Housing as % of Income

I don’t know what my income will be for 2017, but assuming everything goes according to plans…

  1.  Income going up… always a good thing
  2. In absolute terms, relative “rent” is about the same as went I graduated from college ($550 vs. $500… not considering inflation in the last 10 years).
  3. “Rent” vs. Income is at a very low level and on a good trend line.  The only way I’d be able to get it lower is if I lived with someone and charged them rent.

#1 is good and #3 is good.  I’d like #3 at $0, but what can you do?  #2 isn’t the greatest.  I mean, it’s pretty good, living thrifty like a college student, but I like to improve, not just stay the same.  However!  However.  For that same amount of money, I am getting a way, way better place than the attic I rented after graduation.  Considering that in the big picture, paying < 10% of my take home pay on “rent” — it’s okay for me to have some lifestyle upgrade in the category, especially considering that I’m not even sure the market offers anything with same commute, local grocery, etc. at anywhere near what I will be paying.

Relative income is done pretax.  But Rent/Income is done with take-home pay.  When I consider ratios and affordability stuff, I always try to be conservative.  Maybe I should be doing relative income as take home pay also… basically, taxes, so it would just tamp down the growth amount, which would be less encouraging.  So I use pre-tax!  😛

Screen Shot 2016-01-20 at 7.31.49 PM.png

And here are the details:

Screen Shot 2016-01-20 at 7.36.23 PM.png

Several points:

  1.  Renting in San Francisco is fucking expensive
  2. Salary increases become less effective over time b/c of increasing taxes
  3. The move to Menlo Park meant a much better commute.  I should have just moved down there instead of to the second SF apartment… but I still valued living in SF because it was “cool.”
  4. Condo has a better ratio than SF even after the salary downgrade.
  5. b/c of taxes, getting a room mate now is by far the fastest way to offset condo costs

At some point, I need to do an analysis of what housing costs are required for what kind of career moves.  Like, if I was a standup comedian, what would I need my housing to be?

Isn’t this blog post hilarious?

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