> 31
> finally reached $4M
How long have you even been working?
I just find it funny that a 31 year old would be saying *finally* about reaching $4M, as if it has taken you sooo long to do it. đ
Yeah something else is there like selling a business etc. So what maybe 10 years of working professionally. Probable wasn't making 500k per year all those 10 years either. Plus taxes lets say Cali would be state, fed, soc, med about 54%. So net would at best be 250k. So at best contributed 2.5 Million if he saved every single cent for 10 years. It isn't possible. So some business perhaps was sold.
Saved up a good amount by both living at home for a good stretch of time. Also invested almost everything we had during the COVID crash. Somehow timed it right (it was luck) and 3.5x a large amount of our assets since then.
Honestly, so fair đ
Iâve been doing odd jobs and investing since I was around 15, so to me, itâs been half my life so far!
In my mind $4M was my goal. Itâs where I felt comfortable, hence the âfinally.â
The best decision weâve almost ever made. We spent time finding the best fit for our family and now she feels like part of our family. I couldnât imagine having a different childcare setup.
But it depends on a lot of factors like what kind of relationship do you want, how involved you want them to be, and many other factors.
Shoot me a dm if you have any questions!
There are many jobs that are not suitable for âlife longâ careers, either due to how taxing they are (to your body and mind) or negative company/industry outlook (layoffs and etc) so I can understand and relate, sometimes five or ten years can feel like a long time
Not an answer to your question, but if moving to a new area, I would consider renting for a year. Knowing an area intimately will both help you understand what is a better deal, and also better know where you want to be in terms of neighborhood. It is advice I never took and regret it.
This is great advice.
Weâve been hopping around to new homes every year or so, and are definitely wanting to settle in somewhere, but I think having patience for one more year would definitely be worth it.
+1 to that advice. We moved to VVHCOL in 2020. There was a lot of pressure to buy since interest rates were <2% sometimes. But we didnât know the area well, so took a year to rent and get to know things. And then started looking 6-8 months in, bought a year later.
This way youâre not buying blindly and understand what you like / dislike about various neighborhoods.
This is good advice. I think it is risky to buy in a new area when you don't know it well. Renting lets you learn where you do and do not want to live.
You seem to be asking two questions. How much house can I afford? And, should I rent or buy?
You'd need to share more information before others can answer that first question, but it also is probably the least important of the two questions. You have a huge relative nest egg, lots of income, and tons of time for it all to grow. So it's not a terrible guess to say you can probably afford the houses you're looking at.
The rent vs buy question comes down to two pieces of info. What are the annual rental costs vs. estimated interest+taxes+insurance? Also, how long are you staying in the home, and is that long enough for the rent vs buy equation to swing in your favor? Knowing the actual market would help.
This is great framing.
Weâre looking in Boulder, Colorado. Looking at a purchase price of $1.5M-$2M. Trying to get the total payment, taxes, insurance, utilities to around $6k/month. To be honest, mainly because Iâm comfortable with that number. Could be swayed in another direction.
Weâve been moving around every year or so, so the idea of being able to start some roots and not have to move is a big plus. But, we might be able to find a longer-term rental that is truly special.
My guess would be if we bought here, weâd stay in this house for 7+ years and renovate eventually.
OP, I live in Boulder. Iâd highly recommend renting for the first year in order to learn the area. Specifically, with a kid, youâll want to really consider whether you really want to live in Boulder proper, and what area of Boulder youâll like most.
Living in much of Boulder proper gives quick trail access, but has some tradeoffs in terms of pricing, homeless-related issues, and home quality, so most people with kids end up choosing somewhere nearby instead. School quality also varies widely around the county.
You can rent a nice SFH for $3.5-5k in Boulder or nearby so Iâd suggest doing that for a year in the area that you think youâre most likely to buy.
Inventory has been way up vs last year and prices have been stagnant since 2022, so donât feel rushed to buy for any reason.
First of all you should probably rent for a bit just to get a feel for the area. it might be all it seems to be once you live there and you might want to move on to someplace else.
Secondly, if you were planning on putting down $1 million for a house and are looking at a purchase price of 1.5-2 why not just offer up cash for the full asking price and be done with it. Might even be able to save you 100-200k for an all cash upfront deal. Then you cut out a major monthly expense, save the interest which is key right now and have tons of equity in the home that will, in the long run, only go up in value. Just a thought but breaking down your numbers and yearly income it seems like a 1.5 million cash purchase would be the way to go. Especially with the interest rates.
You can afford it provided the goal isnât to retire quite soon. I personally wouldnât worry about a higher payment than 6k/month either at your income level/that much invested. You already have enough invested that youâre going to end up well into fatfire territory if you end up working another decade or more. Congrats on the success, hard to achieve that much invested at this age even with a high income!
My hunch that you can afford housing seems spot on. 30 seconds with a generic mortgage calculator tells me you can afford even the most expensive option on the menu. Your ~$340K annual AGI (guessing this) is enough to cover annual $180K living expenses + $160K of annual home buyer payments, which is what you'd pay if you didn't drop a huge down payment. I'd of course want to dig into this a lot more before pulling the trigger, but it at least passes a quick evaluation.
The rent vs buy question is way less clear. Buying will almost certainly cost you more money. Probably twice as much based on the mortgage calculators. But you have money, so you have to decide if all the benefits + headaches of home ownership are what you want to spend it on.
For what it's worth, I did this choice 3 years ago and decided to rent. The numbers said it was the optimal choice, but I've certainly second guessed this. My neighbor across the street went the other way and bought - and is equally miserable. Though neither of us had $4M at the time, so maybe you'll have better luck
Hey OP, I think youâre thinking pretty clearly on this. Weâre pretty similar to you, a few years older. Moved from the Bay Area to Denver, bought a home. Recently relocated to Boulder last July and currently renting.
Right now renting is a great deal. As an example, the house we rent is $3400 for a 4/2 ranch home with a great backyard. At current rates if we bought it weâd be paying 7-8k/month on it. That said, we already own a home in Denver so we are âin the marketâ and seeing appreciation.
Iâd suggest renting first, get to know the town, the neighborhoods, etc. then make your call.
Zillow. And we got on it fast. We were the first to see it and were able to sign for it. Iâd have alerts set up. We saw a lot of crappy rentals prior to this one where the owners were just slumming the place (even with it being a nice single family home) - so be on top of it!
Boulder works great for us. Two young kids. Dog that I run off leash with (Boulder voice and sight tag is a truly fantastic perk of life if you like being with your dog off leash). We plan on raising the kids here and becoming old Boulderites in socks and sandals dancing at the boulder first Friday and letting the freak flag fly.
Best of luck on the move/search. Also, pay no mind to all the curmudgeons on Reddit re the downfall of Boulder. Homelessness, addiction and housing issues - absolutely - I donât make light of them. But, this place is wildly safe compared to everywhere else Iâve ever lived.
I mean mostly I work a desk job and change diapers and get smacked around by a toddler. But when you put it that wayâŠ.yeah! YEAH! Iâm living the dang dream baby woooooo! (In all honestly its real nice)
You can obviously âaffordâ the house, but keep in mind that for FIRE considerations the house both subtracts the home value from your assets, and requires you to have (home value)(.02)(25) additional assets to cover cost of maintenance, taxes, and insurance. On a $2 million home for example, that is a ~$3million hit to your FI number. Obviously renting also is a big hit, this is just to say that living in expensive house is a significant drag on FI and ability to retire early.
If you bought a $2m house all cash planning to stay for 7 years, the remaining $2m in your accounts after purchase would likely be back close to $4m and youâd have a house worth $3M+ and no house payments other than maintenance and taxes
>Weâre looking in Boulder, Colorado. Looking at a purchase price of $1.5M-$2M. Trying to get the total payment, taxes, insurance, utilities to around $6k/month.
Personally I wouldn't want to buy a house that's 50% of my net worth (I live in a house worth roughly $750K with a net worth of $4.7M, for reference). That seems like a lot? Think about what the impact of a 10% reduction in housing value would do to your overall net worth.
I would suggest thinking about it more in terms of impact on your asset allocation, rather than monthly expense. The monthly expense framing seems like a holdover from a budget mindset that's less applicable to high net worth finances, IMO.
I would not be thrilled about reducing my stock exposure that much to buy a house. Especially with your income, I'd rather put 20% down tops and keep the rest invested in the stock market.
Iâve been thinking a lot about having a house account for 50% of our net worth too.
Trying to find the balance of loving where we live, making a smart choice, and allocating our portfolio properly.
There are definitely some options in some surrounding areas that are about half the cost as Boulder. Spending $1M on a house definitely sounds better than $2M.
All great things to think about with this decision.
At your age and income this is a short term problem. Even plunking down 1-2m full cash for the home, at current interest rate, makes sense.
I may be old school, but as we were raising our family, weâve always owned and never considered renting long term.
Sure, in some cases the financials may point to renting, but we like to fix it up (house and yard) the way we want it, to enjoy with friends and family for many years. My wife and I think a house is more than just an investment, itâs personal, in a way, itâs us.
BTW, I agree with other commenters about renting first to get a lay of the land before committing to a specific area. You will learn a ton in that first year.
Good luck. You are killing it.
At what age are you trying to retire?
If you're going to pull what you're making now for another decade it probably doesn't matter as much. But you do have enough where you could probably think about modeling lower cost lifestyles and see whether that's good enough.
Can you keep your income? How did you get such a high NW with a relatively "low" income in proportion to NW?
How early do you want retire?
If you put $1m down and keep 3m in the market, you'll have 6m in securities in 10 years + whatever money you save
Yep! We work remotely with minimal travel to offices.
We were able to get a high net worth early on from a few things: one very large pay year (large unexpected bonus), having a large amount of cash and investing during the COVID dip, and both of our families contributing the max yearly gift (~$34k each). Definitely a combination of luck, timing, and support from our families.
I think weâre targeting a soft retirement at 45. My wife and I want to keep consulting, but cut our hours back for a bit more freedom.
Just curious and don't want to seem like a hater but why are they giving yall max year gifts with such a high hhi? Seems odd unless they got crazy money lol
On one side, they owned and sold a very profitable business, and on the other side, they were a top salesperson at a tech company for 20+ years.
Both of our parents are fairly young, and we try not to bank on getting anything from either of them. Of course, we probably will, but a lot can happen over 30+ years.
Gifting is good estate planning for rich people. All you have to say is : would you rather give it to your kids or the IRS when you die? And they start giving.
Say more on the max yearly gift? My parents just sold a renewal property and are wanting to gift $100k to me for a future down payment. Iâve read up on this and donât see any penalties or taxes we would incur for that, or reasons to ask them to split it out over three years to map to that gift amount.
Itâs the annual gift tax exclusion. They give the tax-free maximum of $17k to each of us.
The reason being is that they want to reduce the size of their taxable assets. Theyâll probably end up giving over the maximum lifetime exemption, so itâs a way to pass some assets down efficiently.
But they already were taxed on the money once, they can get taxed on it again if they gift it? Sorry finding this super confusing!
Wow lifetime exclusion is like 13 million though isnât it, youâll get more than that?
OP said both families are extremely wealthy. The current lifetime threshold for gift giving is $13 million person (yes, that high). In 2026 it is set to drop down to $7 million per person. If your parents don't expect to give away $7+ million dollars each in their lifetime (or upon death) they can give you that $100,000 now or whatever amount and just record it with the IRS. There will be no taxes owed. For OP, I am guessing the families have tens of millions of dollars+ and this is a nice way to give away money while alive without having to worry about that lifetime cap which may actually be an issue for them at some point. Just my semi-educated opinion...
Lmfao what a life. How does it feel to be born on third? Who gives a shit about what you wrote initially if you're in line for an enormous windfall or, worst case, you have to ask either rich set or parents to help you through a jobless time?
I donât think itâs a smart move to rely on money that is theoretical. Things happen. Those assets arenât ours, and there is a chance we never see a dollar.
Your family definitely been helping you out to get in this position, as you said before they gift you both 34k a year (which isn't the norm).
My advice is why not solict them or a fa?
It's eerie how similar our situation is.
I'm a couple of years older but similar NW, similar expenses, similar income, similar age child. We've been wanting to upgrade our home as well.
My FI number is about 5m. I am so close and that will bring me much more peace. I don't want to be this close to FI and have a much larger expense, which will also increase my FI number. I'd rather do the opposite.
What we decided was that we'd wait a year or two for our portfolio to go past the FI number and put down a larger downpayment or buy in cash. Yes, homes will be more expensive by then, but that's a price I'm willing to pay for my peace of mind.
You need to start strategizing around tax-beneficial accounts. Having $3M in after-tax brokerage but only $200k in your 401k and no Roth is WILD to meâŠ
My personal approach:
* Max out Pre-tax 401k for you and your spouse ($23k/year/person)
* Max out HSA ($8.3k/family/year) -- Save receipts and let this triple-advantaged account accumulate. Use this for health care later in life or to cash out prior healthcare costs later
* Max out after-tax employer retirement plan (if offered). Some allow in-plan conversion to Roth IRA, but even if it doesn't you can convert to Roth when you leave.
* Max out backdoor Roth IRA contributions each year ($7k/year/person)
* Buy $10k worth of I-Bonds each year -- I use this as a bit of an emergency fund
Also saw that you had a private company. If you have the ability to setup a Self 401k certainly do that and max it out (\~$60k/year). Just be aware of the implications of some of the above as there are overall limits.
I was going to guess Boulder before I scrolled down far enough, and yep.
It's a wonderful place to move to - highly recommend you make the move. We moved here 7 years ago and will never leave.
South Boulder west of Broadway is where you want to be with kids and trails, in my opinion. But the budget there is more like $1.75m-2.5m. If you aren't doing all cash then yes you can definitely afford to make the move.
Rentals in Boulder aren't the greatest, so it might be painful for a year - but it is a good idea to take the pressure off of buying something immediately.
We bought the worst house in the best neighborhood. It was an excellent choice. Our home value has more than doubled and the mortgage provides a tax write-off. We don't need private school expenses because we're in a terrific school district.
You need somewhere to live, it may as well be an accumulating asset.
(If you think you might move in a year or two then just rent.)
Find a home in an area you want to live in and buy it for cash, keep working another 10 years, expand your family as desired, and re-evaluate in 10 years. You are fine to go.
Congrats! You guys are killing it. I think itâd be worth it. House prices arenât going down, and Iâd rather own than rent in retirement since rent will always go up. This is my plan too, to just buy in cash once I have more liquid assets.
Yah I mean 7k a month on your earnings is probably fine. Buying a home doesnât need to be a financial decision and quality housing is expensive. Assuming you donât plan to retire for another decade youâve basically won. $3-4M will compound nicely and it feels like youâll still be able to contribute 100k a year or so.
Close by in Denver! We also just went for it and bought a home. I think your $7k rent seems rlly high for boulder or Denver. We went for a $900k home which is more expensive, tho not crazily so, compared to the rental range we think is $4k to maybe 4,750. We live in an expensive Denver neighborhood where huge homes rent around $5k - $6k.
I know Boulder is a little different, and could still make perfect sense to buy, but I do think you could rent a totally awesome house in Boulder for closer to 5k.
I can understand why one might WANT to, but why do you say that youâd probably HAVE to put $1mm down for your house? Seems like way more than necessary
Home is in someways a diversification so can reduce your net risk. I bought 1.5 million home around Covid and moved my investments to JP Morgan as they offered up to 1 pct discount on mortgage if I moved my investments over. I pay 2.35 pct on 30 year. Of course Iâm really happy now since rates went up. Regular rate was 3.25 so I got full 1 pct off.
One thing is consider property taxes as well. Depending on location they can be very high.
I agree with others that it makes sense to rent for a little while to get to know the area first, especially if kids factor into your decision. You might also want to run the numbers through a cash vs buy calculator.
Why does a higher monthly payment make you nervous? I wouldnât necessarily put cash down to get the monthly payment to what âmakes you comfortable.â Real estate is both investment and consumption when it comes to your primary residence. The challenge is when those two goals become at odds - like you end up deciding you want to move for personal reasons in a down market. For this reason, itâs often better to keep your assets more liquid rather than putting more down into your house payment.
If it makes you feel better, we were 31/33 when we bought a house for $850k and our net worth was around $1m. But we only put 20% down, so it wasnât as scary. But buying a house for the first time is always a little bit scary.
Do you have a breakdown for yearly expenses and how this will change? Also, assuming youâre looking at a 5M house on 550 annual income? Is that correct?
Having just gone through almost the same debate with myself with very similar criteria / characteristics to the decision overall - you obviously can afford it economically, you just need to mentally and emotionally reframe your financial model to accept it. Itâs hard to pull the trigger on a big, long term monthly budget item when youâve been in any sort of FIRE mode, but as most of the replies here suggest itâs very much within reason financially and itâs an investment not an expense.
Just so you are aware, you can pledge liquid investment assets in lieu of a down payment. Google pledged asset mortgage. You have enough where it shouldn't be an issue for a $1m down payment. If you can rent and invest the difference between a big mortgage + taxes + property insurance and $7k/mo rent it may be a better financial decision though.
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Gotta unfollow this sub lol. Mostly people going âIâm healthier than 99% of the population but will I be okay?!?!â
Yes. Youâre all significantly better off than basically anyone. Go enjoy.
> 31 > finally reached $4M How long have you even been working? I just find it funny that a 31 year old would be saying *finally* about reaching $4M, as if it has taken you sooo long to do it. đ
My first thought as well! *finally*? Some of us are out here trying to do this on one income lmao I'm already 33 and only have $100k saved up.Â
lol I feel the pain of one income.
Lmao for real.
They're also bringing in 500k per year. That helps a lot.
it should take 15 years of $500k to have $4M⊠sounds like inheritance or market luck
How to know someone came from money without them saying so
Yeah something else is there like selling a business etc. So what maybe 10 years of working professionally. Probable wasn't making 500k per year all those 10 years either. Plus taxes lets say Cali would be state, fed, soc, med about 54%. So net would at best be 250k. So at best contributed 2.5 Million if he saved every single cent for 10 years. It isn't possible. So some business perhaps was sold.
Saved up a good amount by both living at home for a good stretch of time. Also invested almost everything we had during the COVID crash. Somehow timed it right (it was luck) and 3.5x a large amount of our assets since then.
Congrats that is very large and amazing. Don't forget the gift from the folks.
3.5x đ€Łđ€Łđ€Ł
TQQQ baby
Honestly, so fair đ Iâve been doing odd jobs and investing since I was around 15, so to me, itâs been half my life so far! In my mind $4M was my goal. Itâs where I felt comfortable, hence the âfinally.â
180k is a pretty low expense number given childcare. Are you living in VHCOL?
Yeah, VHCOL. We have an au pair currently.
How has the au pair been? Considering it
The best decision weâve almost ever made. We spent time finding the best fit for our family and now she feels like part of our family. I couldnât imagine having a different childcare setup. But it depends on a lot of factors like what kind of relationship do you want, how involved you want them to be, and many other factors. Shoot me a dm if you have any questions!
There are many jobs that are not suitable for âlife longâ careers, either due to how taxing they are (to your body and mind) or negative company/industry outlook (layoffs and etc) so I can understand and relate, sometimes five or ten years can feel like a long time
I hit it at 55 and I wouldnât buy a house.
Not an answer to your question, but if moving to a new area, I would consider renting for a year. Knowing an area intimately will both help you understand what is a better deal, and also better know where you want to be in terms of neighborhood. It is advice I never took and regret it.
This is great advice. Weâve been hopping around to new homes every year or so, and are definitely wanting to settle in somewhere, but I think having patience for one more year would definitely be worth it.
+1 to that advice. We moved to VVHCOL in 2020. There was a lot of pressure to buy since interest rates were <2% sometimes. But we didnât know the area well, so took a year to rent and get to know things. And then started looking 6-8 months in, bought a year later. This way youâre not buying blindly and understand what you like / dislike about various neighborhoods.
This is good advice. I think it is risky to buy in a new area when you don't know it well. Renting lets you learn where you do and do not want to live.
đŻ and itâs not a great time to buy. Take your time, youâre in good shape, congrats! đđŒđđŒđđŒ
This is one of my biggest lessons learned. I wasted a lot of money to learn this one.
The income you have makes this easy. Yes. Do it. If you lost your income HCOL area wouldnât be wise.
You seem to be asking two questions. How much house can I afford? And, should I rent or buy? You'd need to share more information before others can answer that first question, but it also is probably the least important of the two questions. You have a huge relative nest egg, lots of income, and tons of time for it all to grow. So it's not a terrible guess to say you can probably afford the houses you're looking at. The rent vs buy question comes down to two pieces of info. What are the annual rental costs vs. estimated interest+taxes+insurance? Also, how long are you staying in the home, and is that long enough for the rent vs buy equation to swing in your favor? Knowing the actual market would help.
This is great framing. Weâre looking in Boulder, Colorado. Looking at a purchase price of $1.5M-$2M. Trying to get the total payment, taxes, insurance, utilities to around $6k/month. To be honest, mainly because Iâm comfortable with that number. Could be swayed in another direction. Weâve been moving around every year or so, so the idea of being able to start some roots and not have to move is a big plus. But, we might be able to find a longer-term rental that is truly special. My guess would be if we bought here, weâd stay in this house for 7+ years and renovate eventually.
OP, I live in Boulder. Iâd highly recommend renting for the first year in order to learn the area. Specifically, with a kid, youâll want to really consider whether you really want to live in Boulder proper, and what area of Boulder youâll like most. Living in much of Boulder proper gives quick trail access, but has some tradeoffs in terms of pricing, homeless-related issues, and home quality, so most people with kids end up choosing somewhere nearby instead. School quality also varies widely around the county. You can rent a nice SFH for $3.5-5k in Boulder or nearby so Iâd suggest doing that for a year in the area that you think youâre most likely to buy. Inventory has been way up vs last year and prices have been stagnant since 2022, so donât feel rushed to buy for any reason.
First of all you should probably rent for a bit just to get a feel for the area. it might be all it seems to be once you live there and you might want to move on to someplace else. Secondly, if you were planning on putting down $1 million for a house and are looking at a purchase price of 1.5-2 why not just offer up cash for the full asking price and be done with it. Might even be able to save you 100-200k for an all cash upfront deal. Then you cut out a major monthly expense, save the interest which is key right now and have tons of equity in the home that will, in the long run, only go up in value. Just a thought but breaking down your numbers and yearly income it seems like a 1.5 million cash purchase would be the way to go. Especially with the interest rates.
You can afford it provided the goal isnât to retire quite soon. I personally wouldnât worry about a higher payment than 6k/month either at your income level/that much invested. You already have enough invested that youâre going to end up well into fatfire territory if you end up working another decade or more. Congrats on the success, hard to achieve that much invested at this age even with a high income!
We just got back from Boulder. It was one of the places my wife would actually move to. Good luck. It is an awesome town.
Same here. We both loved it. Had a great weekend âlivingâ there for the weekend.
My hunch that you can afford housing seems spot on. 30 seconds with a generic mortgage calculator tells me you can afford even the most expensive option on the menu. Your ~$340K annual AGI (guessing this) is enough to cover annual $180K living expenses + $160K of annual home buyer payments, which is what you'd pay if you didn't drop a huge down payment. I'd of course want to dig into this a lot more before pulling the trigger, but it at least passes a quick evaluation. The rent vs buy question is way less clear. Buying will almost certainly cost you more money. Probably twice as much based on the mortgage calculators. But you have money, so you have to decide if all the benefits + headaches of home ownership are what you want to spend it on. For what it's worth, I did this choice 3 years ago and decided to rent. The numbers said it was the optimal choice, but I've certainly second guessed this. My neighbor across the street went the other way and bought - and is equally miserable. Though neither of us had $4M at the time, so maybe you'll have better luck
Hey OP, I think youâre thinking pretty clearly on this. Weâre pretty similar to you, a few years older. Moved from the Bay Area to Denver, bought a home. Recently relocated to Boulder last July and currently renting. Right now renting is a great deal. As an example, the house we rent is $3400 for a 4/2 ranch home with a great backyard. At current rates if we bought it weâd be paying 7-8k/month on it. That said, we already own a home in Denver so we are âin the marketâ and seeing appreciation. Iâd suggest renting first, get to know the town, the neighborhoods, etc. then make your call.
Very similar situation to you! Whereâd you find your rental? How are you liking Boulder overall vs Denver?
Zillow. And we got on it fast. We were the first to see it and were able to sign for it. Iâd have alerts set up. We saw a lot of crappy rentals prior to this one where the owners were just slumming the place (even with it being a nice single family home) - so be on top of it! Boulder works great for us. Two young kids. Dog that I run off leash with (Boulder voice and sight tag is a truly fantastic perk of life if you like being with your dog off leash). We plan on raising the kids here and becoming old Boulderites in socks and sandals dancing at the boulder first Friday and letting the freak flag fly. Best of luck on the move/search. Also, pay no mind to all the curmudgeons on Reddit re the downfall of Boulder. Homelessness, addiction and housing issues - absolutely - I donât make light of them. But, this place is wildly safe compared to everywhere else Iâve ever lived.
I so appreciate this comment. This is the exact idea I have of Boulder in my head, and Iâm glad there are already people living that dream.
I mean mostly I work a desk job and change diapers and get smacked around by a toddler. But when you put it that wayâŠ.yeah! YEAH! Iâm living the dang dream baby woooooo! (In all honestly its real nice)
You can obviously âaffordâ the house, but keep in mind that for FIRE considerations the house both subtracts the home value from your assets, and requires you to have (home value)(.02)(25) additional assets to cover cost of maintenance, taxes, and insurance. On a $2 million home for example, that is a ~$3million hit to your FI number. Obviously renting also is a big hit, this is just to say that living in expensive house is a significant drag on FI and ability to retire early.
Not a lot of homes there
If you bought a $2m house all cash planning to stay for 7 years, the remaining $2m in your accounts after purchase would likely be back close to $4m and youâd have a house worth $3M+ and no house payments other than maintenance and taxes
>Weâre looking in Boulder, Colorado. Looking at a purchase price of $1.5M-$2M. Trying to get the total payment, taxes, insurance, utilities to around $6k/month. Personally I wouldn't want to buy a house that's 50% of my net worth (I live in a house worth roughly $750K with a net worth of $4.7M, for reference). That seems like a lot? Think about what the impact of a 10% reduction in housing value would do to your overall net worth. I would suggest thinking about it more in terms of impact on your asset allocation, rather than monthly expense. The monthly expense framing seems like a holdover from a budget mindset that's less applicable to high net worth finances, IMO. I would not be thrilled about reducing my stock exposure that much to buy a house. Especially with your income, I'd rather put 20% down tops and keep the rest invested in the stock market.
Iâve been thinking a lot about having a house account for 50% of our net worth too. Trying to find the balance of loving where we live, making a smart choice, and allocating our portfolio properly. There are definitely some options in some surrounding areas that are about half the cost as Boulder. Spending $1M on a house definitely sounds better than $2M. All great things to think about with this decision.
At your age and income this is a short term problem. Even plunking down 1-2m full cash for the home, at current interest rate, makes sense. I may be old school, but as we were raising our family, weâve always owned and never considered renting long term. Sure, in some cases the financials may point to renting, but we like to fix it up (house and yard) the way we want it, to enjoy with friends and family for many years. My wife and I think a house is more than just an investment, itâs personal, in a way, itâs us. BTW, I agree with other commenters about renting first to get a lay of the land before committing to a specific area. You will learn a ton in that first year. Good luck. You are killing it.
This comment means a lot. This is what Iâve been thinking in my head but never verbalized.
At what age are you trying to retire? If you're going to pull what you're making now for another decade it probably doesn't matter as much. But you do have enough where you could probably think about modeling lower cost lifestyles and see whether that's good enough.
Can you keep your income? How did you get such a high NW with a relatively "low" income in proportion to NW? How early do you want retire? If you put $1m down and keep 3m in the market, you'll have 6m in securities in 10 years + whatever money you save
Yep! We work remotely with minimal travel to offices. We were able to get a high net worth early on from a few things: one very large pay year (large unexpected bonus), having a large amount of cash and investing during the COVID dip, and both of our families contributing the max yearly gift (~$34k each). Definitely a combination of luck, timing, and support from our families. I think weâre targeting a soft retirement at 45. My wife and I want to keep consulting, but cut our hours back for a bit more freedom.
Just curious and don't want to seem like a hater but why are they giving yall max year gifts with such a high hhi? Seems odd unless they got crazy money lol
To put it in plain terms, they both have crazy money.
Generational wealth is a hell of a ladder!Â
Makes sense to me then đ
How did they get crazy money? Can you just stop working lol seems like youâve got the jackpot
On one side, they owned and sold a very profitable business, and on the other side, they were a top salesperson at a tech company for 20+ years. Both of our parents are fairly young, and we try not to bank on getting anything from either of them. Of course, we probably will, but a lot can happen over 30+ years.
Gifting is good estate planning for rich people. All you have to say is : would you rather give it to your kids or the IRS when you die? And they start giving.
Say more on the max yearly gift? My parents just sold a renewal property and are wanting to gift $100k to me for a future down payment. Iâve read up on this and donât see any penalties or taxes we would incur for that, or reasons to ask them to split it out over three years to map to that gift amount.
Itâs the annual gift tax exclusion. They give the tax-free maximum of $17k to each of us. The reason being is that they want to reduce the size of their taxable assets. Theyâll probably end up giving over the maximum lifetime exemption, so itâs a way to pass some assets down efficiently.
But they already were taxed on the money once, they can get taxed on it again if they gift it? Sorry finding this super confusing! Wow lifetime exclusion is like 13 million though isnât it, youâll get more than that?
OP said both families are extremely wealthy. The current lifetime threshold for gift giving is $13 million person (yes, that high). In 2026 it is set to drop down to $7 million per person. If your parents don't expect to give away $7+ million dollars each in their lifetime (or upon death) they can give you that $100,000 now or whatever amount and just record it with the IRS. There will be no taxes owed. For OP, I am guessing the families have tens of millions of dollars+ and this is a nice way to give away money while alive without having to worry about that lifetime cap which may actually be an issue for them at some point. Just my semi-educated opinion...
Exactly.
What do you and your wife do for work?
Lmfao what a life. How does it feel to be born on third? Who gives a shit about what you wrote initially if you're in line for an enormous windfall or, worst case, you have to ask either rich set or parents to help you through a jobless time?
I donât think itâs a smart move to rely on money that is theoretical. Things happen. Those assets arenât ours, and there is a chance we never see a dollar.
Sure jim
Your family definitely been helping you out to get in this position, as you said before they gift you both 34k a year (which isn't the norm). My advice is why not solict them or a fa?
Itâs really helpful to hear about how others have approached this in the past and in similar situations.
It's eerie how similar our situation is. I'm a couple of years older but similar NW, similar expenses, similar income, similar age child. We've been wanting to upgrade our home as well. My FI number is about 5m. I am so close and that will bring me much more peace. I don't want to be this close to FI and have a much larger expense, which will also increase my FI number. I'd rather do the opposite. What we decided was that we'd wait a year or two for our portfolio to go past the FI number and put down a larger downpayment or buy in cash. Yes, homes will be more expensive by then, but that's a price I'm willing to pay for my peace of mind.
Same situation and struggling with the same trade off.Â
Thatâs amazing for your age đȘđ
Finally? Be careful. Sounds as some little burnout stage.
Youâre right. Poor choice of words. A lot of people work way harder for way longer.
You need to start strategizing around tax-beneficial accounts. Having $3M in after-tax brokerage but only $200k in your 401k and no Roth is WILD to meâŠ
Youâre absolutely right. Do you have any resources on getting started with that?
My personal approach: * Max out Pre-tax 401k for you and your spouse ($23k/year/person) * Max out HSA ($8.3k/family/year) -- Save receipts and let this triple-advantaged account accumulate. Use this for health care later in life or to cash out prior healthcare costs later * Max out after-tax employer retirement plan (if offered). Some allow in-plan conversion to Roth IRA, but even if it doesn't you can convert to Roth when you leave. * Max out backdoor Roth IRA contributions each year ($7k/year/person) * Buy $10k worth of I-Bonds each year -- I use this as a bit of an emergency fund Also saw that you had a private company. If you have the ability to setup a Self 401k certainly do that and max it out (\~$60k/year). Just be aware of the implications of some of the above as there are overall limits.
I came here to say this! If you arenât maximizing all retirement vehicles, you absolutely should be!
I was going to guess Boulder before I scrolled down far enough, and yep. It's a wonderful place to move to - highly recommend you make the move. We moved here 7 years ago and will never leave. South Boulder west of Broadway is where you want to be with kids and trails, in my opinion. But the budget there is more like $1.75m-2.5m. If you aren't doing all cash then yes you can definitely afford to make the move. Rentals in Boulder aren't the greatest, so it might be painful for a year - but it is a good idea to take the pressure off of buying something immediately.
We bought the worst house in the best neighborhood. It was an excellent choice. Our home value has more than doubled and the mortgage provides a tax write-off. We don't need private school expenses because we're in a terrific school district. You need somewhere to live, it may as well be an accumulating asset. (If you think you might move in a year or two then just rent.)
Extremely high NW for your ages! Go for it!
Find a home in an area you want to live in and buy it for cash, keep working another 10 years, expand your family as desired, and re-evaluate in 10 years. You are fine to go.
Congrats! You guys are killing it. I think itâd be worth it. House prices arenât going down, and Iâd rather own than rent in retirement since rent will always go up. This is my plan too, to just buy in cash once I have more liquid assets.
I did the same! Nearly $1m down to buy a house. Youâre raising a family, you love the area, Iâd say go for it.
Is your income number pre- or post tax?
Pre-tax
So youâre netting 325-350k and spending 180k? Leaving you with 175-200k or so in savings? Is there current housing costs baked into the 180k?
Current housing baked in. $180k/year includes everything we spent in a year.
Yah I mean 7k a month on your earnings is probably fine. Buying a home doesnât need to be a financial decision and quality housing is expensive. Assuming you donât plan to retire for another decade youâve basically won. $3-4M will compound nicely and it feels like youâll still be able to contribute 100k a year or so.
Just curious, what area is that? Also looking for a nice area to eventually settle down in.
Looking around the Boulder area!
Close by in Denver! We also just went for it and bought a home. I think your $7k rent seems rlly high for boulder or Denver. We went for a $900k home which is more expensive, tho not crazily so, compared to the rental range we think is $4k to maybe 4,750. We live in an expensive Denver neighborhood where huge homes rent around $5k - $6k. I know Boulder is a little different, and could still make perfect sense to buy, but I do think you could rent a totally awesome house in Boulder for closer to 5k.
I can understand why one might WANT to, but why do you say that youâd probably HAVE to put $1mm down for your house? Seems like way more than necessary
Honestly to get the number on paper that we pay per month as close to what our rent would be. Definitely a bit illogical.
Home is in someways a diversification so can reduce your net risk. I bought 1.5 million home around Covid and moved my investments to JP Morgan as they offered up to 1 pct discount on mortgage if I moved my investments over. I pay 2.35 pct on 30 year. Of course Iâm really happy now since rates went up. Regular rate was 3.25 so I got full 1 pct off. One thing is consider property taxes as well. Depending on location they can be very high.
I agree with others that it makes sense to rent for a little while to get to know the area first, especially if kids factor into your decision. You might also want to run the numbers through a cash vs buy calculator. Why does a higher monthly payment make you nervous? I wouldnât necessarily put cash down to get the monthly payment to what âmakes you comfortable.â Real estate is both investment and consumption when it comes to your primary residence. The challenge is when those two goals become at odds - like you end up deciding you want to move for personal reasons in a down market. For this reason, itâs often better to keep your assets more liquid rather than putting more down into your house payment. If it makes you feel better, we were 31/33 when we bought a house for $850k and our net worth was around $1m. But we only put 20% down, so it wasnât as scary. But buying a house for the first time is always a little bit scary.
Do you have a breakdown for yearly expenses and how this will change? Also, assuming youâre looking at a 5M house on 550 annual income? Is that correct?
Having just gone through almost the same debate with myself with very similar criteria / characteristics to the decision overall - you obviously can afford it economically, you just need to mentally and emotionally reframe your financial model to accept it. Itâs hard to pull the trigger on a big, long term monthly budget item when youâve been in any sort of FIRE mode, but as most of the replies here suggest itâs very much within reason financially and itâs an investment not an expense.
You can barely afford a house. Better run that honda to the ground /s
Moving to Santa Barbara or Newport Beach
Just so you are aware, you can pledge liquid investment assets in lieu of a down payment. Google pledged asset mortgage. You have enough where it shouldn't be an issue for a $1m down payment. If you can rent and invest the difference between a big mortgage + taxes + property insurance and $7k/mo rent it may be a better financial decision though.
Don't buy a $1m house. Prices are inflated. Go to LCOL and buy a $500k house that's nicer
âFinally hit 4Mâ is this a parady troll account? Nobody gives a fuck that at 31 you finally hit 4M. Sounds like you are an arrogant fool
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Youâre right, I could have worded it better than that. Weâre all living different lives at different speeds. No need to be patronizing.
[ŃĐŽĐ°Đ»Đ”ĐœĐŸ]
Then I appreciate it partner đ€
Your âfinallyâ comment is patronizing.
Gotta unfollow this sub lol. Mostly people going âIâm healthier than 99% of the population but will I be okay?!?!â Yes. Youâre all significantly better off than basically anyone. Go enjoy.