How do you pay rent/mortgage in the bay?
Let’s say you buy a house for 2M. After 400k down you have a 1.6M mortgage. With escrow your cost is about $10k/mo. You make 200-300k/yr as a Sr IC. Maybe you have 100k in equity per year vesting. After taxes, espp, 401k, medical, you take home between 8-12k/month. How do you pay the mortgage and still live? Is everyone paying all their vesting equity into houses? And what is your contingency if the stock market or housing market has a rough year?
Everyone is not buying 2M houses. Ppl with 300k can't afford 2M house(with above stats). People with 2M homes earn 500-700k a year(as a couple may be). Rest stay in sub million homes.
My household income is about $300k and I’m looking to spend no more the $500k
Fancy houses and cars are one way to work these high paying, high burnout jobs till your 60. Be smart
Hey buddy. I'm in this situation. 800k/year household tc. 10k mortgage. I'm not counting equity when doing calculation for monthly expenses. Personal goal is to save 1M in 5 year. 200k/year including equity seems doable.
Making $800k tc is much different then $200-300k
I should have clarified. I meant I'm probably the target of op's question. And the tc is probably the answer to op's question of "how"
Don’t count on RSU to afford your house. Or else you’ll get trapped. Only look at base and maybe half of your bonus. You shouldn’t spend more than half of your income on the mortgage
I second this and really you should only look at base as that is what is guaranteed
Unless you want to get into real estate. When I started I owed more than 100% of my income every month so relied on renters. Leverage ftw if you can stomach it and don't have dependents!
My rule is don't buy a house much more than 2x income else it's a stretch. With 300k salary you should not spend more than 600k unless you have a big down payment
Your mortgage should be 3x your TC; yours is 4. Save more down payment before buying a house that expensive.
2x. 3 is a stretch in my opinion.
2x in the bay area is next to impossible.
Don't have to pay a mortgage if you don't finance the house. Just saying.
Your math doesn't add up at all. You make 300 to 400/year. That is 16k to 21.5k a month after taxes. At that level of income your money quickly starts to make money so you have additional money coming in every year as well. You can easily afford a 2m house (if this is a priority lifestyle for you). Bonus: your mortgage is now fixed and your property taxes cannot grow more than 2% a year (assuming CA) and yet your income continues to grow. 6k for starters is plenty to "live" on especially if single.
How is your income growing?
1) you are getting raises and or promotions and 2) your investments are growing and/or paying dividends. Hell even if you only save cash you are getting 2.25% interest these days. The whole point of working is to cover the gap until your passive income meets your desired yearly expenses right? So even if you never get another raise you should be taking home more and more money every year.
Easy. You don’t buy a 2M house on that salary.
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