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Comment by CountDrewku | Hacker News Reader

It's possible to live a very comfortable lifestyle and save a lot if you're not consumed by the idea that you need to live in SF or NY to enjoy your life. I always see these stories about how it's impossible for millenials to own a house etc. I bought my first house at 24 and sold it for 80k profit 5 years later, paid off my student loans. I'm on my second house now and it's appreciated considerably in the last few years. Both houses were below 250k with and over 1400 sqft. My wife and I have pretty modest incomes and only bring in about 100k a year together.

While there are certainly things I would like to buy that I cannot afford I can buy most of the things I enjoy when I want to without having to worry and still save a lot for retirement.

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You bought your first house at the absolute bottom of the real estate market following a global crash, sold it at a profit, and bought another house during what continues to be a rapidly appreciating market.

Would a 24 year old today in the same financial position you were in at 24 be able to afford that same first house?

You applying this personal anecdote as some kind of geometric proof that living outside a major city is a pathway to simple financial independence is to me a bold-print example of how the very same people who had to fight their way up the ladder of success will promptly become oblivious to the fact that the rungs are becoming further and further apart every year, advising those behind them that "climbing it isn't that difficult, just try as hard as I did."

I don't want to poopoo on your point about you and your wife having "pretty modest incomes" at about 100k together.

However the median household income is only $68k a year[0]. That is 50% of households in the US earned less than 68k/year. You're actually in the top 30%[1] of US households if your income is about 100k together.

I wouldn't call that modest by any stretch of the imagination.

[0] https://www.census.gov/library/publications/2020/demo/p60-27...

[1] https://www.ibisworld.com/us/bed/households-earning-more-tha...

The median income is brought down by two factors: 1) people completely out of the workforce (the labor force non-participation rate is nearly 40%), and 2) single-earner households. Neither of these are relevant to what we'd expect to be "reasonable" or "modest" for a married, employed couple.

$100k/year for two full-time workers is $25/hour. This is a pretty reasonable wage for someone with a modicum of stability and employment consistency. For example Bank of America tellers now start at $20/hour and move to $25 in a few years.[1]

[1]https://www.usatoday.com/story/money/2021/05/18/bank-america...

I hate to be the person to quibble about the semantics of words but when one says the word modest one doesn't usually imagine a situation that is more than 70% of all others.

I agree, it's a reasonable expectation that two people working should have a lifestyle that something like 100k/year would support.

That being reasonable doesn't change the fact that it's still more than what 70% of other situations get, regardless of how those situations came about.

If you want to compare that on an individual level then it's still not modest. The median Individual income is only 36k/year. Even on an individual level they're still doing better than 70% of the population on that level.

Yes, it's possible to be comfortable and live a nice life no in NYC or SF. But let's not delude ourselves into thinking that just because it's reasonable to expect that level of income for a household, that it's modest, or even the norm.

Imagine a world in which everyone has exactly the same income and the same expenses, saves up the same amount of money for retirement, and lives exactly the same amount of time.

In that world, someone just about to retire would in one sense be somewhere in the top 1-2% of wealth holders and in another sense be exactly average (and median, and mode), as regards their consumption patterns.

The point being, lifecycle effects matter a _lot_. In the US, ~17% of the population is 65+ (not all of them retired, of course, but many retired and living partially off their savings) and ~6% of the population are college students. Let's assume that "individual income" does not include children (though it might, depending on how it's measured. It certainly includes various people who only work part-time, but let's ignore that. If we assume that college students and retirees are all below-median (not entirely true, but no worse than the other assumptions we just made), 70th percentile of individual income is something like 60th percentile of "income of non-students and non-retirees".

> That being reasonable doesn't change the fact that it's still more than what 70% of other situations get

The point is, if you look at actual consumption (as in, how people actually live), not everyone's consumption comes entirely from income. So it's extremely misleading to look at incomes and say anything about what people "get".

It's modest for coastal people which is where most of the users on this site are from. This is pretty easy to spot when they're discussing not being able to buy homes for under $600k.

Had you not bought the first house, would you be able to afford you current house on your salary? People who bought houses in the last 10 years were lucky enough to get in when the market was historically low. People currently shopping for there first house are not so lucky.

Exactly.. I couldn't afford to buy before but for a brief window my salary allowed me to buy a home in the area of my city most people were choosing to avoid. I wouldn't qualify the following year and I would be very far off now as my salary did not rise at the same level.

What I see smart young people doing is moving away from bigger cities. They get a decent house / lot compared to a condo in a bigger area.

Every generation has to move further away (or make more than others) if a city is growing. You don't have to live in a growing city.. you could move to a declining area or a neutral area. There are advantages to living in a declining city.

> Every generation has to move further away (or make more than others) if a city is growing

I mean... maybe to some extent, but ultimately not really. Growing cities becoming unaffordable is a result of our choices. We can make different choices.

https://medium.com/land-buildings-identity-and-values/what-i...

I don't know why but people love the idea of scarcity and exclusivity. If we had a star trek like post scarcity society in 2031 and transported people from 2021 to it they would try and figure out how to reintroduce scarcity back into the system.

that's kind of a weird strawman. I don't think people (in general) love scarcity, but you don't have to think too hard to realize that some desirable things are inherently scarce. even in star trek, there are only so many penthouses with a view of central park.

The market is always "low" in the areas I've lived in. That's my point. My brother also just but a very nice house for 180k. There are plenty of affordable places in this country.

>People who bought houses in the last 10 years were lucky enough to get in when the market was historically low.

You realize those same people also had to deal with a shitty job market and college loans to pay off as soon as they graduated right?

> You realize those same people also had to deal with a shitty job market and college loans to pay off as soon as they graduated right?

I think this is a good point that's worth repeating in these conversations. It's easy to forget in better times, but economic crashes are really scary. The financial crisis scared the shit out of me; my job situation was tenuous and our finances were shaky, but my wife and I took a big gamble and bought a foreclosed house at what turned out to be the bottom of market.

It seems like an obvious choice in hindsight, but it could easily have gone very badly.

Growing up in the midwest prior to working FAANG in the Bay Area, this is my exact experience. With a graduate degree and making ridiculous money, I and my peers had no realistic path to homeownership on any reasonable time-scale in the Bay. Family members working HVAC, plumbing, electrician or other skilled blue-collar jobs in low-cost of living areas bought beautiful craftsman bungalows within walking distance to a decent school for $80K. Professionals with either no student debt or a few thousand from land-grant state university degree paid off in 5-7 years. This has knock-on effects to family formation and number of children. Many of my high school classmates had their first kid at 24-25 and have 3-5 kids now, versus Bay Area average of what seems like 1-2 starting in your late 30s. When you feel like you can finally afford it. I started making plans to leave as soon as I got there, it truly was "structurally hostile to families."

You make a very good point. People dramatically underestimate how much more you need to make in the Bay Area to have the same quality of life as living in low cost of living areas.

Not that this is entirely wrong in principle, but it sounds like you got into the market for a house right around 2009. "Happen to enter the market at the exact bottom of a historic crash" isn't exactly a strategy. It's just luck.

I think it will be fascinating to watch the FIRE movement and the broader trading communities through the next crash. It is easy to feel like a genius when the market is going up 30% in a year.

Im not sure what you expect to see with FIRE? Ill just keep investing through the down-cycle. Dollar cost averaging baby!

I expect a fair number of people who think they've got the guts for this to panic. But more I expect the proliferation of advice to shrink.

There are always people on the margin. Those who barely get by with FIRE will be the ones to go.

why? fire participants are disciplined so they will just invest as usual. what do u expect to see?

> It's just luck.

Well sure, but perhaps also it's just survivorship bias. It sure seems like there is always somebody that just got lucky, no matter what is going on. 10 years from now, there will be a group of people that "just got lucky" with something they did right now.

I guess what I'm saying is that the right attitude is to decide that no matter how terrible everything is and no matter how stacked against you the world is, there is an opportunity - somewhere, somehow.

Oh you mean the same time I graduated into a shitty job market with thousands in college loans?

No, I made smart decisions about purchasing a house in a good low col area and fixed it up.

Honestly, this whole idea that anyone who's achieved some success is just down to luck is pretty disheartening. Do you think this is a good approach to improving your life? I don't see any advantage to thinking this way.

I think it's a perfectly fine approach to life to acknowledge the role played by luck. I don't pretend I'm completely in control and all my success is solely due to my superior grit and intellect (and, of course, even having those traits at all is still just luck). Nonetheless, I've done perfectly fine. My life has improved fairly consistently for about 20 years to the point it is better than I ever reasonably expected it would ever be.

So no, I don't think you need to buy into myths to improve your life. By all means, make the smartest moves you can with the hand you're dealt, but you have absolutely no control over what hand you're dealt. If you got lucky, good for you. Plenty of others got lucky and squandered it. I'm not saying don't feel proud of yourself. But don't forget the many people who never even got the chance. You're not better than them and neither am I.

> superior grit and intellect (and, of course, even having those traits at all is still just luck).

I don't think this is true. Sure, it's trivially true that we don't earn the traits we're born with in any way. But it should be equally obvious that people can and do cultivate these same traits deliberately throughout life. People cultivate grit (i.e., discipline, persistence, courage, etc), and everyone has to fulfill whatever innate intellect they were given with knowledge and experience, which don't come for free.

There's certainly a lot of luck involved all along the way, but labelling it all "just luck" is a pretty broad stroke is it not?

> You're not better than them and neither am I.

"Better" is a heavily loaded term. I suspect you're angling for a "worthy of life, liberty, and the pursuit of happiness" sort of meaning, which is dangerously close to a strawman. But if "better" is given a more specific and practical "better steward of their resources" meaning, then I assure you there are lots people better than me.

Oh boy this so much! I'm fully aware of how lucky I've been. Grit and intellect are pretty much down to luck in choosing your parents.

It's so easy and so natural to look down on other people. Everybody does it, and the best we can do is try to fight against it by having some humility.

I think you might be catching too much flak on this thread but to add to the discussion:

>Oh you mean the same time I graduated into a shitty job market with thousands in college loans?

I think this is actually to the same point. Compare what you stated with someone who, say, graduated in the 1960s where they could have a middle class lifestyle without even graduating college, or if they did graduate, without mountains of debt or relatively high home prices.

Both points can be true. There can still be paths forward while also acknowledging it can be more difficult. Exceptional people will always find a path to success; that's what makes them exceptional. What worries me is when we (as a society) make it exceedingly difficult for large swaths of people to succeed at achieving something as modest as "middle-class".

> and sold it for 80k profit

You seem to miss the issue.

100k is a very high household income for areas with 1400 sqft sub 250k housing.

Also a millennial. Also bought my first house at 24. Sold it 6 years later for a loss of $90k. Timing is important. Not everyone was fortunate to buy at the beginning of a huge bull market and right after a historic crash in real estate prices. (Bought my house in 2006)

> if you're not consumed by the idea that you need to live in SF or NY to enjoy your life

And yet some people enjoy big cities more than they'd enjoy living in a small town and it is not a moral failing or a sign of stupidity or weakness.

Many people enjoy the multiculturalism found in cities, and many immigrants or minorities feel out of place in small towns while major cities offer them the opportunity to connect with people like themselves.

Obviously owning a big residence in a city will never be affordable but as a society we should ensure that people can affordably live where it makes sense for them.

Why bring multiculturalism into it, or minorities feeling out of place? the parent comment never mentioned it, and I have been to small towns that were extremely welcoming to all groups. I agree with his statement, why live somewhere where housing is astronomically expensive, unless you enjoy it so much that living somewhere else would bring you sheer misery, be prepared to either rent forever or hustle your life away to afford that lifestyle.

Because that is one thing i know that people mention a lot in moving to cities. Maybe part of it is american perspective. Is there something WRONG with talking about multiculturalism?

eg. gay people leaving their small towns that don't have other gays, immigrants moving to a city full of people of their nationality (eg. "china towns, little italy").

No amount of "is renting forever not bad?" will rectify this advantage of a city for many people.

Having a preference for multiculturalism is something mostly expressed in the west. People in Nigeria, Iran, Iraq, Peru, India, etc. Live just fine with it without it. They don’t feel inadequate living in a city or village that is monocultural.

Neither is right or wrong. Cities develop over decades and they will have their unique histories. But seldom do people in other places say, oh my town is so monocultural, I wish it were a stew of cultures. No, mostly they are okay with their towns character. Interestingly besides Singapore, we have Beirut, Teheran, Khartoum, Baghdad which have lost multiculturalism over time, but those are mostly due to civil strife caused in part by the different cultures at violent odds with each other.

Cities have always collected people from further outside the local area than suburban or rural areas. If you have lived in cities with a monoculture and cities with significant minorities, the multicultural city has more dynamic options for food, drink, music, everything. New York is one of the only places in the world you could probably walk from fantastic bagels to great Italian food to a real HK-style diner. This is a great privilege that residents of these cities value highly.

Really, I would suggest you read up about Peru. They're one of the more multicultural countries in the Americas, they've got multiculturalism enshrined in their constitution.

They have indigenous, mixed race, Japanese and others, that’s not in dispute. What I’m saying is I’m sure in the hinterlands the locals aren’t saying “oh, woe is us, we aren’t multicultural like those folks in Lima”

Multiculturalism can be good, it can be neutral or like Beirut or Baghdad it can lead to violence. What I’m saying is most people overseas are totally okay with it, with few exceptions, but they don’t bemoan it’s absence.

honestly if they enjoy it that's their call and they make the choice to live in a place that is not affordable. If they struggle due to that decision that is on them. If they could move somewhere else and live in a much more comfortable financial position the long term outcome is their choice. I am not denigrating their decision just saying that it is their decision.

"we should ensure that people can affordably live where it makes sense for them" It makes sense for people to live in an area they can afford, not where they decide they should be able to afford. Its simple economics, supply and demand.

"Many people enjoy the multiculturalism found in cities, and many immigrants or minorities feel out of place in small towns while major cities offer them the opportunity to connect with people like themselves". Not to be rude, but so what? I want to live in Napa Valley but I cant afford it, is it society's job to get me an affordable house there?

The calculus is a bit more complicated than you make it out to be. People have to live where they can afford to live -and- get a job. Many lcol areas do not have many jobs. Especially if you have an expensive education that you are trying to pay off.

Some people might be able to take a pay cut and move somewhere cheap and come out ahead. But those options don't always exist. If you have $200k in student loans and a degree in biotechnology, good luck finding a job within 100 miles of cheap housing. More remote work opportunities might change this, but at least in the past, those were very rare. Housing is expensive in hcol areas for a reason. It's because there are lots of good paying jobs nearby. There is also a reason some areas have very cheap housing.

You make good points but the comment I was responding to was very focused on people choosing to live somewhere based on what they like regarding the social atmosphere and feelings as opposed to economic concerns.

Living in a big city isn't much of a problem, only real difference is that almost all your equity will be in your house / real-estate assets. And that can be just fine - in certain areas the real-estate market has performed as well as the stock market, for the past 20-30 years.

But it's difficult to retire on that - unless you decide to sell your house, and move somewhere cheap.

Heh, I don't understand why you are getting downvoted (well I do, but it's not a charitable interpretation). Yep, totally agree - people are not entitled to buy a house wherever they want. At least before the money printer went brrrrr, housing prices as compared to income in the US (median) were one of the lowest among the developed countries. Even now, median house is $375k [1]. Get out of your bubble.

And I say it from the position of someone who actually made this mistake - I bought in Seattle and regret it. A much better decision would have been to buy a cheaper, better house somewhere else. Still, I'm not going to be mad at people telling me this truth :)

[1] https://fred.stlouisfed.org/series/MSPUS

Lol, now I'm getting silently downvoted. Come on, tell me which specific statement from my post (or the GP post) is false, or non-factual and doesn't contribute to the discussion :D

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