Should I buy a house, and if so how much should I spend?

[KrazyHorse]

Serious response: Don't go for the multimillion dollar house and instead just get a 4 bedroom in a nice middle class area with good schools. Invest the rest and think real hard about buying a few rental properties with the money you save. As PChang said it isn't what you make but what you save which matters.

Thanks

Last year, of what I earned 25% went to spending, 40% to saving and 35% to the tax man - i.e. I saved close to 60% of each paycheck.

Buying a 2MM place would take me to 35% saving

[Dinner]

Well, good for you but it still would be frivolous spending IMHO. The question you should be asking yourself is what you need not what you want or can afford. The less you spend on frivolity the more you have for wealth accumulation. I, personally, like Warren Buffet's example of owning the same middle class house for 50 years as over time those extra costs add up to real lost opportunity costs. My goal is to live well, a nice middle class lifestyle, and then when I die have people say "I had no idea he was able to save so much money". I'm a cheap ****er though and still buy my suits at discount places rather than pay for designer labels just because I can. My one austintation is my car, I am a Californian after all, but I still strictly limit that to just a luxury brand but a cheaper model of the brand. If I was as cheap as my dad I'd be driving a Camry when I could afford much better but the Scottish panache for thriftiness isn't that strong in me even if it is strong.

[Wiglaf]

Thanks

Last year, of what I earned 25% went to spending, 40% to saving and 35% to the tax man - i.e. I saved close to 60% of each paycheck.

Buying a 2MM place would take me to 35% saving

I'm sorry do you earn more than $1 million a year? Otherwise, the math is not functional.

[KrazyHorse]

If your goal is to live a middle class lifestyle for the rest of your life then why CT?

My goal is to retire rich (8 figures) at 50. I COULD retire in my late 30s and be middle class.

[KrazyHorse]

I'm sorry Wiggy but I've done the math. The additional outlay would be approximately the mortgage interest and property taxes less my current rent. And some or all of the former is tax deductible while the latter is not.

[-Jrabbit]

Seems strange to me that you would build a statue of him in Switzerland, but he was a cool guy

Mercury was a huge fan of Montreux (with good reason, as it is a freaking awesome place), owned a home and a recording studio there, spent his final days and died there.

[pchang]

Everyone knows that public corporations will better deal employees in a heartbeat if given the chance. Might as well do the same to them.

[MRT144]

My goal is to retire rich (8 figures) at 50. I COULD retire in my late 30s and be middle class.

Whoops.

But why CT as a place to set down? Have you fallen in love with the place?

[KrazyHorse]

Why does a bank robber rob banks?

I'm retiring to florida/carib when the time comes

[MRT144]

Why does a bank robber rob banks?

I'm retiring to florida/carib when the time comes

Because they couldnt get a job at an investment bank?

[KrazyHorse]

http://en.wikipedia.org/wiki/Willie_Sutton

[Pekka]

I don't understand US housing market so my contribution is slim to none. In here, I'd say it's not worth it. Renting is expensive but buying is also expensive and peopel are buying less (difficult to actually sell anything above 500k). We built our house. But we had 3 big advantages: 1) we got good land easy, 2) my dad is a builder so he built the house (manual labor part) for free (and got great deals from his friends to do land work, plumbing, almost free, 3) I work for a bank and my benefit is mortgage without interest.

So, we saved 100k at least in the building process and got the house we wanted, it was jstu a lot of work and with the great mortgage benefits, we saved like another 50-100k. SO we beefed it up for a value and our house is at least 200k more valuable than we paid to build it and the land value has gone up as well. Does not matter though, we jsut want ot live here. This would not be a great investment because peopel aren't buying (people are getting poorer here ATM), so the only thing that really matters for us is that we want to live here for the long term, which we do, and that we can handle our mortgage, which we hope we can do (I'm on a LONG sick leave). We can sell, but I want my kids to grow up in this neighbourhood and house. In that sense, the investment definitely is worth it. If I get back to work and stay healthy, I can pay this in full in the next 8 to 10 years.

[ricketyclik]

Serious response: Don't go for the multimillion dollar house and instead just get a 4 bedroom in a nice middle class area with good schools. Invest the rest and think real hard about buying a few rental properties with the money you save. As PChang said it isn't what you make but what you save which matters.

This.

[Kidlicious]

KH is too smart to rent out. But if he wants to retire soon idk why he would spend so much money.

[ricketyclik]

Admittedly I'm basing my comment on the Australian context where investment properties get ridiculous tax concessions.