Mid 20s single male, 300k TC, ~1.1m NW (250k retirement accounts, 800k tech stocks/ETFs, 70k cash, 20k crypto).
I don't mind continuing to rent because I like the low overhead and I'm making decent gains on investments. But it would be nice to have a permanent place, and to grab property in an attractive location before it's all gone/priced out. Ideally I'd be living in the house with friends as roommates/tenants.
Job is fully remote so I can move anywhere in the US, but targeting Seattle or Austin. Are these still good locations to buy right now? Feels bad not having bought a year or two ago. I don't foresee prices falling though.
Does $1m sound reasonable? That would mean I'd have to sell about $130k of stock to pay for the down payment, which feels bad (paying taxes). How do people normally liquidate for a down payment?
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In terms of down payment, if you are comfortable with it you could take out margin from your tech stocks. This way you don’t pay capital gains, get to keep your stocks, and get a low interest on margin while at the same time increasing your net worth with the home purchase.
If not, you could use this time to accumulate your stocks (sell when you get them so you don’t have cap gains) and store as cash in a money market. When you have enough for a down payment the housing market might be lower allowing you to buy at bargain prices.
Truth is no one knows what will happen in markers. So make a decision that aligns with your values. If you’re ready to buy then don’t listen to me, just sell your stocks, buy your home and be happy.
My wife works for Google and they approached it the same way. No change to pay in WA state, and also no change to CA or TX or other state pay.
So while it may have some technical impact on the amount all employees see, it had no impact on the amount for WA vs TX employees, which is the discussion here.
Nothing similar happened with LTC, but the alternative insurance offered was like 0.05% of pay.
LTC is already higher at 0.58%, and if you don't opt-out this year, you'll have to pay it forever on any job in WA.
In December 2018, WA didn't have FLI or LTC. Now next year in 2022, the "not income tax" in WA will already be 0.98%; how long until 2% and then some? LTC already has provisions for automatic raises to keep the fund solvent.
Home ownership only is smart in a market where the price goes up by >12%/year, otherwise you'll make more money in other ways.
Renting doesn't allow you to really invest in where you live, have a sense of community greater than your lease, stability for your children, etc.
These things are actually worth a lot of money, and you should try living where you'd like to be.
Your other point is a better one: real estate is less liquid than stocks. One might subjectively value an asset higher or lower based on liquidity needs.
But a smart move would be to refinance when possible to maintain your leverage, and cashing out the “increase” in home value to invest elsewhere