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Comment by dheera | Hacker News Reader

Unfortunately housing prices are rising so fast that saving for years doesn't necessarily get you there, unless median income is close to ~1M by my back-of-envelope calculations, which include:

- taxes (1M is close to 500K after taxes)

- money that you need to cut out and put into retirement to sustain yourself from age 65-100

- living expenses and rent until you buy

- real estate prices rising the whole time

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Which is why taking on debt to buy property is often a good option - you lock in prices, then they rise. Where I live, house prices double in value every ten years, quite reliably. Recently, it's been faster. In ten years, you're paying rent on a $2m property while someone else is paying down a $500-800k loan (using your example figure).

    > Unfortunately housing prices are rising so fast that saving for years doesn't necessarily get you there

Where? In many, many highly developed countries this isn't true.

    > 1M is close to 500K after taxes

Woah. Where do you live where effective income tax rates are 50% for 1M+? Please don't confuse marginal ("headline") vs effective ("actual") tax rates.

In San Francisco if you make $1M as a W-2 employee your marginal tax rate is ~53% and your effective tax rate is ~47%.

If you make $1M on your own the rates are even higher.

(That's not including the 10% sales tax you pay on almost everything you buy with the money you have left, property taxes on property you thought you owned, property taxes landlords financially pass onto you as a renter, etc.)

Property taxes are the only thing in California that are pretty mellow given prop 13. Well, unless the property was just turned over.

Don't worry, the home prices in SF are still much cheaper than Sydney or Hongkong.

> living expenses and rent until you buy

Which will of course be stratospheric in a world where median labor costs $500 per hour.

> sustain yourself from age 65-100

Fortunately my life expectancy has dropped in the past few years!

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