Related to this thread ([Blind] Check out this post! Rely on stocks to pay mortgage? (Housing) https://us.teamblind.com/s/D3ZkAk3P) I'm trying to understand how people are paying their mortgage on 2 million + houses here. Based on redfin calculator, for a 2 million house, mortgage + P&I can be between 9k-12k depending on down payment and rate. Here's why I'm scratching my head: My household TC: >$800k Net household monthly base salary income after taxes (~22k) We aren't touching RSUs, so to pay on a 2 million house we'd be putting approx half our base salary into mortgage/p&I(!) When we have kids, the wife may step out of career temporarily or permanently (would bring TC down to ~450. This means (assuming minimal base salary growth), nearly all my base salary goes to mortgage/p&I. Entertainment, food, childcare, travel car etc expense all starts dipping into RSUs. How are you saving anything meaningful for retirement (other than counting on RSUs)? Im seeing people with 350-450 TC talking about getting 1.8 million plus homes and feel like I'm missing something, or is it the case that many use their RSUs like cash to cover expenses? Even so, seems like a lot of house poor people.
You answered your own question; People use their RSUs
If you had sold 60k in Google RSUs over last 10 years to pay part of mortgage, would your home equity gains outpace if you had just held that 600k? (I know it's been wild markets and RE so honestly curious)
You buy a house when you need a house for the space, school etc. You can buy Google stock with salary too instead of paying the mortgage. Not sure why you are distinguishing between base salary and RSU - both are cash.
Sell your RSU’s.
We bought a house that we can afford with just our base salaries. If you're uncomfortable with selling stocks to afford your mortgage, maybe consider lowering your budget.
Yea, that's reasonable, and I agree with your approach which is why I'm perplexed. I see a few say they are paying with base salary which means some are clearing 500k+ base, pretty crazy.
You spend $12k a month on food and entertainment?
No, with us both working we would still have probably 8k month from base salary left over to invest after those expenses. Just seems low given our TC.
8k savings seems decent imo, that’s most Americans dream salary
Personally I would only spend as much as can be covered by 1/2 of one paycheck. When I was buying the realtor told me I could afford a 1.8 million house with a 7k payment but if my spouse or I lost my job we’d be in a tough spot. We went with a 1.3 million house and the mortgage is 4K which we can afford on a combined income of 550k
Smart
How on the earth : 1.8m has 7 k Mortage and 1.3m has 4K. How much your downpayment, intuit ??
If you don’t touch RSU, they are not your money. Then, what’s the reason to include them as TC?
???. They are in my brokerage account I can cash out at anytime (as can she). The risk is the opportunity cost of spending them on an inflated house price versus letting them appreciate tax free until retirement.
Tax free?
What’s the reason for holding doordash instead of selling immediately and buying dogecoin?
If anything I would sell them to buy BAT 😂
People save up and have money from parents. No one said you have to take out a mortgage of that size
When we bought in the Seattle area (single earner mostly, wife works off and on) our goal was to keep mortgage < 60% of my take home pay (base only). Luckily Microsoft doesn't have a base cap, so it's not too shabby.
RSUs *are* like cash if you work for a public company. What's the difference between using those and using your base salary?
Could be my unique scenario, but I've realized from previous RSUs at other companies when I sold them for other purposes that I ended up leaving a LOT on the table (way more than RE appreciation) so I'm a bit gun shy to sell now.
OP... Your cash and RSU... Treat them same.