Tag Archives: rent

Real Estate & Rent

I’m Pregnant: With a New House

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I feel like I’m having twins. Except one is a baby and the other is a house. My first house. My house. Well, our house. In the middle of our street. In the middle of my check book.

After a 300k+ downpayment, you’d think we could stop bleeding cash for a while. But a “new” house in these here parts is an old house. A pre 1970s house. Which, when I bought it, didn’t seem that old — given many houses here are from the 1920s. Then, after buying it, I realized it is pretty old. Old enough to need a whole bunch of new things.

I set aside 50k for first year repairs–and I’m going to spend it all up front. Fumigation – 3k. Roof – 2k. Electric – 15k. HVAC – 15k-20k. And that’s before we get to the nice-to-haves, like an electric garage door opener, a hallway bathroom remodel (so we can have a bathtub), and maybe epoxy on the garage floor to make it into a gym (ok that’s a luxury but “only” 2k.) I don’t love the layout of the house and the two bedrooms we will be living in for the foreseeable future (while my FIL lives in the master bedroom suite) are tiny. I’d like to add on to them and rip out everything in the house and redo it all but… ok, I’m not that crazy. Maybe I am. But I’m also actually pregnant. And tired. And not ready to complete a massive remodel and cash out all my stock to build on to this house. It will probably never happen. I need to be happy with the house as is.

I’m trying to be. It’s scary to be a homeowner. I think homeownership is kind of bullshit but I’m doing it anyway. It’s a total scam. The “American dream” my ass. In a HCOL area it takes 35+ years to break even, if that. That’s not counting all the upgrades you put into your house because it’s your house. You know, home ownership and this dream is really just the government wanting to convince people to take care of a little plot of land and pay more taxes for that land and feel stuck. Being stuck is good for the stability of a nation. Not so much for its people.

But I did it anyway? Why. Oh, I don’t know. As our networth creeps towards 2M, and as we’re approaching baby #2, it seemed like the right thing to do. Give my kids some stability. It’s good for them, supposedly. I don’t know. I lived in the same house my entire childhood and look how I turned out–and now I’m just an emotional mess on my mom having to sell that home. And I’m almost 37. Maybe I’d be better off if I moved around as a kid and didn’t have such an emotional attachment to a piece of real estate.

Anyway, I did it. The home is ours. And right now it’s actually ours but we can’t go in it because the sellers have a rent back and they’ll be out on Nov 7. Then it’s ours ours. Ours to put a massive tent over and fumigate. Ours to replace the old fire hazard electrical panel. And redo the vents so we can put in AC. Ours to move our king size bed into the 100 square foot bedroom with a tiny closet because that’s what my life is now. Spending 1.5M+ on a home should buy some luxury but it doesn’t here. I have a little more space than a 1.3M home but not much more. I don’t know what I have. A 1.5M+ headache. A 7k a month mortgage. A whole lot of new stress. Neighbors — god — people I will have to get to know and can’t avoid if for any reason I want to avoid them.

I’ll miss my apartment — but we couldn’t stay in our one bedroom anyway. I’ll miss my neighborhood and town, and the last town I lived in where we tried to find a place to buy but gave up with everything going 300k above ask. I feel like this is kind of the end of everything, versus the start of it, which is the wrong way to be approaching home ownership. But it’s kind of a let down. You save and save and save and then the best you can do is buy a half-decent home with a lot of repairs needed that’s over an hour from your office. Is it an accomplishment? I don’t know. Hard to say. Maybe it will feel like it is when we have it fixed up. When it’s really ours ours. When I can tell my son this is his house, for real. His front door. His bedroom. His backyard.

I’m looking forward to the space. The grass I can lie on during the day with no one giving me funny looks. The same grass I can sleep in without worrying I’ll wake up and my keys will be gone. All the walls that we can do whatever we want with. So much responsibility. 85k a year of it, plus whatever it costs to keep the house “alive.” What a fancy life I lead.

Real Estate & Rent

Buying a House in the Bay Area Even Though It’s Probably Going to Burn Down

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Anyone on the west coast at the moment is dealing with some ill effects of the insane wildfires raging up and down the coast. Many of us woke up to apocalypitc orange skies earlier this week, and have been coughing through the impact of that atmospheric ash slowly raining on us all weekend. COVID is still raging as well, as is the occasional heat wave, and we’re all stuck in our various apartments and homes that do not come standard with air conditioning.

Yet, I’m still planning on buying an overpriced home here. That will likely set a wildfire to my own FIRE journey. All logical signs point to RENT but I can’t get the buying dream out of my head. At the very least–when times get tough–this will force us to find a way to earn more. This is good for me (I won’t be able to give up) and good for my husband, who hasn’t changed jobs (one part time job) in over 15 years. He has the same home ownership dream I have, so in a way it gets us on the same page regarding finances a bit. I think that will be good. It’s not like I’m just saying we need to save more for retirement (no matter how hard I try, he doesn’t get it and thinks he can live cheap and be fine on his minimal savings.) But a house — he gets that. So at least he will be on board to earn more if (when) shit hits the fan.

I see my own financial life going one of two ways:

  • I get somewhat wealthy. A few years ago, I would have said you’re bonkers if you proposed this idea to me. I had been saving for years and while I had “a lot” in my accounts, it was still no where near the amount that would allow me to ever achieve “wealth”–that is a minimum of $5M in networth. The I joined a company with actual stock (not stock options) and it went up in value a lot. And my other stocks also went up. It showed me how in 4 years, I could increase my networth by $1M. From ~$500k in 2017 to ~$1.5M at the end fo this year. Now, that was a winning lotto ticket. But there’s also no reason to think, if I were a normal person, that I couldn’t keep moving up in my career and getting similar grants for the next 30 years of my career. They may not go up as much as this one did, but at some point I would hit the $5M goal. It doesn’t seem completely impossible–and I don’t even need my husband’s money to make it happen.
  • I can’t afford the mortgage. This is the other option. I know, these are two extremes– but I really see this being how my financial life plays out going forward. If I can figure out a career where I can every 4-5 years or so go to a new job and keep moving up, I should be ok. If I can continue to obtain mid-level/senior-level roles in large companies then I should be fine. But the other–very realistic potential–is that I let my mental health issues get the best of me–I stay at this job for a while longer, then move to a different role (in order to maintain the level of stock grant you have to switch companies usually) and then I bomb, and I spend the next many years working at low-paid startups with crazy CEOs who hire me to do the impossible as a one-woman shop because I can’t get another role at a public company again. I’ll burn out on that too, because I’m no longer in my 20s. So then I don’t know what happens. My one ask to my husband is if we buy a house, after our kids are in school (and he is no longer a part time SAHD), can he get a FT job (esp if this scenario plays out.) He seems open to it, but it’s hard not knowing what that looks like. It’s hard to commit to a very expensive 30 year mortgage when who the hell knows what will happen.

So why not rent?

I know, I know. Renting is a fine idea. We’ve looked at a few rentals. I’m the type of person who is mentally impacted by her living space. And the actual SPACE. I grew up in not only a reasonably large house with a big backyard, but also a large room. I tend to feel claustrophobic in small spaces. I understand if financially it’s the best thing to do, I can deal with tiny rooms. I can deal with a lot if we just don’t have the money to have a nicer life.

Then I look at my bank account. Between my husband and I, by the end of this year, we should be just shy of $2M, or perhaps quite shy of $2M if the markets keep dropping. I also watch as my total wealth drops $100k-$200k in a day or two, and at this point I don’t bat an eye (outside to check if I should tax loss harvest any dumb investments I’ve made before they drop further and rebalance into a better diversified portfolio.) I’ve trained myself to be ok about losing $200k in the stock market (on paper) yet I’m completely terrified of buying a $1.6M house and it being worth $1.4M after we live in it for a few years (I mean, I’m terrified of it being worth $800k after we live in it for a few years — but the stock market could also drop 50% in a few years and I’m not selling. So why NOT buy a house?)

I’ve also run the numbers. It appears with the limited tax write-offs, at some point it still makes sense to own. That $500k capital gains tax exclusion on homes helps a lot when you’re a high earner (which is dumb as I hate how most of the tax law benefits not only rich people more but people who consistently have high incomes, as it assumes if you make a lot one year you always will.) But–as a current high earner (which in CA means something different than the rest of the country, mind you) I feel like I have to take advantage of what’s left in the tax law that benefits higher earners, as long as it still exists.

Home Ownership Tax Benefits are Slim, But Still Exist

There’s Prop 13. For those of you who don’t know Prop 13, it basically locks your tax amount into the value of your home when you purchased it, plus inflation. I’m torn on how I feel about this law. On one hand, I think it’s necessary because it makes sure that people who buy homes that are affordable (to them at the time) don’t get priced out because suddenly a tech company moves in down the street and their house is worth a bazillion dollars, and their forever tax bill goes up so much they have to sell and move.

On the other hand, Prop 13 keeps people from moving when they should, making the housing inventory low. Worse, it also significantly reduces property tax, which means despite being a high tax state, public schools are chronically underfunded. It’s all pretty messed up.

Nonetheless, it is what it is. So, buying in my 30s and staying in that home for years can be quite fruitful, as long as Prop 13 stays intact. I would imagine they would probably have to grandfather current owners and phase it out over time, even if they realize it’s not sustainable — but who knows. In any case, it is the law now, which means even though we will have to be paying taxes forever, in 30 years we’d be paying taxes on a home “worth” $1.6M, even if the going market rate is $3M or more—even if our neighbors who just moved in are paying taxes on a $3M and we’re paying half what they’re paying. That makes retiring here possible.

I’ve been thinking a lot about old age lately–not because I’m old quite yet–but because I’m helping my 66 year old mother plan HER life. And that situation is a total cluster due to poor money management by my parents. My goal is to be wealthy to be able to help her out a bit (at least pay her back for college and my wedding, especially if she lives long enough to really need the money, which I hope she does.) BUT — for me, I think I want the option to stay in my home and have a live-in aide. Who the hell knows what I will want when I am 65/70/80 etc, but why not plan for that now? The worst that happens is I end up with way too much money to split between my kids and charity when I die. At the very least, that buys me options. Especially since my husband seems on the “I don’t want to think about retirement bandwagon” (I did convince him to set up a Solo 401k so we’re putting about $35k collective to that a year while we can to make up for many years of no retirement savings–but buying a house will def make that saving harder to do.)

Let’s Be Stupid and Buy a House in the Bay Area

Anyway, here we are, ready to do something maybe stupid. Maybe making the worse financial decision of my life. After looking at hundreds of houses all over the Bay Area, we’re ready to put our second offer in — and first one that’s actually AT list. I don’t know if that will get us anywhere, but I have a good feeling about this one. It’s not perfect at all, but I feel (somewhat) good about the compromises.

The major compromise is that it’s a 3 bedroom, 2.5 bath that we will be sharing with my father-in-law for TBD years. FIL will pay $2k a month towards our mortgage and help with watching our son while we work. It isn’t full time childcare coverage, but it’s still a huge help. And my husband and I both feel strongly about keeping our kids out of daycare during the whole COVID mess for many reasons.

Our initial goal was to find a 3/2 with a separate living unit. We’ve looked at all sorts of places–homes with weird in-laws, detached ADUs were the ADU was modern and beautiful and the main house was decrepit, 5 bedroom houses with a downstairs master that was beautiful that could maybe work and 4 upstairs “bedrooms” that were barely bigger than my pinky, on lots with no real private outdoor space.

The conclusion I came to — in my semi logical state of thinking right now in a complete blur as a pregnant woman who has seen a thousand too many houses so far — is we must compromise to make it work here and not totally kill us financially.

I had to throw most of the “how much can you afford” rules at the window. Few people have $1M in taxable stocks at my age also. I can’t rely on the $1M in stocks because that could drop to half that or less, but it’s a different kind of cushion. I’m not selling right now because our capital gains tax in CA is so high — but if we hit a rough patch and need to sell stock, even if it’s gone down a bit, we’ll likely have a lower earning year and have lower cap gains tax. So it’s worth it to leave the stock and not put it into a larger down payment after losing 40% of it or so by selling it all, and let it ride and have it as a safety net.

Where I want to be is at 28% or less of our pre-tax income, before bonus and RSU. I wanted to do this after-tax, but if we did that the math shows we can afford to stay in our current 1br. I decided I need to be slightly less risk-averse here. The 2-3x salary rule doesn’t work. It tells use we can buy a $750k house. That doesn’t exist here. And that doesn’t take into account bonus or RSU which I prefer to ignore for planning purposes, but still doesn’t tell the whole story.

My banker said 32% is the DTI rule he prefers. I’m aiming for 28%.

I am assuming I can make $175k a year going forward, or my husband can eventually get a full time job and make up the difference (ie if I earn $150k, he can make $25k more, which is very realistic if he got a full time job.)

His income is a lot more consistent than mine is actually — so I’m locking him in at $90k a year. I feel good that even if he has to change jobs and get a FT entry level job in a tech company (which I think he could do), he could make at least $90k.

  • That gets us to $265k a year, or $22k a month, give or take.
  • 28% of that is about $6k a month.
  • I feel pretty good about $6k a month going to our housing costs.
  • I feel better about $5k a month going to housing costs.
  • If we do my banker’s 32%, that gets us to $7k a month. I don’t like $7k a month, but I’m ok with it knowing that we probably will earn MORE than the total comp I’m including in this plan (my last two startup jobs my base was in this range and that was years ago)

So $6k a month is our target, $7k is our stretch, $5k is our happy place.

Even though my FIL’s contribution won’t go on forever (esp if we buy a home with only 3 bedrooms), it will definitely help up front when our income is likely the lowest as inflation hasn’t kicked in to increase our income while our mortgage stays flat.

In terms of rentals, we can definitely do better short term. At the moment, WFH, we can move far into the south or east bay and get a house for $4500 – $5000 a month rent with more rooms and space. That is a thought as well.

But the tax savings on the interest for the first few years seems to equate to about $1k a month between federal and state taxes. Maybe less than that. But it’s significant enough that it makes up enough of the difference between a $5k rental and $6k home.

So $6k a month it is. That’s a scary number, since we’re paying $2500 a month in rent right now for our 1 bedroom. But if I’m ever going to feel ready for it, I feel ready for it now.

  • $1.6M home = $7000 PITI
  • $1.65M home = $7250 PITI
  • $1.7M home = $7500 PITI

Based on the above figures, $1.6M should be our absolute max, with my FIL. Unfortunately — anything worth buying here (that also works with my FIL) in the area we want to live is at least that.

Buying a Home and Compromises We’re Willing to Make

Here’s what I’ve decided are non compromises:

  • Under 1 hour drive to work: (I wanted 30 minutes, I gave up — hoping WFH is something I can maintain going forward, or eventually I get a job closer to the home we buy )
  • Larger lot (7500-10000 sq ft): Lot size is interesting here. You see $3M homes on 5000 sq ft lots. Some people don’t want large lots because they aren’t outside much in their own private spaces and don’t want to deal with maintaining a yard.  I get that — growing up on the east coast a yard was expensive to maintain, but it rained so the watering bit was usually covered, with the addition of occasional sprinklers. Still, a 5000-6000 sq ft lot seems limiting. We do (/would) spend a lot of time outside in our private space. A larger lot also means we have room to build onto the house should we ever have more money and want to make it bigger without going “up.”
  • A “vacation” in my house: Decent sized master bedroom suite with existing bath. This is definitely a luxury item. But my mental health is improved by privacy, space, and access to a soaking tub. If I’m going to be “house poor” I at least want to have a space at home that feels like the vacation I won’t be able to afford because I bought a house.
  • Nice street/neighborhood. We’re homebodies. On a good day, we make it to the neighborhood park, or a restaurant around the corner. There are a few neighborhoods I like, and I’ve decided it makes sense to focus our home search there.
  • Decent schools. School rankings don’t tell the whole story (they just tell you if non-native speakers go to the school), but I still find it concerning when non-native speakers are averaging a 2 on their state tests. So I’ve made the cutoff a 5 for school rankings in the area. My kids will be going to those schools. Not only do I not believe in private school, when we buy a house here we won’t be able to afford private school! Also, resale value is also impacted by the school ranking… so buying in an area with “better” schools helps later if we decide this house isn’t right for us and we want to move, or we want to move in retirement, or whenever we decide it is time to move on.
  • Enough Space Inside (1750+ sq ft): Can we live a perfectly happy live in a cozy 1300 sq ft house? Of course. But I don’t see the point in buying something so small– for us. We don’t need 2500 sq ft either. I’ve come the conclusion that 1750-2000 sq ft is perfect, especially with the plans to live with my father-in-law. It basically ends up being that we are living in about 1300-1500 square feet for a few years, and FIL gets 200-400 sq ft. But long term, FIL will move out, and we’ll have more space. That’s important to me as we’ll have at least 2 kids and possibly a third, if the stars align.
  • Family Room AND Living Room: having two main living areas is important to me. It’s a luxury, not a necessity. And it’s rather rare here. But with 2+ kids, having two living areas will be nice when my kids have friends over, and we want to be not all in the same space. Plus, having the extra room gives us flexibility long term (we can convert a family room to a bedroom if needed, instead of having to add on.)
  • Garage: we just need a place to store things (I’m tired of having my bike in the living room) and a spot to put a treadmill for my husband etc.
  • Nice to have — Laundry Room — this is a rarity here, but with 2+ kids, I want a laundry room (not laundry in the garage, or in the bathroom, etc)
  • Nice to have — 4+ bedrooms: This was a must have until I realized I really like big rooms and in a 1750-1900 square foot house with a good master bedroom, bigger master bath, and all of the above, a 4th bedroom is hard to find.
  • General good flow: some houses here… a lot of them… have very strange additions, poorly designed and unpermitted.

The house we are bidding on meets most of the requirement below.

  • $1.6M list
  • 1900 sq ft
  • 9000 sq ft lot
  • family room + living room
  • laundry room
  • giant master bedroom suite (they actually converted an existing bedroom into a bathroom, so you can imagine how giant it is. It’s a bit too big, but I can see long term changing the layout a bit and turning part of it into a home office
  • good neighborhood/street (close to restaurants and park)

What isn’t perfect about it?

  • It’s listed at $1.6M, they prob want $1.7M. I’m not sure they can get $1.7M — the neighborhood seems to go more $1.5-$1.6. A few houses are actually sitting for various reasons. That said, this house does have an oversized lot (for the area) so if anyone else has been waiting to snag a bigger lot in that general area, we may lose the house, or have to pay more for it. We are doing a preemptive offer before offers are due — which makes it hard to know if we’re over paying if they do accept the offer. What we have going for us is down the street there is a 2000 sq ft 5br/3ba listed at $1.7M that has been sitting. It’s a flip, and while it looks nice it was a poor flip job if you pay attention to the actual work done (they did it in a month — bought $1.25M and now it’s $1.7M!) But because that is sitting, I’m hoping a 3br/2ba house can go for $1.6M.
  • It has one giant master bedroom… and 2 teeny tiny bedrooms. That kind of sucks. It sucks most because our FIL will take the master bedroom for a few years, and we’ll be relegated to the two smaller bedrooms. BUT at least there’s the two living spaces. We’ve discussed putting our bed in the family room (it would be kind of like a studio apartment situation since it’s open to the kitchen and garage) and we’d put my son in one of the small rooms and my husband’s office (and possibly a guest bed–that I might occasionally sleep in) in the other small bedroom. Our baby would sleep in our room until s/he turns 1, and then baby either goes into my son’s room (they can share for a while) or my husband moves his office into the family room and we put baby in the other small bedroom. … … eventually, his dad moves out (it’s complicated but the plan is when my mother in law needs to move out of her house — which is owned by her 96 year old mother — she will buy a 3/2 near us, and my FIL will move in with her — they unmarried but friends) and we’ll get the master bedroom, my husband can probably put his office in the family room, or in the master bedroom (though I prefer he doesn’t have it in there, but there’s room if we need to make it work.)
  • While the lot is 9000 sq ft, it doesn’t actually look that large to me. I think that’s because it’s a wider yard and the houses next to it are 2 floors, so there isn’t a lot of privacy. I think we can add a little privacy, but we won’t be able to grow a tree big enough to block the neighbor from seeing into our yard. Which isn’t that big of a a deal, I just like having privacy and feeling like I’m in my own secluded little park. We can probably make it better, and at least there’s room for a swing set.

We probably won’t get this house. But we might. I’m trying to decide if it’s worth going up to $1.7M for it. If we can get it at $1.6M, I will feel good about the purchase. In the town we prefer to be in, we’ve decided not to bid on houses that have gone $1.7M. They weren’t as big or nice as this one, but if we have to pay $1.7M for a house 30 min further from my work, I start wondering if we should just go $1.8M to get something that works in the better area. But, no, I’ve run the numbers, and we really shouldn’t do more than $1.6. If we do $1.7 it’s over budget, but we can make it work.

So, what do you think we should do?

Home, Real Estate & Rent

Buying a House in Silicon Valley (Spoiler Alert: LOL)

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It’s been two years since we sauntered into our first open house. I brought us to a home selling for $1.7M list, and that would inevitably go for at least $1.9M more than that. I brought us there to see what we “couldn’t afford” expecting to be at least somewhat impressed.

Nah. The 1300 square foot 3br/2ba house on a 5000 square foot lot needed a lot of updating. Thus started our ongoing and continually more depressing adventures in buying a home in Silicon Valley.

Who the flying fuck can afford a $9k a month mortgage? That’s what these houses cost if you put down 20% (if you have $360k or so lying around for that.) It’s just frustrating that I DO have the $360k but a $9k/month mortgage for 30 years is not in the cards for us. On my husband’s salary we can afford about $2k a month which leaves me with $7k to cover–and god forbid one of us loses our job (given I’ve been fired 6 times it’s bound to happen.)

So we’re not really going to buy a house with a $9k mortgage. Either we have to save up a lot more for a giant down payment to get the monthly mortgage to about half that–or we’re not buying here. And… we are probably never buying here.

This makes me very sad, but I’m trying to get over it. It’s upsetting to know that where I raise my child/children will not be a home that will be filled with memories for many years to come–or that we won’t be able to make our home really ours in the way you can when you own a property (even though it’s a pain in the ass to do so and really is that how we want to be spending our time or money?)

Well, I definitely feel we’ve outgrown our 800 square foot $2500/month one bedroom apartment. I’m ready to move yesterday, but hubby wants to keep seeking out the perfect home–one that we can buy with his parents. Together we can pool our money and afford something and then live happily ever after on the same property, or so that’s what he’d like me cheerfully accept as our real estate fate. I hate to be Debbie Downer, but I’m not into the idea of living on the same property as his parents. I just want our independence and to deal with it being tough together as a team and I don’t know, maybe I romanticize that a bit but living so close to his parents just doesn’t appeal to me. Down the street? Fine. In our backyard or attached to the same building? Eh…

The problem is that if we’re not going to live with his parents, I have to figure out a strategy to earn more money for the long term. I basically just have to assume my husband’s income is $0, in case it is, and somehow come up with a plan to afford $9k a month, or something, that would be a realistic mortgage here.

Why don’t you just move? Yea, thought about that… but husband is committed to staying in the Bay Area, and I’d like to stay here as well if we can make it work. I’m starting to look at housing options in the east bay but I really don’t want to lock myself into 1.5 hr commutes each day in massive traffic.

So the most likely option is that we’ll look at houses until late spring then rent a bigger place by summer. House rentals are about $5000-$6000 a month, which will be hard to stomach, but that’s better than $9000 a month and at least if I lose my job we can get out fairly quickly. PLUS we can keep the $360k that would be stuck in a downpayment working in the stock market. Maybe houses will continue to go up in value here as much as they have in the past 10 years, but I doubt it. Who knows. I just think putting that much money into a downpayment is giving up on gains that one could have in the market. It’s worth it, for so many reasons, but if we can’t make it work I’m just trying to remind myself of the positives. Like, we can pick up and move for better jobs. We can rent in a crappy school district then move to a good one in 4 years when our son is old enough to go to kindergarten. We don’t have to deal with the many costs of home ownership. And such.

Yet I still just feel fucking depressed about not being able to afford a house. I know we’re not the only ones but it’s one of those things that makes me feel like a failure, even though I know not being able to afford $9k a month doesn’t make me a failure. I mean, it DOES, because I could be a VP already and spend the next 30 years earning $250k plus annual raises and bonus and whatever, but instead I’m insecure and can’t get my shit together to convince anyone I’m worthy of keeping my job, and I can’t convince myself of it either. I guess that’s the big issue. I’d like to completely change my career but doing that all but guarantees buying a house is impossible. It’s just all kind of nauseating to be where I’m at (and where I’m not) at my age–doing so well financially, yet also it not mattering at all.

 

Career, Career Change, Depression, Real Estate & Rent, Wealth

The Job Downward Spiral: There’s a Physics to my Employment

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Either I’ve done a better job overall this time around or things just move slower in public companies. I think it’s a mix of both. But now a year-and-a-half in and it’s clear I’m past the phase of newcomers victories and excitement and well into the phase of “I suck at this.”

I’ve been assigned a few larger projects to manage and after failing at one or two my boss was really hoping I could pull off the latest and greatest, but nope, I fell right on my face. Looking back I see a few areas where I could have improved, but overall I just feel lost. I don’t know how to help drive collaboration when I’m unsure what the expectations are. I did uncover these expectations along the way (and feel I could do a much better job managing a project like this next time) but the problem is I seem to keep missing the obvious and not getting what I’m supposed to be doing… which at my level, as my boss points out, is not acceptable. She used nicer words, but that’s what she meant.

The good(?) news is that I’ve been assigned a slew of projects that I HAVE been successful at. Unfortunately, these projects are one-off “do not make any sense on a future resume” type of projects. Maybe it’s time I stop caring so much about said future resume and just try to do what I do best–which is run with the punches and take on creative projects that no one else would have the foggiest how to manage versus trying to become a manager of cut-and-dry processes and failing time and again.

At 35, it’s no longer cute to fail or figure shit out. I should have it figured out by now and it’s clear I don’t. I’m scared because without resume-building projects I have no where to go after this. It’s hard to have that conversation with your boss because you aren’t supposed to be thinking about “after this.” And it’s less about moving up at this point and more about maintaining some semblance of a living wage once this job is no more. Maybe I’ll stay in this role until I retire with inflation-based raises, but that’s unlikely. I know my boss sees that I can do SOME things well (otherwise I’d be OUT already) but is that enough? I don’t want to be the easy to cut person in the organization and without adding clear value I’ll be cut sooner or later.

I just wish the last project didn’t end up the mess it was. I really don’t know how I could have done it all better. I still am not sure I could really do it better if I started over, which is the scary part. I don’t know how to get teams inspired to do great work, or to collaborate. Everyone seems to think I go off and come up with ideas on my own and decide everything without consulting others, but I keep asking everyone else what they want and I’m not getting any answers. I guess I’m not asking them in the right way. Or… they just hate me and don’t want to collaborate. I don’t know. My one co-lead on the project was super nice, but he also ended up driving things down a path that made it all more complicated and took away my control–which, funny enough, is what my boss wanted me to have… control to make the project great, but then also be collaborative and get everyone else’s input, but to lead. At the end of the day, I’m a shitty leader. But I’m not going to stay in a senior-level role without BEING a leader in my field. Independent contributor is not worth much and I’m way overpaid to be one right now. Good problem to have? I guess. It makes me feel like crap every day. I can’t even look my colleagues in the eye anymore.

I’ve set 7 time-based goals for myself to stay in the company and just try to survive. And by survive I mean do great work that keeps me employed, but also do not try to move up or gain resume-building experience… just do whatever my boss(es) want me to do and stop trying to do the things that would help me move up but do not come naturally to me. That’s 7 dates across 33 months that I need to survive and then, as long as there isn’t a major recession, I’ll have some sort of flexibility to figure out my next steps… I mean, not a ton of flexibility because if I have a mortgage and another kid, flexibility is out the window unless my husband is willing to move to a lower cost of living area and he isn’t.

It is just all so suffocating… I’m so fortunate for all I have and I know I’m in a much better spot than many others in this country, but I just can’t breathe. I don’t want to get caught in this self pity crap but I also don’t know how to be better. Once I start thinking this way it’s hard to focus and be productive. Every little thing I do I self doubt so much that I slow down my output and my output gets worse and worse until I inevitably get let go. Fired. Whatever. That’s what I do. It’s not funny. It’s not poetic. It’s just my life.

But with a toddler and wanting another child, it CAN’T be my life. I’m really fucking scared right now. I don’t know if I’ll ever see the day I have a. job where I’m not worried about getting fired. This is the best situation yet as the head of the department likes my work and has given me the opportunity to do projects seen by our senior leadership team, but that still doesn’t make me professionally immortal. And I know even if I can hold on for dear life these next 33 months, there’s still after that… if my resume has nothing on it other than weird projects that make no sense at another company, or would be comparable to what a much more junior person would do with a much lower salary, I don’t know what I’ll do —

I was talking to my husband and we agreed that our mortgage should be no more than $5000 with his father adding another $2000  in rent (basically $2500 for each of us per month plus $2000 for his father.) My husband really wants his mother to go in with us on the property but I’d prefer to buy separately and just have his father rent from us (his parents aren’t married, it’s complicated, but I am comfortable living with his dad if he is renting from us and it’s clean cut like that.) So we can put down $300k on a $1.5M property which is about $7k a month. That might be doable even if I lose my job, but it will be hard to maintain 30 years of a career that can support $2500 a month. And it’s going to be very hard if not impossible to find a place that costs $1.5M that has a good place for his father to live.

Ugh. When will my life not be a mess?

Home, Real Estate & Rent, Wealth

Another post on the impossible goal of buying a home in the Bay Area

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When I drive from point A to point B I’m often calculating various life possibilities in my head. As of late, my math is focused on determining what kind of mortgage REALLY makes sense for my family. I figured $8000 a month DOESN’T make sense, but given prices of housing here are ridiculously high, I was hoping to at least get a number that felt somewhat doable.

Even though our household income should be over $400,000 this year (as long as I maintain my employment), there is absolutely no way to guarantee we’ll come close to this every year for the 30 years ahead. With my husband making $90k 1099 (I consider that $60,000 salary equivalent since it has no benefits and is taxed at a higher rate), and my income ranging in the past 10 years from $150,000 to $400,000 (total compensation), I feel fairly comfortable committing to $200k total family income for next 30 years–a combination of my husband staying in his job OR getting a job with benefits with a $60k salary minimum, and my having a job making at least $150k a year on average (which seems reasonable based on the various offers I’ve received in the past.) Theoretically our income would go up with inflation and more experience, but my husband has never asked for a raise and is not inspired to take on more clients beyond his one client, and I am fairly confident I’ll have to take a pay cut over and over again to remain gainfully employed, not to mention that I’ll likely take some time off to have kid #2 (and #3?) Plus, I figured out recently that we spend about $3500-$4000 a month not including housing on our lifestyle. Sure, we could be more frugal BUT I don’t want our housing to get in the way of being able to travel to see my family, see the world, send kids to summer camp, etc. I don’t think our lifestyle costs will go down that much as our kids get older–we’ll cut in some places and add to others.

So $200k a year in salary is $16k a month. If we max out our IRA/401k, that’s about $3k a month, leaving us with $13k pre tax, or about $8k after tax.

I think planning our next 30 years based on $8k after tax income makes a lot of sense. It still feels aggressive and scary to commit to anything based on it, but it’s not unreasonable.

If we make $8k in after tax income and our monthly expenses are $3500-$4000 a month, then we have $4000 left for a mortgage OR rent. Of course a mortgage is fixed while rent can go up over time… but let’s ignore that for now and just say that we can afford a $4000/month mortgage (including taxes, etc, esp since there are no meaningful tax deductions for real estate anymore.)

If my math is correct, IF we can put $600,000 down (50%) we can afford a $1.2M home.

But we don’t have $600k to put down, and the opportunity cost on putting that much of our life savings down will basically kill our retirement. We can put down less but then our monthly costs go up, which would significantly impact our lifestyle.

Even if we got our living costs under $2500 a month, that leaves $5.5k for a mortgage, taxes, etc MAX. That seems like better math… a $1.2M home with $300k down (more reasonable at 25% down) would be about $5.5k a month. BUT I don’t think we can find a house for that in this area — if we buy a condo, then condo fees would be on top of the mortgage, meaning we could afford less in a condo than in a house (sort of… maintenance costs in a house would eat up the HOA fees and then some.)

I keep running the numbers and I just don’t understand how anyone can afford a house here. I’m terrified of being stupid about this and buying something far from perfect for way too much money because I really want to own a house. It just doesn’t make sense.

I wish I could have a rational conversation with my husband about this. He just wants his mother to gift him the money and then we’ll live with his parents for the rest of forever. I want to find a place WE can afford on our salary without his parents living with us. He isn’t willing to consider getting a job that pays more and I can’t commit to earning more than $150k a year for the next 30 years.

My thought is that our best strategy right now is to rent a 2br/2ba and stay there for a few years and wait to see if our savings increases or what happens, but he’s pretty adamant about not renting. He makes me feel pretty crappy about not wanting to commingle my savings with his mother’s money (even if she is “gifting” it to him.) It’s beyond a matter of pride, though that’s part of it. I just want to have flexibility and once we buy with his parents we’re stuck for the next 30 years.

We could rent a 2br/2ba for $4000-$5000 a month now.

We could stay in our 1br for another year (or two, depending on when I get pregnant) — for $2500 a month and continue to save. Once we hit $3M in net worth, I can see putting $600k down on a house as we’re still diversified. But $600k on $1M in networth is too much.

That said, we’ll probably have a recession in the next year or two and our $1M will be worth a lot less. So selling stock now to buy could be a good move… or will housing prices come down with a recession? I wish I had a crystal ball.

 

Real Estate & Rent

Another Sunday, Another 20 $2M houses

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They range in price from $1.4M to $2.2M — that is, houses that in any other part of the country would range in price from $200k-$600k, but in the Bay Area are priced beyond comprehension. I took a solo day of open house touring to check out a few on the “lower” end of the range that I thought might work for myself, my husband, my son, my future child(ren), my husband’s dad and my husband’s mom. You know — a 1500 square foot 3br/2ba on a lot at least 6000 square feet with an accessory dwelling unit (ADU) that we could all live in together as one big happy family…

I even started, in previous weekends, exploring further south (as in San Jose) – but prices aren’t much better there. You get a bit more for your money space wise, but you’re still spending $1.5M+. For a 2 hour commute to SF, you can possibly find something for $1.2M. It’s just extremely depressing and every day it weighs on me. I constantly text my husband “let’s move to NY” and I’m partially serious but he’s very serious he doesn’t want to leave. He’s right that with his mother and father we can afford something here. And I do want to stay but it’s just too much pressure if he’s going to continue to make $90k freelance income per year without asking for a raise or seeking additional projects –though his flexibility is helpful with childcare, but not so much with home buying.

I know, I know – we should keep renting. We’re fine in our 1 bedroom right now (which at 800 square feet and $2500 rent controlled to inflation is a STEAL!) When I have kid #2, we can move to a 2/2, which will likely be $4500/mo, but that is going to be in at least 21 more months. (hopefully) as I don’t plan to get pregnant again until May. That’s nearly two years of saving $$$ living in a one bedroom if we can survive it.

But I’m still just a train wreck over the whole “so this is it” mentality I have now… this is it… I’ve “made it” – heck, this year I may bring home over $350k in total income – and yet there is no way I can buy a house as my career won’t consistently deliver $350k / yr in income. I’ll be back to $150k in a few years probably and we can’t afford to buy on $240k income. I don’t know how anyone does it.

I’m trying to just let it go… to stop wanting so much because I know that’s what makes me unhappy, and outside of feeling a little distraught by the state of my bedroom (because it includes my husbands office and looks like a college dorm room in terms of furnishings), I’m pretty happy where we are now. I wish my son had an outdoor space to run around in,  because we don’t get to the park often enough and our balcony isn’t safe for him – but he has the entire living room floor as his toy room. There are no stairs (inside our home anyway) for him to hurt himself on. We have a pool in the apartment complex I’ll definitely be enjoying with my son this summer. So it’s not all that bad.

I just don’t see how I go from where I am now to that next step. Buying a home is probably the wrong move financially. So we wait. We wait and probably get more and more priced out of the area until we have to move. Maybe that’s the strategy now. I wish it didn’t have to be. But these $2M houses make me spit out my water and laugh so hard… $2M should buy you luxury and I don’t think I’ll get over that to buy a home in that price range, nor can I get over spending $1.5M to buy a fixer upper on a not-so-great street. So, yea, for now, for-ever?- we rent.

Networth

New Goal: $1.3M Networth by 2022 (age 38)

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In 2008 or so, I had $29k in total net worth. Ten years later, my net worth closed out the year at $625k. Ten years ago I couldn’t fathom having more than $100k in a bank account. At age 24, I was just getting started in my career, making very little, and wondering how on earth to save money.

I started out ahead of many–a college degree with no loans. I’m not sure I’d be where I am today or even close to it if I had massive loans to pay back, because that would have not only cut into my savings, but also likely prevented me from taking some of the risks I’ve taken over the last 10 years that helped me save so aggressively. But, I do try to take a few moments to be grateful for what I have, and how much I’ve been able to save–despite not being able to afford the high cost of living in the Bay Area.

Today, I’m especially grateful that my current path has not only enabled me to hit my goal of saving $500,000 before giving birth to my first child, but also is looking to possibly support my second goal of saving $1M before my second–which was a long shot just years ago.

Screen Shot 2019-05-11 at 9.26.43 AM

The last few months have been especially fruitful, thanks to vesting stock–my first stock vesting period working for a public company–and selling it off immediately. I do not include any unvested stock in my networth calculations since if I lose my job that $ isn’t real. But it’s hard not to fantasize about it being real–even with it being not that much once taxes are taken out–it’s still a substantial amount and can be life-altering given my whole financial strategy is save as much as possible as fast as possible… not for FIRE, but for financial freedom (working PT, consulting, or pursing more risky opportunities, or those that don’t pay as well, in order to help others and/or just spend more time with my family.) And I won’t give up a decent lifestyle today to assume that I’ll have enough money for a frugal one “tomorrow” that doesn’t require working. I want to LIVE today but support a future where I’m not worried about money and can afford a decent lifestyle with a family.

I’m still uncertain what my “number” is. At last estimate it was about $4M-$6M, including a house worth about $1.8M. I still don’t think I’ll EVER get there, but as I set new financial goals for myself along the way, it helps to keep focused on these mini wins towards this major goal. Even if $4M is my “goal” that’s far off.

I had said I wanted to hit $1M by 40. Right now, I’ve sped up that goal to 38 (I’m 35 and a half now.) Within the next 3 years, I’d like to get to that $1M mark. A lot will depend on the volatile markets — if we have a crash, there is no way I’ll get there. If they stay stable or keep growing, there’s a good chance…

  • April net worth: $847k
  • Remaining 2019 stock value after tax: ~$92k
  • 2020 stock value after tax: ~$123k

With saving my stock amounts, and with the markets staying stable, it’s quite possible I’ll get to $1M even earlier… by 37… which actually is my goal since I want my second kid by 37 and I would like to get to $1M before I give birth. I won’t feel any richer for it, but I think with $1M in the bank I’ll start feeling ok about taking a few more risks when it comes to buying a house. Ideally I’d have $1M in the bank (investments) plus enough for downpayment and closing fees in cash. Perhaps I can get there in 3 years. That requires saving $500k in 3 years, or $150k per year.

  • 2019 (35): $92k (stock) + $25k (interest) + $35k (income savings) = $152k
  • 2020 (36): $123k (stock) + $25k (interest) + $35k (income savings) – $50k (IVF) = $123k
  • 2021 (37): $123k (stock) + $25k (interest) + $35k (income savings) – $20k (preschool) = $153k

Total end of 2021: $1.275M. Not quite $1.3M, but close. Close enough where at that point I’d be willing to put $300k down on a $1.5M house and have $1M in the bank as a safety net.

Past 2021, my savings will go down again… my stock will be vested and it’s unlikely I will find another job where I make anywhere near this much. If I can keep this job until the end of 2021, I just realized… I’ll be really close to my goal–my new goal– $1.3M by the end of 2021.

BUT – big but here – is that to do that, we need to stay living in our 800 square foot one bedroom apartment rental for the next 3 years/until I have my second child. Maybe that’s crazy–but it won’t be that bad. If it means in 3 years we can buy a house and feel financially stable (ish) then it’s worth it, right?

Real Estate & Rent

Against a Wall: HCOL and Those Golden Handcuffs

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Driving to work in traffic the other day, I kept thinking–how am I going to do this for another 30 years? Even with splitting the cost of a $2M home with my MIL, we still end up with a very high mortgage that means I’m at best stuck working high-stress jobs that pay well and at worst burning through my savings faster than my baby lunges for my chest when he’s hungry.

There are parts of my current job that I like. My boss is actually really awesome. I know I’m always a heartbeat away from falling out of favor with her, but she’s a good person and I like to work for people who are not self-absorbed sociopaths. She’s just really good at her job and also really good at all the things I’m not — being poised, being a leader/executive, managing lots of things at once, staying cool under pressure, et al. Luckily, she also respects my skillsets–despite surely wishing I was better at being a “professional” my value add is, well, valued. It feels good to be valued. I wish I could be a perfect employee, but I’m far from it, and after this chapter is over it may be my yet-again downfall… but at the least I’ll walk from this one knowing I’ve done some good.

Yet at the end of the day, I know this isn’t sustainable. I’m in survival mode… and we all are, because that’s how business is run these days. Maybe in government jobs things go slow… but we don’t have time to stop and think and be super strategic we just have to go go go. For all my shortcomings, I can take some pride in my ability to be flexible in these types of environments. I know not everyone can perform when every day is another day of fighting fires and not enough time to get things done. But somehow I do get things done. It’s usually the last minute–which I want to be better at–but they get done.

I can do this for a few more years at best, but with one kid and hopefully with another one or two in my future, this can’t be my life–at least, not forever. And the hardest reality to face is that even WITH this being my life, I still cannot safely afford a house here… not even a townhouse or a condo within 45 minutes of work (or at least I think I can’t afford one… it’s so hard to gauge what’s affordable because it all depends on making a crazy amount of money via bonus and stock. Sure, my next few years, if I can keep this job, will be quite lucrative – but that doesn’t mean 30 years of such high pay.)

My husband is pretty adamant about not moving into a condo or townhouse… he wants a house. He wants to pay $2000 a month for the mortgage from his income, wants his dad to pay $2000 a month, wants his mom to put down $1M in cash (possible) and wants me to make up the rest… which will be anywhere from $3000-$6000 a month for a house that we all live in together. But, houses cost more than the mortgage and taxes. There’s fixing up and fixing in general. Running the numbers, the picture looks so unpretty.

I’m sitting in my 1 bedroom apartment thinking– how long can we last here? It’s certainly the safest way to live right now. In our $2500/mo 1 bedroom, I’m saving a lot of money. Worst case, we rent forever. Best case, the money I’m saving and investing in the stock market goes up to the point I have enough for a sizable downpayment on our own place without needing his parents to buy with us. But then there’s the whole matter of him WANTING to live with his parents. Ugh. Is this why marriage is so tough? I’ve spent my whole life trying to obtain independence and I know it’s nice to have grandparents nearby but I’m not so sure I want them literally in our backyard…

My realtor has pretty much disowned me at this point. I feel bad because she spent so much time with us taking us around and showing us houses but at the end of the day I can’t buy a $1.7M home that needs a lot of work. I can’t buy a $1.2M condo that’s a 2 bedroom and needs little work because it’s a 2 bedroom and why would I buy a 2 bedroom condo when we want more kids and will want more room?

But we’re stuck. We can’t leave… well, I can’t leave because my husband refuses to leave and I don’t really want to and we have, at least for now, free childcare here so why would we leave? And our friends and his family are here. And there’s no where else we want to go. And my job and my 10,000 recruiter emails are here (there have definitely been an uptick in recruiter emails lately- mostly from San Francisco-based companies.) So. Even if I won’t always make $250k+ a year, I still will likely be able to get jobs here making $150k+. But that’s NOT ENOUGH to live here when your. husband makes $90k 1099 and especially when you’re prone to losing your job for a few months every few years.

It’s just super depressing and I feel like a spoiled brat every time I talk about how depressing it is… I’m so lucky… I need to learn to be grateful and get over it, right? But it is suffocating–the way we work. The way we’re expected to work all the time and because I can’t do that effectively right now even if I wanted to because I have a young child then I feel like I’m letting everyone down because I can’t get through all my work at the office (and I’m half asleep all the time to add to that.) I could try harder. Be more organized. More focused. Drink more coffee. Wake up earlier. I don’t know. Again, I’m in pure survival mode… but that’s not living. That’s hoping and holding your breath that you’ll make it three more months to vest another stock grant. Another chance at maybe being able to have a future here.

But what is that number anyway? The “number” — net worth number– is probably far to large to ever be possible. My husband and I have a joint net worth now of $925k (about $800k of that is my savings.) That’s SO MUCH MORE than I ever thought was possible to save. We’re close to hitting $1M! That’s insane. So why do I feel so broke? Maybe I should take more risks. Buy a house and figure prices will go up… that inflation will make $9000 a month in mortgage seem sane in a few years down the road? With my mental health situation and now with a kid, I just can’t take those kind of risks. Not with $1M in the bank. Maybe with $2M in the bank… or $3M. I’m not sure how many million but definitely more than $1M. Ideally enough to buy a $2M house outright with $1M in retirement savings, so $3M seems about right.

So if I (we) add $50,000 a year cash to our investments, assuming $800k is invested now, in 16 years at 5% YoY interest we’ll have $3M. Of course by then houses will cost a lot more than $2M. That doesn’t work. If we add $100,000 a year, then we have just 12 years to wait… but then in 12 years if a $2M house increases in value 4% YoY the house will cost $3.2M… nope, that doesn’t work either.

I know everyone says just take your money and move somewhere cheaper… but let’s assume that’s not an option. Then what do we do? The house we wanted for $1.7M (that would require about $400k-$500k work) is still available – hey at least I called it as being over priced. But, it will be gone soon enough. The market will get competitive again. Now is a “good time to buy.” Another house we looked at was shown one weekend and gone by the next. Most decent properties still go that fast around here. And I still don’t want to live with my husband’s parents so… my only option is figuring out how to save $300k for a downpayment AND how I can afford $5,500 a month while my husband pays $2000 a month ($7500 total.) That’s what a $1.5M house costs, give or take. $300k down and $7500 a month (at 4% interest, so it’s prob more than that depending on when you buy.)

I could sell $300k (+ capital gains tax) worth of stock AND just commit to paying $5500  per month on my own for the next 30 years (and hope my husband can keep doing $2000 a month.) I need to keep saving because if I need to take unpaid leave or god forbid lose my job for a few months (which will happen, let’s be real we’re talking about me here) then… well, I need enough cash to cover $5500 a month for about a year, so $66,000 cash, not counting general emergency fund. And where does the money come from to send our kids to preschool? Or after school activities? Or summer camp?

The numbers just don’t add up.

Ok, so let’s say… probably more realistically… we buy a $1.3M condo (priced at $1.2M, but it goes for $1.3M because that’s how real estate rolls in these parts.) HOA is something like $333/mo. Some are higher, some lower, but that’s about average. It could go up. There could be a special assessment. But nonetheless… with $333 / mo HOA and a $1.3M condo/townhome… that’s $260k down and $7000 a month… so I’m still paying $5000 a month, just $500/mo less and $40k savings on the downpayment. Substantial, but then the value of the home won’t go up as much because it’s a condo.

Or, we say… you know what, we’re going to move to the east bay because houses are cheaper there. We can get a house in a decent but not great area for $900k. Phew.  Our downpayment is JUST $160,000. Yes! Doable. Our monthly payment is $5000, leaving me with JUST $3000/month to pay. This looks a lot better. But then I’m paying $6 a day for bridge toll ($120 / mo) and commuting an hour or more to work each way – maybe more, if I work in the city again one day. Still, not so bad. But, wait, then we have to add in childcare because my husband’s parents do not drive and can’t get to us. So that’s $2,000 a month, if not more. So then we’re back up to $7000 a month anyway… and that’s with just one kid (I know, this is just for a few years… but still, it’s the years the $ costs the most before inflation kicks in and makes the mortgage somewhat ok.)

How the fuck do people do this?

Maybe we should just suck it up and buy a $900k home in the east bay and pay for childcare and drive to see his parents on the weekends. That’s probably what normal people would do. Or they’d move to Denver. Or Austin. Or Boise. Or Portland. Or Raleigh. Or anywhere else things make mathematical sense to live.

Welp. That’s my rant for the day.

 

Anxiety, Mental Illness, Real Estate & Rent

The Things that Matter: American Workaholism and Being a Mom

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It’s 5am and I am exhausted but can’t get back to sleep after my son woke up screaming for milk a few hours ago. He didn’t actually drink that much. My breasts are still engorged and I’m too tired/lazy to pump. I’m supposed to “wake up” for work in an hour, to make myself presentable for an 8am meeting. I’m not doing the best job of being presentable given I’m so exhausted and no amount of coffee will help.

But my exhaustion isn’t just due to being woken up in the middle of the night. It’s the hopeless exhaustion of now being in the midst of the roller coaster of life, with time both going too fast and too slow, and memories of long gone childhood reminding me that life wasn’t always like this–always so formulaic in its requirements for supporting basic sustainability of existence.

My fear to pay more in rent a month isn’t helping. My fear of running out of money, or, more so, of getting to the point where I have a nervous breakdown and do not go into work one day because I can no longer stand the majority of my waking hours being dedicated to trying to get people to buy a product that–very successfully–helps companies reduce their workforce (though that’s not its primary purpose, but like most tech for business these days, it’s one of its benefits.) Oh, it’s a great product and it’s exciting to be part of a company that’s growing and a team that is not in it to change the world despite also building products that reduce headcount (the idealism of startups was nice for a while, but it also feels good to be part of a team that doesn’t entirely live and breathe work 24/7.) But, at the end of the day, always the very long yet never long enough day, I sit in traffic on the freeway for 45 minutes with all the other commuters headed home and talk to my 6 month old son on the phone who is crying and anxious for mom (well, for mom’s chest anyway) and who doesn’t care that I’m sitting in traffic or that I have to go to work to make enough money to try to save so maybe one day we can buy a house and go on vacations and such.

The reality is that my situation is so much better than 99% of the world, maybe even 99.9% of the world, and I’m still, well, not happy. I don’t know if I have the capacity for sustained happiness, given it’s me we’re talking about, but I’d like to not constantly live in fear. I acknowledge that buying a house with monthly mortgage payments will heighten my anxiety immensely. If we can make it work to buy a property with my MIL and FIL, and keep our monthly payments closer to what we’re paying now (or at least what we’d pay in rent for a decent 3br/2ba apartment), then maybe that’s ok. But then there’s all the other issues that come up with home ownership. It’s terrifying.

But then I’m also sitting here, 35 going on 40, realizing that there is no “when” at this point in life. I’m past the stage of saving and waiting. It’s now or never. I have a kid. I have a job that is as stable as my work will probably ever be. I have a husband who may return to school to make even less than he does now, but at least he’ll get benefits in case I should lose said job. Why not just take the leap? Have some stability for once? I’d like to give that to my kid. He won’t remember his first year of life, but I’d prefer not to jump around from rental to rental throughout his life. I know it’s not the end of the world, but I grew up in one home from 0-17 and although moving once or twice in that timeframe is ok, moving every year or every other year is best to be avoided. I want to meet my neighbors, I want to feel like we’ve “made it” by having our own backyard, however small it is. Our own kitchen and bathroom and walls and tiny storage area so my bike doesn’t have to live in our living room.

I’m tired. I’m tired and unhealthy and I know my body is upset for it. I feel myself aging too fast. I’m not finding time to work out and my diet has gone to complete shit. There’s so much I want to improve, but for now, I’m barely getting by.

Real Estate & Rent

Home (Bitter) Sweet, $2M Bay Area Home

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I haven’t written in a while, because as a new mom working full time, there isn’t time in the day to do much other than work, feed (a baby), eat and sleep. And even that last one rarely happens these days.

A lot is going on with our finances these days, so I have plenty to write about, but I’ll focus here on our recent quest to purchase a house in the Bay Area. In short, it’s not going well. I just can’t accept that we have to spend $8k a month on a mortgage for the next 30 years in order to afford anything remotely decent in the likes of a 3br/2ba house. And the market isn’t even at its hottest these days.

The big question right now is whether or not we go in with my husband’s parents to purchase a home. In theory, this is a good idea, since his mother has $1M for a downpayment and his father can contribute $2k a month to the mortgage and bills. That would help a lot if we get a loan for, say, $750k on a $1.7M home. And, you’d think you could find a house with enough room for $1,7000,000. But – we’re in crazy land here real estate wise, and while $1.7M gets you more than a closet, it’s not that much more (and the closets, well, they aren’t big enough to fit much of anything.)

Anyone learning of our situation wold say — why don’t you live further from your work, or, heck, move to another state? Yes, all possible, but not what we want. I already feel like I live too far from work with a 45 minute commute one way and I barely see my kid. If we HAVE to, yes, I can do a 1.5 hr commute one way / 3 hrs RT but — then I get into the philosophical question of WHY. I don’t like my career to begin with, the reason I am working in it is because it pays well (at the moment, really well.) But that won’t last forever. And if there’s anything that gives me a panic attack, it’s committing to staying in this career (and somehow remaining gainfully employed in it) for the next 30 years.

I’m really not sure what to do here. My general thought is this:

  • Try my best to keep my current job for 34 more months, which is netting about $300k/yr pre tax for next 3 years
  • Stay in our $2500/month 1 bedroom apartment until my son is 1
  • Move into a rental 3br/2ba house closer to work that my father in law can also live in (requires a lot of looking for the right place, since he would need a private entrance to his room and ideally his own bath) — about $6000/mo ($4000 / mo for us, $2000 for his father)
  • Live there for the foreseeable future and save as much as possible
  • Either get promoted at work into a role that pays even more and that I can see myself in for next 30 years (unlikely) OR just keep saving until we have enough for a sizable downpayment to keep monthly payments low OR move far far away and never look back

The only reason why it makes some sense to buy a house now is that my mother in law has that $1M in cash earning basically no interest at the moment, so putting that into a house would at least allow that money to keep up with inflation, probably. It would even make sense for her to loan us the money and for us to pay her interest on it. Either she spends it then on something she needs in her life, or one day it comes back to us as my husband is an other child. Either way, it feels better than taking the full $1M and putting her in a tiny in law unit on the property without its own kitchen. She might not care, but it just feels wrong.

We did meet with a real estate agent and I’m running out numbers with a broker to get pre approval. I’m shocked that without my MIL’s $ for a downpayment, it still looks like we can qualify for a $1.8M variable loan, give or take. That’s insane to me. I know you don’t have to take as much as the bank offers you, but that’s basically a $9k a month payment. Since they aren’t counting my bonus or stock – that’s somehow assuming we can pay $9k a month on about $10k after tax. It makes no sense. And we wonder why we have housing bubbles that go bust.

I’m trying to avoid the emotional side of me that wants to BUY A HOUSE NOW. It’s being amplified by knowing that my mom has to sell my childhood home, and even though I’ve lived in apartments now for many years I always had a place to go back to that was my home. With that house being sold, I don’t have a home any more, and that makes me feel icky. Not icky enough to make a stupid financial decision, but icky nonetheless.

I hired a CFP to help us figure this all out but I am pretty sure I made the wrong decision in who I hired as we’re way too confusing for him – he’d be good with a straightforward couple who both earn tech salaries and will likely earn those salaries for their entire careers. That’s not us. So I’m pissed at myself for picking this guy. He’s not bad, but he’s not flexible and he doesn’t think outside the box. We need some flexibility here. And he’s supportive of buying the home now, but I’m not so sure he should be.

In any case, we’re working on pre approval then will decide what to do. I’m kind of hoping we find a 3br/2ba home for $1.2M that we can buy and live in with my father in law, with his $2k / month going toward mortgage/taxes, and then his mother can find her own similar property when she has to move in the next few years (when her mother passes away, the property will be sold and income split amongst the 3 siblings.) At that point, she should have about $1.5M in cash or more and she can go out and buy a small house with a nice backyard and we can have our $1.2M tiny house that we work to fix up and make our own. That’s really the best plan, I think, though finding anything half-way decent for $1.2M is pretty impossible here. We could get a 2br/2ba condo, but that doesn’t make sense since we want to have more kids and that wouldn’t allow us to grow our family or have guests over. So I’m hoping we go for a $1.2M house close to my work, we can make that work with his father so that covers taxes, at least for a few years, and we do our best to make this home our own. I really think that’s the best way to go about things, if we don’t just stick to renting.