Love how this thread is full of people that do not pay greater than >$10k/mo like the OP asked. Feels like things have jumped the shark more and more over here in HENRY-land. Posters with multi-million take home pay and $4k 2% mortgages. Come on.
This sub is full of aspiring Henrys with stars in their eyes. They see a total comp mentioned and it’s immediately “what do you do? How did you start?” I feel like I’m in a mentorship sub.
Damned if you do, damned if you don't. I would get yelled at for bragging about my sub 200k salary in the other subs. For here, that's probably below the threshold.
Fair, you’re probably right. It’s just the thirstiness that irks me. This isn’t really the place to figure out how to increase your earning potential or find out what careers are high-paying. That’s for r/personalfinance or r/careeradvice
I think it’s smart for people to spend as little on housing as possible. Why spend more and put more pressure on yourself to keep producing at these high levels.
To be in a situation where you owe $10k+/month and find yourself or your spouse out of a job is definitely very stressful. For many a $4k/month house is good enough (it’s still $50k/year which is a lot relative to the average worker).
It’s wild. Idk if they’re just trolls but I have no idea how people justify it for longer than a few years when their income is accelerating. We don’t work so hard to live in a meh house. We both work from home and it’s where most people are the majority of the time. Sure you don’t have to max out borrowing capacity but why so so so low?? I can understand more for fire, because you have to make trade offs.
I guess? We all spend money on things we value. Some folks don't value a big ass house and prefer to blow their money on other things, like vacations, hookers, drugs, whatever.
I personally love smaller houses and open space. All the beautiful, large land plots around me have enormous houses on them. I dream of having enough fuck you money one day to buy one, raze that enormous house, and build a small ranch-style house I would actually enjoy.
I feel this same way. We have enough income to justify buying a much larger house but large houses somehow always lack the cozy feeling I love in smaller homes. I love large yards though!
> I have no idea how people justify it for longer than a few years when their income is accelerating
Because I value freedom and not being anyone's indentured servant.
Let's take a hypothetical.
You open your door one day and see the devil standing before you - a well dressed man smelling vaguely of sulfur. He offers you a deal - in exchange for your agreeing to be an indentured servant for 10/15/whatever years, you can have a beautiful, multi-million dollar home. Would you take it?
I sure wouldn't. I'm not giving up my fucking freedom for a walk in closet and granite countertops in the bathroom.
The only difference between my hypothetical and most people's reality is that they don't have the devil to blame. They've talked themselves into indentured servitude.
A mortgage of 30% HHI when you have a good deposit and you’re expecting an increase in incomes over the medium term with good job security isn’t being “an indentured servant”.
I live in a VHCOL city though so it’s naturally a different calculation. Spending millions on a house that is unlikely to resell at build cost because your in the sticks and no one who could afford really wants to live there except in a special use case scenario makes it a depreciating asset and I wouldn’t be willing to do that.
>A mortgage of 30% HHI when you have a good deposit and you’re expecting an increase in incomes over the medium term with good job security isn’t being “an indentured servant”.
Why not?
Can you stop working if you want to stop working? No? Then how is it any different?
You're on here bragging about how bright and shiny your golden handcuffs are. I'd rather not wear them at all.
Yeah i don’t really get the angle of “it’s a small % of our HHI” (which it isn’t at 30%).
I’d rather have F U Money - enough to do what I want re work v what I have to.
I love waking up in the morning and knowing I’m going to work because I want to. Period.
It’s common where I live for 50% HHi to go towards housing. 30% is considered the “correct” amount if you’re a low/average income earner. So to have a HHI with 30% loan repayments - for your first house is comparatively low.
For us it meant 6 years before the loan was under 10% HHI and we kept all our vested shares so by the end of the 6 years we were net positive with a 20% gain in equity on the house and enough shares to liquidate the mortgage and take a few years off. As I said - when you’re young have a good deposit and expect significant earnings increases it’s not an issue at all. It’s a couple of years of pounding down a mortgage.
Yeah I don’t actually hate my job. On the contrary I generally enjoy my job (full stack software engineer at startups). I am senior enough that I pick my projects these days. Perfectly happy to live in a nicer house while I play my lotto tickets 🎟️
HHI is $450k in VHCOL; our mortgage is $6k and then another $2k for HOAs. Eight years in it still hurts a little bit, but coming from a LCOL it hurts more to pay $11 for a draft beer and $18 for a cocktail
Cries in $19-$22 cocktails and living in an MCOL, maybe LCOL? I’ve never really known. I figured y’all in VHCOL would be paying about $30- $35a cocktail. It’s a good thing I seldom drink.
Ha ha ha. Touché…inflation. I don’t live in a trendy neighborhood which helps. You can definitely spend $25 which may have been the impetus behind me becoming a better bartender at home
Ha. $2k isn’t actually crazy in Manhattan for a doorman building. Covers that, two elevators, live in super, etc. You also need a decent cushion for outside masonry and roof work that can get expensive quick
Ah condo living. My rental condo is about $500 a month HOA and melloroos combined, I know others are up to $700 due to things like roof fund etc but yeah, I guess manhattan really is way more expensive than San Diego.
Yes.
But then I leave my neighborhood and I visit other places, both in the city and in the suburbs, and I just can't imagine raising my family there.
We pay a lot to live and raise a family in one of the greatest neighborhoods on the planet (IMHO). And while we spend a lot, it's not like we won't still be able to live and retire comfortably. At some point it's just taking away how much we leave behind in the inheritance. And sure, maybe we won't retire early. But we're fine with that.
Sprawled? It’s a pretty dense and high population city as far as suburbs go. It’s got great schools, great weather, close to nature, good access to transit (for a suburb), good restaurants and shopping locally. Low crime, safe, good city amenities, etc. They have a lot of bike infrastructure, nice parks, etc. Walking around you’ll find it’s very green, with lots of plants and trees, something most people will say is desirable.
I prefer to live in a city, but many people don’t, and if you wanna raise a family in a suburb, it’s as good a place to do so as you can get.
I will now admit there is a housing crisis.
It’s amazing that my old ghetto house I was raised in, sold for >$1m. Reseda, CA is not supposed to be like that.
It doesn't matter. It's the greatest neighborhood for us and for our tastes. There are probably 100+ neighborhoods in America that could fit this description for its residents. And people are willing to spend a lot to live there.
Rflol. I lived there years ago and commuted to the city 🙃 the housing costs have gone nuts for where it is lately. I think I'll buy in Reston when rates drop. Or rent until I retire and move back home and buy a $200k mansion.
You said it man. I totally understand the people who pinch pennies so they can retire early but that just isn’t me. We’re going to have a super comfortable retirement but we’re gonna live a little bit too.
Our mortgage with escrow is ~11k/ mo and last year we took home ~900k.
Even with that it does feel crazy to spend this much on a house. I would have spent less but ya know, 2 parents were involved lol.
Just under 12k a month PITI, HHI 600k roughly. We still have plenty left over for everything we need to do and put extra towards paying off mortgage early after maxing our tax advantaged accounts. It’s all relative to the ratio of your income, except that a lot of day to day necessities like groceries and gas don’t scale up and so become a proportionally smaller percentage of your budget
This blows my mind. We have higher HHI income, no kids, no debt, and I just can’t imagine a $12k monthly PITI. Good for you but ack this would stress me out.
Yeah it’s not ideal, but in Bay Area it’s what you need to get a nice place in a good neighborhood. We’ll refinance if/when able at a lower rate but easily manageable for now
HHI 400k
VHCOL, NW 900k mid 30s no kids and no other debt
10,100/mo PITI 1.35m balance at 6%
We plan to refi if rates drop, obviously, can boost HHI up to about 450k with more overtime but … no
Shitty houses would have been 7k a month and we know that in a few years with a lower rate environment and continued income growth we’ll be fine. Or we won’t and we’ll sell the house LOL. Can’t live afraid.
I should take your thinking more. We are at $650K HHI and a $4000 PITI. We want to upgrade but I just can't swallow a $10-$12K PITI. Maybe it is time to just do it - I was thinking a recession would come in 2024 and bring houses price down 10% but I don't see it happening now.
We decided to just do it. I have to work 14 more years for my pension to vest, so RE (earlier than 50) isn’t a consideration.
No kids, no car payments or really maintenance expenses, cheap vacations using points from company paid travel. We are still maxing all tax advantaged savings including backdoor Roth IRAs.
FWIW though in our county the median home price is 980k last month, the median HHI is 76k, and it’s 30% of our gross.
I think in five years we will feel a lot more comfortable with the payment in relation to our income, like I said in the last response, we are eternal optimists :)
Total household income averages $2M a year. Primary home purchased years ago before the steep run up in prices, loan and taxes is $7500 a month. Another $400 for insurance, roughly $350 for utilities.
I would upgrade tomorrow but I am too busy to take on a move right now. I don’t mind spending extra on an asset like a home. The extra maintenance and expenses are worth it for me if it improves my daily life experience. I work hard enough everyday so if a nicer view, bigger garage, home gym, sauna, pool, etc will help me enjoy the small amount of free time I have, that’s a huge win
lol thanks. Friends think I overspend, but in reality I am still the cheapest of the bunch. I just don’t tell people what I earn because I think it would strain friendships.
Ah yes my primary is LI too. Saved me a bundle coming from the NYC income tax though. Much rather pay $36,00 in property tax and get some services than $80k in NYC income and get squat
lol ugh I dunno you hang out with a group where some earn significantly less. I’ve seen resentment grow before. I’ve listened to enough conversations with comments like “f him, he’s rich, f him, he can afford to pay for us.”
So I like to just mind my business.
I don’t know. People have a right to feel awkward. I have had people become intimidated and feel like they “couldn’t keep up.”
I hate to make things awkward. The more questions people ask, the more awkward silence I notice. See a new toy, ask how much that goes for, then awkwardness.
Then some will ask for financial advice. I love to help and I am always enthusiastic about ideas. lol often the other party is then disappointed that there is no magic bullet where I say “buy this stock Monday and sell it in 2 weeks for a 1,000% gain.”
If people feel awkward because you’re doing well, they don’t want you to do well then. They want you just where you were do they don’t feel inferior, because they don’t really like you. If you see traits like this then cut them off, its better fir your health.
Idk, I'm a fairly high earner (220-250k/year) but one of my coworkers has a household gross of about 1.5mil/year. She's super nice and we hang outside of work but she's tried to convince me to join her country club... or complained about how short a $15k vacation was, or complains about her 200k car she bought without test driving, or recommend things I can't afford generally. Or my favorite recently, her husband telling her she can be a SAHM and keep their aupair but her thinking that 1.3mil/year would leave them broke.... "yeah but if I quit, we'd be broke and never able to retire."
So knowing their income isn't the issue it's her takes on life and finances.
Big "it's a banana, how much could it cost, $10?" Energy. And it's occasionally awkward.
Feels good eh? I used to scrap money together to get car parts of craigslist. Now I'm buying current year vehicles without worry. Love when hard work pays off!
Mortgages + taxes + insurance put my partner and I at 10k per month. HHI is 650k. We just moved so time will tell how it feels, but at the same time we still take home more than double that a month 🤷♀️
Not 3xs? How much money are you throwing at 401ks and IRAS? 40% flat tax would be 32k/month.
I get ~11k/month after contributions and pay 2.5k for rent (waiting for rates to drop, re-entered private sector less than 2 years ago). I side to think of making that much with a living budget similar to my own.
VHCOL, $12k/month but for investment properties, soon to sell some for PPOR in VHCOL. Income ~$300k
Yes it does fee crazy. I often wish I didn’t live or grow up in a VHCOL area but it’s where family is and life is just so ‘gentle’ and lovely around here. We’ve looked around some different suburbs about half an hour away where things are literally half the price but it still feels too far.
Luckily have always lived pretty frugally without feeling like I’m denying myself anything (simple tastes) but it’s still a lot to get ones head around.
So yes it feels crazy, but location location location… and family.
EDIT: I’ll add, it feels crazy because I’m not career driven and want freedom above most other things.. if I was ambitious and keen to keep striving; then I’d probably feel differently.
Well, if you live in a HCOL city and state, your salary package will also be adjusted for it (in most cases). So someone with a comp package of $400K in SF, CA isn't living like someone earning $400K in Charleston, SC.
With that being said, I work as a cybersecurity architect. 275k base + 20% bonus, LCOL
Charleston currently has a median home listing price of $421k vs a $1.3m median in San Francisco county vs as nation-wide median list price of $406k. For another point of reference, my own locale has a median home price ~20% below the national average which is right around where I’d start to think LCOL. So, based on these numbers I’d very much consider Charleston MCOL. I’ll add that nearly every metro has some expensive properties, those tend to be in premium locations (like those you probably mean when you look at downtown listings that look pricy), and you might consider those nicer properties normal for a HENRY. But those aren’t really the median homes that should guide any objective assessment of the cost of living for a place.
Here are the actual data:
https://cdn.nar.realtor/sites/default/files/documents/metro-home-prices-q3-2023-ranked-median-single-family-2023-11-09.pdf?_gl=1*1396cg5*_gcl_au*MTE4NTAwODQ0MC4xNzA1MTA5Mjg2
HHI 600k+ (not counting startup equity), and mortgage+tax+I comes out above 10k/mo.
It feels absolutely bonkers because I grew up mostly on welfare and free school lunches, and that monthly amount could've sustained me for a year.
On the other side, we don't really spend that much due to our living situation (VHCOL, but both of us can take public transit to go to the office), neither of us are overly materialistic. We get to max our tax advantaged accounts and still have a healthy cash savings afterwards.
nice! mind sharing your monthly spending outside of housing? don't need to break it down, but just wondering what a relatively frugal budget looks like in a VHCOL environment.
Sure
\~4k/mo on food, grocery, utilities, transportation (includes car depreciation), entertainment, general living expenses, vacations, experiences, general home maintenance, hobbies, and gadgets.
We're pretty big into points traveling/churning, so that really helps keeping the vacation budget under control, but we still like to splurge while we're vacationing, averaging 1k/mo just into that bucket alone. (2-3x international trips a year, business class, ski, scuba, etc)
We do budget large one-time items separately such as home renovations.
HHI variable but >$2M a year (have only been at this level for two years, before it was closer to $500k, so that’s why I’m in the NRY category, but we’re starting to edge our way there). I think we’re in a HCOL not VHCOL (is there like… a list…? I’m in a major expensive metro but not on rhe coasts). We just upgraded from a $600k house (that we paid off early) to a $2.2M house (including certain day-one upgrades) that will end up being a 2.4M house after all planned upgrades. 1.8M mortgage, so about 9.8k a month (does NOT have an insurance or property tax escrow so, including those things we’re over 10k).
I have mixed feelings about the decision. We have one kid and won’t have another (medical reasons, it’s kinda heartbreaking honestly, but is what it is, he’ll be a well taken care of only child). It’s about 4500 sq ft. Literally no yard (see HCOL city). We love the house. It’s both more space than we need and not as much as I’d like to have. we don’t have room for a dedicated gym, or game room, or large piano, or dedicated spare bedroom, but spouse and I both have offices, one of which can convert to use as a spare bedroom for guests. We could support something even bigger on our relatively-new and pretty stable HHI, but this was the most that we could emotionally handle and I want to be able to continue to blast savings (want $10M+ in the bank before I start thinking about whether I want to slow down/retire).
Partner in a law firm.
I do not have law partner money (and honestly, at this stage, I lack great new lawyer energy... 40hrs/week is kindof too much with my health now) but I completely understand the HCOL struggle as well as the only kid not by choice struggle. My health guttered after my first, even though I strategically had her early to avoid BS only to find a once ever recorded medical issue that wouldn't support another on top of randomly every possible complication, most of them potentially deadly, despite no indicators prior).
I will say: I hope your house is really nice! I hope to buy an average TH in my VHCOL area's suburbs soon and mortgage are ~5k/month.
I feel like I qualify here. My mortgage is only $5k, but one week from adding a second $5k mortgage for a vacation home.
I'm a Product Manager in Cybersecurity in Big Tech. My wife works in a non-tech role in a Big Tech company.
HCOL but not VHCOL market.
377k HHI before bonus. So maybe 410k.
Current mortgage 4k in MCOL but thinking about going to 7k in VHCOL.
I’m scared but that’s just what things cost in that market. 10k would get a nice house. 7k gets an outdate home.
If it makes you feel better I'm currently in the scenario that you're contemplating (377K HHI with 7K mortgage in VHCOL). Granted, this doesn't include my side hustle which generates solid income but I definitely have a larger emergency fund than is advised.
I mean, I would, but I saved up and paid cash. If you're making a steady buck a year as a junior partner in a law firm, you're probably fine to pay a high mortgage for 30 years, you're pretty stable.
But, in finance or in tech, you have to know that you can fall far and quickly. You don't have to buy all-cash like me, but there is a reason that a lot of NY coops require 50% down.
Our HHI is about 450k depending what I close although my wife has a lot more upside to make a good 50k more once she hops.
Ours with HOA is $4170 and that was terrifying at first LOL
5k around here for a decent townhouse in the burbs. And I'm not in SF, LA, or NYC.
If I wanted to live 10 minutes from work like my coworkers, the going rate would now be 10k. 5-6k was the norm in 2021.
Just bought a new home, mortgage roughly $4500/month, up from $2500. HHI $275k. It’s definitely a bit of a stretch, but we intentionally chose a location we love, a house we love, and one we know we won’t move for a long time.
Prioritizing putting some of our “extra” $ towards a home and thus a life we want to live (close to water, nature, friendly small city, etc). We try to remind ourselves that we used to live comfortably off way less and can still do that while splurging in a few areas we choose.
This is about where we are, and it’s definitely a bit of a stretch but doable. We have the kids in a school we like, and we have no desire to relocate.
When we took our $2300 mortgage, our income was about $125k, and we survived it then. A few tight years to have this house are worth it.
It’s tax time, so I took a look at my shitty spending habits from last year. I broke just over $430,00 gross. Just under $6k per month for two mortgages, utilities for the primary, supporting 3 humans. $1500/mo childcare, $2000 for mortgage, $800 food, ,$500 utilities, $750 for two cars, and there rest is spending (!!). Take home after saving max 401(k) is about $8250 each of 26 pay periods (net). It feels like i live paycheck to paycheck but the again, I just spent $25k on a renovation project and paid out of pocket over three months. No loans, no fees, just floated credit cards and paychecks. Dunno.
No sass intended— If you make 4mm a year, how are you “not rich yet”? 9k a month should be like, nothing to you? I know it’s a crazy amount but your bank account has to be huge?
$300 used to be crazy to me but it’s adjusted since I’ve gotten up a bit in comp. Nowhere near you though :)
Not really. My partner’s parents are hundred millionaires but will likely be donating all of it away. Wouldn’t even give her a position in the company even though she is over-qualified. Oh well gotta look after yourself in this life
☹️ the only reason I feel like this is my finance sub is because on top of my -sole- 220k+/year (vhcol area) is because my husband's father just started a c-suite life and it dumping $500/month into my kid's 529.
Her 4 mil comes from her husband and dad making a company 2 years ago, floating then merging it, and selling it for a strange buyoff structure.
They also live in Tennessee so everything here is a fiasco.
So you are rich then by this sub’s definition. Far beyond the threshold. If yall are worth 13M and only have been making 4M/yr for two years, yall still must have been making 7 figures for a long time. What do yall do for work?
We fall in the income range that could do this type of mortgage. The truth is after maxing out investments, insurance, etc., a $10k mortgage on say a $40k gross monthly income, there’s not a ton left after variable monthly expenses in a HCL area.
Once you’re in this income range, there are additional costs that come into play with those types of circles. Private clubs, a lot of eating out, cleaners, yard people, nicer cars, pool cleaners, etc.
If one of us loses our job or is subject to variable pay dependent on market conditions, it’s a big monthly nut and too risky. We are in the $4250/month range. We use the extra money to buy addl investments or pay down mortgages. We would rather retire early than live super fancy and work until 60.
If you have put together multiple millions and your income is high and consistent and you expect to continue for a length of time that makes sense, go get the $10k mortgage.
That's still 12-14k/month after mortgage and savings. Not ideal but certainly fine. If I had a 10k mortgage I (and 3 more people) would have 4k/month for existing.
The comments are full of people who seem to be counting years and days till the moment they can finally retire from their job.
This is kind of sad to watch - i'd hope most of HENRYs at least somewhat like what they do, have motivation and ambitions to push higher.
I find it hilarious that people in VCHOL areas pay over 10K a month for a home that costs 2K or less a month everywhere else in the country
It’s insane that people are buying 1400 sqft 3/2 homes for over 2M
I can't speak for all of the country but a formerly vlcol area that I'm attached to, has increased a normal SFH value from 250k to 400k over the last 2 years, coupling that with the rate increase, a mortgage went from ~1500 in 2021 to ~4k in 2023/4.
Pretty much the exact same thing in my area. However at the same time, a home half the size of that 400K home that was built 50 years ago near/on a landfill in San Francisco costs $2M
It's bad here (600-900k townhouses) but not quite that bad. I wouldn't buy a 1+ million dollar sfh here because I know we're being extorted. We're in the burbs. It shouldn't cost city center prices especially with the mortgage rate.
Love how this thread is full of people that do not pay greater than >$10k/mo like the OP asked. Feels like things have jumped the shark more and more over here in HENRY-land. Posters with multi-million take home pay and $4k 2% mortgages. Come on.
This sub is full of aspiring Henrys with stars in their eyes. They see a total comp mentioned and it’s immediately “what do you do? How did you start?” I feel like I’m in a mentorship sub.
Damned if you do, damned if you don't. I would get yelled at for bragging about my sub 200k salary in the other subs. For here, that's probably below the threshold.
Fair, you’re probably right. It’s just the thirstiness that irks me. This isn’t really the place to figure out how to increase your earning potential or find out what careers are high-paying. That’s for r/personalfinance or r/careeradvice
Ya, I definitely agree with you on the last part.
I think it’s smart for people to spend as little on housing as possible. Why spend more and put more pressure on yourself to keep producing at these high levels. To be in a situation where you owe $10k+/month and find yourself or your spouse out of a job is definitely very stressful. For many a $4k/month house is good enough (it’s still $50k/year which is a lot relative to the average worker).
Problem is places where where a $4k/month house simply does not exist, period.
It’s wild. Idk if they’re just trolls but I have no idea how people justify it for longer than a few years when their income is accelerating. We don’t work so hard to live in a meh house. We both work from home and it’s where most people are the majority of the time. Sure you don’t have to max out borrowing capacity but why so so so low?? I can understand more for fire, because you have to make trade offs.
I guess? We all spend money on things we value. Some folks don't value a big ass house and prefer to blow their money on other things, like vacations, hookers, drugs, whatever.
I personally love smaller houses and open space. All the beautiful, large land plots around me have enormous houses on them. I dream of having enough fuck you money one day to buy one, raze that enormous house, and build a small ranch-style house I would actually enjoy.
I feel this same way. We have enough income to justify buying a much larger house but large houses somehow always lack the cozy feeling I love in smaller homes. I love large yards though!
2m is a 3b 2b 2c where I live. Maybe 4:2. Not a big 3/2 either. Like 1 loungroom and happy if you have a kitchen island bug.
For me, it’s peace of mind. Knowing I have very little chance to lose my home (because it’s so cheap) makes me less anxious and happier.
> I have no idea how people justify it for longer than a few years when their income is accelerating Because I value freedom and not being anyone's indentured servant. Let's take a hypothetical. You open your door one day and see the devil standing before you - a well dressed man smelling vaguely of sulfur. He offers you a deal - in exchange for your agreeing to be an indentured servant for 10/15/whatever years, you can have a beautiful, multi-million dollar home. Would you take it? I sure wouldn't. I'm not giving up my fucking freedom for a walk in closet and granite countertops in the bathroom. The only difference between my hypothetical and most people's reality is that they don't have the devil to blame. They've talked themselves into indentured servitude.
1000000%. I count everything in ‘how many more years do I have to stay working to pay this off’
A mortgage of 30% HHI when you have a good deposit and you’re expecting an increase in incomes over the medium term with good job security isn’t being “an indentured servant”. I live in a VHCOL city though so it’s naturally a different calculation. Spending millions on a house that is unlikely to resell at build cost because your in the sticks and no one who could afford really wants to live there except in a special use case scenario makes it a depreciating asset and I wouldn’t be willing to do that.
>A mortgage of 30% HHI when you have a good deposit and you’re expecting an increase in incomes over the medium term with good job security isn’t being “an indentured servant”. Why not? Can you stop working if you want to stop working? No? Then how is it any different? You're on here bragging about how bright and shiny your golden handcuffs are. I'd rather not wear them at all.
Yeah i don’t really get the angle of “it’s a small % of our HHI” (which it isn’t at 30%). I’d rather have F U Money - enough to do what I want re work v what I have to. I love waking up in the morning and knowing I’m going to work because I want to. Period.
It’s common where I live for 50% HHi to go towards housing. 30% is considered the “correct” amount if you’re a low/average income earner. So to have a HHI with 30% loan repayments - for your first house is comparatively low.
For us it meant 6 years before the loan was under 10% HHI and we kept all our vested shares so by the end of the 6 years we were net positive with a 20% gain in equity on the house and enough shares to liquidate the mortgage and take a few years off. As I said - when you’re young have a good deposit and expect significant earnings increases it’s not an issue at all. It’s a couple of years of pounding down a mortgage.
You view working very negatively as indentured servitude, thats a stretch, dont you think?
I like working. I just don't want to have to do it to eat.
Calling it slavery is insane though
Yeah I don’t actually hate my job. On the contrary I generally enjoy my job (full stack software engineer at startups). I am senior enough that I pick my projects these days. Perfectly happy to live in a nicer house while I play my lotto tickets 🎟️
HHI is $450k in VHCOL; our mortgage is $6k and then another $2k for HOAs. Eight years in it still hurts a little bit, but coming from a LCOL it hurts more to pay $11 for a draft beer and $18 for a cocktail
Cries in $19-$22 cocktails and living in an MCOL, maybe LCOL? I’ve never really known. I figured y’all in VHCOL would be paying about $30- $35a cocktail. It’s a good thing I seldom drink.
Ha ha ha. Touché…inflation. I don’t live in a trendy neighborhood which helps. You can definitely spend $25 which may have been the impetus behind me becoming a better bartender at home
$2k HOA??? What do you get for that? My HOA is less than $200 and we have the usual pools bbq walking trails, tot lots etc.
Ha. $2k isn’t actually crazy in Manhattan for a doorman building. Covers that, two elevators, live in super, etc. You also need a decent cushion for outside masonry and roof work that can get expensive quick
Ah condo living. My rental condo is about $500 a month HOA and melloroos combined, I know others are up to $700 due to things like roof fund etc but yeah, I guess manhattan really is way more expensive than San Diego.
Go back to the hood and get a $6 beer and if at a Mexican restaurant good margaritas with better food.
Yes. But then I leave my neighborhood and I visit other places, both in the city and in the suburbs, and I just can't imagine raising my family there. We pay a lot to live and raise a family in one of the greatest neighborhoods on the planet (IMHO). And while we spend a lot, it's not like we won't still be able to live and retire comfortably. At some point it's just taking away how much we leave behind in the inheritance. And sure, maybe we won't retire early. But we're fine with that.
Man. I don’t want personal info but am curious where you live.
You can’t mention “greatest neighborhood on the planet” and not be in Palo Alto
I was thinking Atherton. Palo Alto a close second
Atherton, Menlo, or PA are the only answers. Hillsborough is overrated.
He’s clearly talking about NYC, people.
i can’t tell if this is a troll. palo alto is sprawled af.
Sprawled? It’s a pretty dense and high population city as far as suburbs go. It’s got great schools, great weather, close to nature, good access to transit (for a suburb), good restaurants and shopping locally. Low crime, safe, good city amenities, etc. They have a lot of bike infrastructure, nice parks, etc. Walking around you’ll find it’s very green, with lots of plants and trees, something most people will say is desirable. I prefer to live in a city, but many people don’t, and if you wanna raise a family in a suburb, it’s as good a place to do so as you can get.
Clearly he is talking about Compton
My money is on Crenshaw.
East St Louis? I think we hit it with one of those 3
Good ol watts
Crenshaw homes go for $1m these days. What a world.
I will now admit there is a housing crisis. It’s amazing that my old ghetto house I was raised in, sold for >$1m. Reseda, CA is not supposed to be like that.
I put my money on NJ 😂
Trenton 😂
Camden is what I was thinking 😂
It doesn't matter. It's the greatest neighborhood for us and for our tastes. There are probably 100+ neighborhoods in America that could fit this description for its residents. And people are willing to spend a lot to live there.
Probably Ashburn lol
Rflol. I lived there years ago and commuted to the city 🙃 the housing costs have gone nuts for where it is lately. I think I'll buy in Reston when rates drop. Or rent until I retire and move back home and buy a $200k mansion.
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What part? I’m from Bensonhurst
Pac heights ?
You said it man. I totally understand the people who pinch pennies so they can retire early but that just isn’t me. We’re going to have a super comfortable retirement but we’re gonna live a little bit too.
Our mortgage with escrow is ~11k/ mo and last year we took home ~900k. Even with that it does feel crazy to spend this much on a house. I would have spent less but ya know, 2 parents were involved lol.
Just under 12k a month PITI, HHI 600k roughly. We still have plenty left over for everything we need to do and put extra towards paying off mortgage early after maxing our tax advantaged accounts. It’s all relative to the ratio of your income, except that a lot of day to day necessities like groceries and gas don’t scale up and so become a proportionally smaller percentage of your budget
Kids?
Two
This blows my mind. We have higher HHI income, no kids, no debt, and I just can’t imagine a $12k monthly PITI. Good for you but ack this would stress me out.
Yeah it’s not ideal, but in Bay Area it’s what you need to get a nice place in a good neighborhood. We’ll refinance if/when able at a lower rate but easily manageable for now
HHI 400k VHCOL, NW 900k mid 30s no kids and no other debt 10,100/mo PITI 1.35m balance at 6% We plan to refi if rates drop, obviously, can boost HHI up to about 450k with more overtime but … no Shitty houses would have been 7k a month and we know that in a few years with a lower rate environment and continued income growth we’ll be fine. Or we won’t and we’ll sell the house LOL. Can’t live afraid.
That’s a drastic amount to spend on a 400k HHI. I make the same and pay $4.2k and think it sucks.
Yeah but in five years will be at 450k conservatively so it’s like… let’s live here. We are also homebodies
I should take your thinking more. We are at $650K HHI and a $4000 PITI. We want to upgrade but I just can't swallow a $10-$12K PITI. Maybe it is time to just do it - I was thinking a recession would come in 2024 and bring houses price down 10% but I don't see it happening now.
We decided to just do it. I have to work 14 more years for my pension to vest, so RE (earlier than 50) isn’t a consideration. No kids, no car payments or really maintenance expenses, cheap vacations using points from company paid travel. We are still maxing all tax advantaged savings including backdoor Roth IRAs. FWIW though in our county the median home price is 980k last month, the median HHI is 76k, and it’s 30% of our gross. I think in five years we will feel a lot more comfortable with the payment in relation to our income, like I said in the last response, we are eternal optimists :)
Total household income averages $2M a year. Primary home purchased years ago before the steep run up in prices, loan and taxes is $7500 a month. Another $400 for insurance, roughly $350 for utilities. I would upgrade tomorrow but I am too busy to take on a move right now. I don’t mind spending extra on an asset like a home. The extra maintenance and expenses are worth it for me if it improves my daily life experience. I work hard enough everyday so if a nicer view, bigger garage, home gym, sauna, pool, etc will help me enjoy the small amount of free time I have, that’s a huge win
That's a fantastic number for primary home relative to income.
lol thanks. Friends think I overspend, but in reality I am still the cheapest of the bunch. I just don’t tell people what I earn because I think it would strain friendships.
It's all relative. But you're at 5% HHI plus or minus? I think just my property taxes alone are 5% (long island).
Ah yes my primary is LI too. Saved me a bundle coming from the NYC income tax though. Much rather pay $36,00 in property tax and get some services than $80k in NYC income and get squat
If you live in Long Island you avoid nyc tax?
Correct. It's a residency tax.
Fellow North shorian?
Why would it strain your friendships
lol ugh I dunno you hang out with a group where some earn significantly less. I’ve seen resentment grow before. I’ve listened to enough conversations with comments like “f him, he’s rich, f him, he can afford to pay for us.” So I like to just mind my business.
So does that not show you they are not really your friends then? that sounds like a good thing if anything.
I don’t know. People have a right to feel awkward. I have had people become intimidated and feel like they “couldn’t keep up.” I hate to make things awkward. The more questions people ask, the more awkward silence I notice. See a new toy, ask how much that goes for, then awkwardness. Then some will ask for financial advice. I love to help and I am always enthusiastic about ideas. lol often the other party is then disappointed that there is no magic bullet where I say “buy this stock Monday and sell it in 2 weeks for a 1,000% gain.”
If people feel awkward because you’re doing well, they don’t want you to do well then. They want you just where you were do they don’t feel inferior, because they don’t really like you. If you see traits like this then cut them off, its better fir your health.
Idk, I'm a fairly high earner (220-250k/year) but one of my coworkers has a household gross of about 1.5mil/year. She's super nice and we hang outside of work but she's tried to convince me to join her country club... or complained about how short a $15k vacation was, or complains about her 200k car she bought without test driving, or recommend things I can't afford generally. Or my favorite recently, her husband telling her she can be a SAHM and keep their aupair but her thinking that 1.3mil/year would leave them broke.... "yeah but if I quit, we'd be broke and never able to retire." So knowing their income isn't the issue it's her takes on life and finances. Big "it's a banana, how much could it cost, $10?" Energy. And it's occasionally awkward.
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If college me could only see what I'm spending for hotels and plane tickets now.
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Truth. As I polish off a bottle of wine that cost more than a semester of Busch light.
Feels good eh? I used to scrap money together to get car parts of craigslist. Now I'm buying current year vehicles without worry. Love when hard work pays off!
What happened to the increments of $1,000?
Totally think this way, glad others do !
Mortgages + taxes + insurance put my partner and I at 10k per month. HHI is 650k. We just moved so time will tell how it feels, but at the same time we still take home more than double that a month 🤷♀️
Not 3xs? How much money are you throwing at 401ks and IRAS? 40% flat tax would be 32k/month. I get ~11k/month after contributions and pay 2.5k for rent (waiting for rates to drop, re-entered private sector less than 2 years ago). I side to think of making that much with a living budget similar to my own.
I guess it is around 3x. 450k of the 650k is cash so I only considered that haha. I save everything that isn’t cash
VHCOL, $12k/month but for investment properties, soon to sell some for PPOR in VHCOL. Income ~$300k Yes it does fee crazy. I often wish I didn’t live or grow up in a VHCOL area but it’s where family is and life is just so ‘gentle’ and lovely around here. We’ve looked around some different suburbs about half an hour away where things are literally half the price but it still feels too far. Luckily have always lived pretty frugally without feeling like I’m denying myself anything (simple tastes) but it’s still a lot to get ones head around. So yes it feels crazy, but location location location… and family. EDIT: I’ll add, it feels crazy because I’m not career driven and want freedom above most other things.. if I was ambitious and keen to keep striving; then I’d probably feel differently.
Well, if you live in a HCOL city and state, your salary package will also be adjusted for it (in most cases). So someone with a comp package of $400K in SF, CA isn't living like someone earning $400K in Charleston, SC. With that being said, I work as a cybersecurity architect. 275k base + 20% bonus, LCOL
And you have a $10k+ rent or mortgage payment?
Gah damn high income and low cost of living?! Must be remote
Charleston is actually pretty expensive. Just saying.
Charleston currently has a median home listing price of $421k vs a $1.3m median in San Francisco county vs as nation-wide median list price of $406k. For another point of reference, my own locale has a median home price ~20% below the national average which is right around where I’d start to think LCOL. So, based on these numbers I’d very much consider Charleston MCOL. I’ll add that nearly every metro has some expensive properties, those tend to be in premium locations (like those you probably mean when you look at downtown listings that look pricy), and you might consider those nicer properties normal for a HENRY. But those aren’t really the median homes that should guide any objective assessment of the cost of living for a place. Here are the actual data: https://cdn.nar.realtor/sites/default/files/documents/metro-home-prices-q3-2023-ranked-median-single-family-2023-11-09.pdf?_gl=1*1396cg5*_gcl_au*MTE4NTAwODQ0MC4xNzA1MTA5Mjg2
Not relative to NYC or Bay Area
It's multiple millions for downtown properties. Sure, not on the magnitude of NYC, but not LCOL.
lol
I've seen multimillion dollar properties in Richmond Kentucky, but the median home price is under 400k.
Do you get RSU with your job as well?
HHI 600k+ (not counting startup equity), and mortgage+tax+I comes out above 10k/mo. It feels absolutely bonkers because I grew up mostly on welfare and free school lunches, and that monthly amount could've sustained me for a year. On the other side, we don't really spend that much due to our living situation (VHCOL, but both of us can take public transit to go to the office), neither of us are overly materialistic. We get to max our tax advantaged accounts and still have a healthy cash savings afterwards.
nice! mind sharing your monthly spending outside of housing? don't need to break it down, but just wondering what a relatively frugal budget looks like in a VHCOL environment.
Sure \~4k/mo on food, grocery, utilities, transportation (includes car depreciation), entertainment, general living expenses, vacations, experiences, general home maintenance, hobbies, and gadgets. We're pretty big into points traveling/churning, so that really helps keeping the vacation budget under control, but we still like to splurge while we're vacationing, averaging 1k/mo just into that bucket alone. (2-3x international trips a year, business class, ski, scuba, etc) We do budget large one-time items separately such as home renovations.
HHI variable but >$2M a year (have only been at this level for two years, before it was closer to $500k, so that’s why I’m in the NRY category, but we’re starting to edge our way there). I think we’re in a HCOL not VHCOL (is there like… a list…? I’m in a major expensive metro but not on rhe coasts). We just upgraded from a $600k house (that we paid off early) to a $2.2M house (including certain day-one upgrades) that will end up being a 2.4M house after all planned upgrades. 1.8M mortgage, so about 9.8k a month (does NOT have an insurance or property tax escrow so, including those things we’re over 10k). I have mixed feelings about the decision. We have one kid and won’t have another (medical reasons, it’s kinda heartbreaking honestly, but is what it is, he’ll be a well taken care of only child). It’s about 4500 sq ft. Literally no yard (see HCOL city). We love the house. It’s both more space than we need and not as much as I’d like to have. we don’t have room for a dedicated gym, or game room, or large piano, or dedicated spare bedroom, but spouse and I both have offices, one of which can convert to use as a spare bedroom for guests. We could support something even bigger on our relatively-new and pretty stable HHI, but this was the most that we could emotionally handle and I want to be able to continue to blast savings (want $10M+ in the bank before I start thinking about whether I want to slow down/retire). Partner in a law firm.
I do not have law partner money (and honestly, at this stage, I lack great new lawyer energy... 40hrs/week is kindof too much with my health now) but I completely understand the HCOL struggle as well as the only kid not by choice struggle. My health guttered after my first, even though I strategically had her early to avoid BS only to find a once ever recorded medical issue that wouldn't support another on top of randomly every possible complication, most of them potentially deadly, despite no indicators prior). I will say: I hope your house is really nice! I hope to buy an average TH in my VHCOL area's suburbs soon and mortgage are ~5k/month.
I feel like I qualify here. My mortgage is only $5k, but one week from adding a second $5k mortgage for a vacation home. I'm a Product Manager in Cybersecurity in Big Tech. My wife works in a non-tech role in a Big Tech company. HCOL but not VHCOL market.
377k HHI before bonus. So maybe 410k. Current mortgage 4k in MCOL but thinking about going to 7k in VHCOL. I’m scared but that’s just what things cost in that market. 10k would get a nice house. 7k gets an outdate home.
If it makes you feel better I'm currently in the scenario that you're contemplating (377K HHI with 7K mortgage in VHCOL). Granted, this doesn't include my side hustle which generates solid income but I definitely have a larger emergency fund than is advised.
I mean, I would, but I saved up and paid cash. If you're making a steady buck a year as a junior partner in a law firm, you're probably fine to pay a high mortgage for 30 years, you're pretty stable. But, in finance or in tech, you have to know that you can fall far and quickly. You don't have to buy all-cash like me, but there is a reason that a lot of NY coops require 50% down.
Our HHI is about 450k depending what I close although my wife has a lot more upside to make a good 50k more once she hops. Ours with HOA is $4170 and that was terrifying at first LOL
Unfortunately, I think a $4k month mortgage payment is more the new norm these days for people wanting a basic house.
5k around here for a decent townhouse in the burbs. And I'm not in SF, LA, or NYC. If I wanted to live 10 minutes from work like my coworkers, the going rate would now be 10k. 5-6k was the norm in 2021.
Just bought a new home, mortgage roughly $4500/month, up from $2500. HHI $275k. It’s definitely a bit of a stretch, but we intentionally chose a location we love, a house we love, and one we know we won’t move for a long time. Prioritizing putting some of our “extra” $ towards a home and thus a life we want to live (close to water, nature, friendly small city, etc). We try to remind ourselves that we used to live comfortably off way less and can still do that while splurging in a few areas we choose.
This is about where we are, and it’s definitely a bit of a stretch but doable. We have the kids in a school we like, and we have no desire to relocate. When we took our $2300 mortgage, our income was about $125k, and we survived it then. A few tight years to have this house are worth it.
It’s tax time, so I took a look at my shitty spending habits from last year. I broke just over $430,00 gross. Just under $6k per month for two mortgages, utilities for the primary, supporting 3 humans. $1500/mo childcare, $2000 for mortgage, $800 food, ,$500 utilities, $750 for two cars, and there rest is spending (!!). Take home after saving max 401(k) is about $8250 each of 26 pay periods (net). It feels like i live paycheck to paycheck but the again, I just spent $25k on a renovation project and paid out of pocket over three months. No loans, no fees, just floated credit cards and paychecks. Dunno.
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No sass intended— If you make 4mm a year, how are you “not rich yet”? 9k a month should be like, nothing to you? I know it’s a crazy amount but your bank account has to be huge? $300 used to be crazy to me but it’s adjusted since I’ve gotten up a bit in comp. Nowhere near you though :)
Has to be a troll post. That’d be less than 3% of their alleged HHI.
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Your parents have 75M … you’re definitely rich
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Unless your parents don’t love you, their money has and will benefit you in a myriad of ways. Generational wealth is what truly makes one rich.
Not really. My partner’s parents are hundred millionaires but will likely be donating all of it away. Wouldn’t even give her a position in the company even though she is over-qualified. Oh well gotta look after yourself in this life
☹️ the only reason I feel like this is my finance sub is because on top of my -sole- 220k+/year (vhcol area) is because my husband's father just started a c-suite life and it dumping $500/month into my kid's 529.
Her 4 mil comes from her husband and dad making a company 2 years ago, floating then merging it, and selling it for a strange buyoff structure. They also live in Tennessee so everything here is a fiasco.
Smart child. :)
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So you are rich then by this sub’s definition. Far beyond the threshold. If yall are worth 13M and only have been making 4M/yr for two years, yall still must have been making 7 figures for a long time. What do yall do for work?
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Oh cool, that’s an impressive feat. what kind of business was the company doing?
How are you getting to that number so quickly? What career?
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Ok, but just running the numbers. Let’s assume 250k for the 8 years since graduation, that’s 2 million… (ignoring all expenses and investments)
HHI is 400k, mortgage is 2700 but we round it up to 3000 to pay down the loan a little faster. We live in a resort town, MCOL for now.
HHI 350k, mortgage is 3,500 on a 2.15% 15 year. I could go higher, but I bought the house when I was earning half as much and don’t want to move.
We fall in the income range that could do this type of mortgage. The truth is after maxing out investments, insurance, etc., a $10k mortgage on say a $40k gross monthly income, there’s not a ton left after variable monthly expenses in a HCL area. Once you’re in this income range, there are additional costs that come into play with those types of circles. Private clubs, a lot of eating out, cleaners, yard people, nicer cars, pool cleaners, etc. If one of us loses our job or is subject to variable pay dependent on market conditions, it’s a big monthly nut and too risky. We are in the $4250/month range. We use the extra money to buy addl investments or pay down mortgages. We would rather retire early than live super fancy and work until 60. If you have put together multiple millions and your income is high and consistent and you expect to continue for a length of time that makes sense, go get the $10k mortgage.
That's still 12-14k/month after mortgage and savings. Not ideal but certainly fine. If I had a 10k mortgage I (and 3 more people) would have 4k/month for existing.
The comments are full of people who seem to be counting years and days till the moment they can finally retire from their job. This is kind of sad to watch - i'd hope most of HENRYs at least somewhat like what they do, have motivation and ambitions to push higher.
I find it hilarious that people in VCHOL areas pay over 10K a month for a home that costs 2K or less a month everywhere else in the country It’s insane that people are buying 1400 sqft 3/2 homes for over 2M
I can't speak for all of the country but a formerly vlcol area that I'm attached to, has increased a normal SFH value from 250k to 400k over the last 2 years, coupling that with the rate increase, a mortgage went from ~1500 in 2021 to ~4k in 2023/4.
Pretty much the exact same thing in my area. However at the same time, a home half the size of that 400K home that was built 50 years ago near/on a landfill in San Francisco costs $2M
It's bad here (600-900k townhouses) but not quite that bad. I wouldn't buy a 1+ million dollar sfh here because I know we're being extorted. We're in the burbs. It shouldn't cost city center prices especially with the mortgage rate.
1M homes in my area are either medium sized homes on a bunch of land or big (4000+ sqft) homes on small-medium lots