks. It’s really fucking annoying. Because most expenses are monthly. So I just plan around having 1.5 times the monthly every 5 months or so.
Yeah I mean it’s hard to even think about their situation, it’s so abstract. I’d value retiring earlier over having the sick house, but if I had that much money before age 40 or 45, I might be saying why not both? They could buy the house and be in a position to retire by the time they paid the 10 year mortgage off.
I don’t know, I get paid every two weeks and the two months where I get a third pay cycle are glorious times.
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There are plenty of people that, instead of planning out thoughtfully what would make them happy in retirement, spend all their time chasing the bigger house with the nicer view on the assumption it will make them happy. I guess these people could be the unicorn couple that really truly is just one real estate transaction from personal fulfillment, but I kind of doubt it. Based on what I know about people, they are more likely to be the rich retired couple that spends retirement in court fighting with their neighbor about the size of the neighbor’s new addition or deck. Relaxing!
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Haha right… I agree with that 100%. A sick house in the LA area with an ocean view is my absolute dream home, but I’d much rather retire earlier. If my choice was retire at 40 or 45 without it or work til 50 or 55 and get it, I’d probably be willing to work - but I also love what I do.
But if I were like 50 and could retire very comfortably or work til 60 and get that house, no way. Then the extra 10 years would make up way too much of my likely remaining life.
The size of houses is so stupid. I would love to live on the ocean, who wouldn’t, but the houses are stupidly large. Nobody uses more than like 4 rooms in their house, it’s pure vanity. The 2,000 SF house on a great lot doesn’t really exist in coastal SoCal.
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kitchen, bed, living room, kids bed, bathroom x2… errr wat?
don’t forget the gift wrapping room
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If you aren’t making your kids sleep in the kitchen then you’re spoiling them.
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Today’s bogleheads hate read
Our finances need a MAJOR overhaul.
We need some major financial help. Due to some job setbacks our finances are a bit of a mess and need some advice moving forward.
A little about us: Family of 4, two incoming kinder kids in great public school, I stay at home, DH works in tech- late 30’s.
Here’s a run down of our financial situation:
$250k cash
$400k investments (retirement and etrade)
$75k kids 529
Home valued at $1.6-8m (mortgage is $347k with PIMI around $3k a month, 3.25 rate, home is about 2500 SF, will need about $100-150k in the next 5 years for new windows and some cosmetic updates). No plans to move or upgrade to another home. We will likely stay through HS for kids.
Have a HELOC up to 100k we can pull fromCompensation:
$400k annual ($200k salary, $200k commission/bonus which is reliable but hard to predict at what point during the day)
Equity position in company (should go public, hard to predict how much, equity stake is about 1%) in next 5 yearsOur investments/savings took a backseat for a few years when I decided to stay home and my husband took a job with a lower salary. We were disorganized with our finances last year with a hectic life and paid the price. We made a major error when we took out the heloc for security and somehow missed the first payments ($100!) and it dinged our credit pretty badly so working with a credit repair for this and it should be removed.
We are working on getting everything sorted out but what kind of goals would you have moving forward in our situation?Some long term goals
- Get a small vacation property we Airbnb (budget would be around $700-750)
- Pay for kids college
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Gee, why does the housing market suck so much?
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100k-150k for new windows and some cosmetic upgrades?
Windows pretty expensive these days imo and 2500SF is a pretty big space. “cosmetic improvements” actually probably means “renovate the old kitchen entirely” based on this person’s grasp of reality.
I haven’t seen PIMI before, is that the same as PMI? My googlefu failing me here.
I can’t really think of any good advice other than just “pay attention to your finances so you feel less anxiety.”
Love the 350k mortgage on a house “worth” 1.8MM.
The one bad part of my house is the small master bathroom that hasn’t been updated since it was built in 1980 and we had a guy come in and quote $30k for like a new shower and tile so yeah I believe that…
I bet the ding to their credit was like a 50 point drop to 775 or something stupid like that, what a disaster!
Exactly. That’s like 4 nice vacations! Wtf I don’t care if my shower sucks, literally zero VORP
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I’m not saying you guys are wrong, but we renovated our master bathroom and installed a shower in our basement right before the pandemic started and I am enormously happy we did it even though the price ($65k or so) was outrageous. I posted about it either here or in the in-between forum.
Edit: Here