$60-100k salary is not enough to support a family and retire; it's probably not enough to for a single person to make meaningful progress towards retirement because at that level of pay home ownership is constantly out of reach and inflation outpaces wage growth. It's sacrificing your life so someone else can get rich.

In today's environment, home prices really seem to be getting nuts.

As I said, anyone in software is likely making over $100K. A $500K house with 20% down would have a P&I payment of $2,715 / month (plus taxes/insurance.) That's less than $33K / year. (I bought my first house for $155K making $55K / year, and my second house for $390K making $100K.) If you're making over $100K, and spending under a third of it on housing, you should be able to afford to live, unless you're careless with your money.

I don't think I'm making any sacrifices in my life, because I don't think of the things you can overspend on as sacrifices. As I said, I eat well (at home and at restaurants), I travel, I have great technology / toys. And at 44 I have a 7 figure net worth. Because I'm still spending under $65K USD / year, I could likely live off investments in a few more years, though being in software, it's easy to continue contracting on my own terms and having extra money.

$100k for a down payment - how many years of saving does that take and what happens to that $500k price tag during those years of saving? One hardship like a medical issue, a setback in employment, or a child you weren't ready for, then what? And I'm not sure you could find a one bedroom, one bathroom for $500k in a city with tech jobs.

In places where houses are $500K, rent is probably $2000 / month. (More like $1200 - 5000 / month, but depending on the size, location, amenities, luxuriousness of fixtures, etc.) If you make barely $100K, and are spending $24K on rent, let's say you spend half of the rest on living. That leaves you with $38K savings per year. So it takes you 32 months to save up $100K for a down payment.

The secret is don't spend all of the money you make. Well it's not a secret, but it's also not "normal." It's culturally normal to spend all of your money, and then wonder why you can't build up savings. But if you're a software engineer with an income of 6 figures, you really should be able to figure out how to live a good life without spending every last dollar.

Does this $100K/yr earner pay no income taxes and FICA somehow?

You forgot taxes. $38k - $27k in taxes = $11k savings. So 9 years to save up, by which time housing inflation will have taken the price to ~$700k. You are then $40k short for the down payment.

Do you know a lot of software engineers that barely make $100k?

That's why I'm not getting caught up in the particulars of this example.

There are many people in software that are making under $100k

Anyone working in in a government position, or for a state university, or for a nonprofit is probably not earning $100k except maybe in high COL areas or those with quite senior positions.

In Europe frontend is about 60k annually.

Don't you think it's interesting that you forgot taxes and how dramatically that skews the example?

Think about people earning $50k - $100k. 37 million households in the US. Another 34 million households earn less. 128 million households in America total.[1]

12, give or take 2, years into professional life, you have the privilege of signing a 30-year note and cashing out all of your savings. Wages and cost of living won't be constant, but that's basically the optimistic case. Working 42 years to retire on one paid off mortgage.

I think owning one basic shelter should be more accessible than that.

[1] https://www.statista.com/statistics/203183/percentage-distri...

To be sure if we want an example with someone making $80k after tax, we should really not be looking at houses above $400k. Yes, home prices are nuts, as I observed, but no one should be spending 5x gross income and 6.25x net income on housing.

In my own life, I spent about 2.5x gross income for both of my home purchases. And they were arguably more home than I needed. When I bought my first house, I was single, and I rented out the two other bedrooms. My spouse and I bought a house together, but ultimately could not have children, so the house is too big. (We also live on an acre and have a lot to maintain.) Now I know these Philly suburbs are nothing compared to California real estate, but it's still a medium to high cost of living area compared to the rest of the country, where we're minutes away from any kind of shopping or entertainment we'd want, and 45 minutes from the large international airport.

For sure the rising housing costs make it even harder for households making less than the median. I never argued otherwise. My point was about that which started this thread, that there is "no option" but to work for a big, awful tech company. I disagree, and elevated housing costs don't change that.

I've been stuck making $60K for 15+ years.

It took me about five years to save my down payment. I lived very frugally, don't have a wife, don't have a kid, I paid less than $20k on note for each of my cars, and do not have college debt. I'd say it's fairly difficult if you start moving any of the knobs I minimized or set to zero above. Even then, after my down payment money was tight for the first year because it was everything I had.

I got a mortgage similar to what OP mentioned but I have a veterans home loan. Most people I know don't have one of those, so their mortgage that was gotten at the same time as mine is closer to $4k/m.

So you are a both a bit of an exception nowadays with no family and no debt.

I'm largely an exception, yes

Home rates are closer to 8%. The redfin calculator puts a $490k home near me at just under $3200/mo with 20% down.

So over $36k a year. I'm in Washington, so no income tax. Let's say $100k income, single person. No pre tax deductions and you'll be bringing home $6200/mo. So over 50% of your take home goes to mortgage alone.

In your example, your home prices were roughly 3x-4x your annual income. Compared to your example of prices being 5x.

Why on earth would a single person buy a 490k house? Everyone I know either had roommates, an inheritance, or make enough it’s a trivial expense.

Also don’t forget about the home mortgage tax deduction, that plus inflation really impacts the cost of home ownership.

[delayed]

70 miles from the downtown of a major city is still generally considered part of that city’s metropolitan area and prices reflect that. Still though getting a 1br condo in LA for 150-300k is more reflective of what it actually costs to get an affordable place as a single person in that area. Yes you have condo fees, but maintain a house comes with serious costs as well.

That’s the thing, if it’s a trivial expense then who cares, but when there’s more affordable options it’s hard to imagine why stretching yourself buying a house at that price would be a good idea.

255k for a 1,952 square foot place in Harrisonburg, VA 22802 is far more representative of most of the US’s housing prices. It’s a modest 50k population university town 130 miles from DC so not in the middle of nowhere but still cheap. https://www.redfin.com/VA/Harrisonburg/1036-Meadowlark-Dr-22... Plenty of places listed for less than that or far more, but in general there’s still a lot of options under 300k.

>getting a 1br condo in LA for 150-300k is more reflective of what it actually costs to get an affordable place as a single person in that area.

A house is a multi decade investment. Why would I buy a single shack if I want to perhaps have a family one day? Especially in this market? I don't want to own a house for the sake of ownership.

And yes, like anything else in life, you have super cheap deals and super expensive. I was using a very rough median pricing. Especially since the lowest cost houses likely mean you need to do the most work on it. I'm not a carpenter nor a house flipper, so that's not of interest to me (and I imagine many other people in tech).

Median pricing downtown is 1m for 2 Bed/bath. I feel the cost going down to 40-50% for going beyond what is considered LA county (which is huge, but not a 70 mile radius) seems to make sense. I suppose you can keep looking northeast towards Death Valley and find something at 200-300k, but you're legitimately getting towards food desert[1] area at that point. The high desert area is already pretty rural as is, unless you are a true hermit (or a stargazer) I can't imagine going further out and making it a 20+ mile drive to any and everything.

[1] https://en.m.wikipedia.org/wiki/Food_desert

That phrase only refers to the distance from you to a grocery store. So, no you don’t need to enter food desert territory when you buy a house in one of the many smaller CA cities/towns.

Anyway, buying a house can be an investment but living in a larger one than you need is wasting a productive asset. If you have a 4 bedroom house you can rent out for 4k/month then living in it is costing you 4k/month the same way renting a place for 4k would be. There’s nothing inherently wrong with buying an investment house, but you shouldn’t be out anywhere close to the full monthly cost.

[delayed]

> I don’t really consider an extra room a waste.

By waste I simply mean it’s consumptive. It’s obvious when you’re spending well above the norm on rent, but it doesn’t slap you in the face in the same way when buying a larger house.

If you bought in the past, you made it. That doesn't help the current generation.

Hundred year-old teardowns are two million in our neighborhood. 60+ y-o condos are $800k. Redfin est payment/mo: $5,974. Just the property tax and HOA fee is over $1,000 a month.

>I eat well (at home and at restaurants), I travel, I have great technology / toys. And at 44 I have a 7 figure net worth.

You clearly don't have kids. and/or a spouse that depends on your income. The former drains your money very quickly, especially if you need services like daycare (if your spouse isn't a full time parent... so we're back to one income to support a family of 3+) or perhaps invest in private school. I wouldn't call either of those "overspending" depending on the area. And nowadays you may need to invest in a 529 for that kid's college...

It's already hard raising a kid badly. Raising one well is expensive.

>A $500K house with 20% down

how are you saving 100k on a 100k salary, on top of other savings for rainy days? do you just save for 5-10 years by throwing 20% into a savings account, on top of rent/utilities and other stuff?

Even then, the hard part is getting approved for the sale. The market right now is just absurd. Even if you can comfortably pay mortgage you may be outbid by some family or other person who simply buys the house in cash. You really can't keep up.

Median household income in the US is $71k.

I live in Toronto. The lowest I've seen for a job listing at a tech-oriented small company was 90k on the low end(the job listing was 90k-120k), and this was for someone with 2 years experience. I've never seen a tech or tech-adjacent company offer 60k for even new grads. Most small companies I've seen offer for someone with 5+ years of solid experience a minimum of 120k USD. These are for remote jobs.

So you say a salary above the median salary is not enough? This raises a big question of how is half the population in the country getting by.

« Retire early » is the main part you’re missing from their argument, that implies saving large portions of disposable income. I always feel sad when people have high paying jobs they hate just so that « retire early » though, in a field like software engineering you can find a happy medium I feel like.

The happy medium for me would be working less than 20 hours per week. It's not about the work but about how much time it consumes. And part time software engineering jobs don't seem to exist... I would happily live on half my income for half my hours. But if retiring early is more realistic than that (and it seems to be), I'll take it.

It's possible much later in career when you establish yourself in a certain domain. You become valuable enough that you working half the time (or even just consulting) is more valuable than 2 other employees.

But people who can do that are also probably in positions to retire early already. Either with PhD's and 10+ years working on some now-extremely-valuable tech (think AI if you worked on it in the 2010's, or data science in the 00's) or some otherwise reputable name in their industry.

I've been very confused about how people are getting by.

If they're not in tech, and and they're not a member of the professional class (doctor, lawyer, etc), how are they doing it?

Is everyone working two jobs and doing uber on top of that, or what? How much of a bubble am I in? I'm in tech and I feel like I'm barely making it.

Middle class has been and continues to being squished and crushed, things are getting worse and worse if you haven’t noticed. And it’s not just in the US, but also other western economies such as Germany, France, UK, etc.

I wonder the same thing. I suspect that the answer is they carry a lot of debt that they never really expect to pay off.

Roommates, living with parents. A decade+ past when earlier generations moved to their own homes.

Well, not being able to retire at 60-100k is such an US problem... It is enough to easily retirely at whatever the legal retirement age is, earlier if I include all tue benefits my boring big corp job and collectively bargained salary provide.

You can always lower your standard of living, sure. But that's a different conversation IMO.

I guess technically that's a choice, but it's so bad in the long term I personally can't consider it valid.

Can you elaborate?

As I've never raised my standard of living to spending over $100K / year, I don't exactly know what I'm missing.

I think more to your point, yes there is a choice - to make $500K at a "big bad tech company" and then spend like there's no tomorrow on things that you feel are worth spending all that money on, hoping that it makes up for the 40 hours you spend working (and maybe hating?) Or you enjoy your 40 hour job, make less, spend less. But spending money doesn't have a direct and equal correlation with life satisfaction. I spend about $65K / year (for two people, no kids), and I feel like I have an amazing life, and spending a bunch more money would, at best, have small incremental returns on life satisfaction.

Of course!

I have also never raised my spending to anything close to that. Nor I have the choice of making $500k (I wish).

When I mention standard of living I don't mean spending like crazy. I mean not having to constantly worry that if you lose your job you can't make your mortgage in a few months.

I save around 50% of my salary and I'd save even more if I didn't have a kid and wasn't the sole provider in my home right now. Not because I wouldn't love to be living like a king, but because for me that's the only option I have to afford a life long term.

What if I die? What if I get hurt and can't work anymore? What if me or my wife gets sick and we can't treat it with the limited free healthcare we have access to?

Even barring that. I absolutely hate that I have to give away the prime hours of my day to ensure me and my family can simply survive. I don't want to do that forever. I'd much rather use all I know to build software that actually makes a difference. Read more, experience life more. Travel at least once in my life. Enjoy life while I'm not declining physically and mentally.

I could definitely earn less and live a less stressful life in a better company if I wanted to. But that's the kind of decision that will most likely come back to haunt me and my family in the long term.

Maybe I get very lucky and none of those things happen, and all the time I suffered through those soulless jobs was not needed. But in my view that's a risk I'm willing to take.

To your point, if you are talking about simply getting all that extra money and spend it all without a care, I agree. That's a choice but one I don't have the same sympathy for.

Living below your means (whatever that is) is a very good thing, not a bad thing.

Being stuck on an expenses ~= income treadmill is what sucks.

Living below your means is separated from your standard of living.

In a better world everyone should be able to live well without having to sacrifice as much.

Somehow we've convinced ourselves that it's always the individual's fault when they have to live with a worse standard of living to maybe retire one day.

It’s the individual’s wise choice (not fault) when they do that, IMO.

I agree with you regarding the means of living but that's not what I said.

Accepting that you will have to work until you die is lowering your standard of living. So is accepting that any emergency can bankrupt you or that you will never be able to travel, and so on.

For some reason people are conflating standards of living with irresponsible spending.