Not to hijack the conversation, but the following line really struck home with me but in a different way:
"Lots of people think they want to start a coffeeshop. They likely don't. That's like buying a minimum wage job for two hundred grand."
This is very similar to what I said about buying a home in Silicon Valley. In the nice areas like Palo Alto, the homes around > $1.5MM. If you don't buy a house in a good school district, you need to spend $1000-2000/month on private school, which is I suppose how the price of the homes in PA got inflated.
Anyway, I told my wife, "If we were to buy a $1.5MM home in PA, first off we need a downpayment, which is roughly 500k. Then, after the triumph of saving half a million, we are rewarded for all our hard work by exchanging this for a 1MM mortgage."
In the same way as the coffee shop example, the economics really need to make sense, otherwise it's a terrible investment. As long as we are living in the Bay Area, we will rent.
Being house-poor is extremely common in the bay area, to this day. It totally baffles me as to why people keep doing it. My only guess is that people are more economically irrational than I'd like to believe.
"Lots of people think they want to start a coffeeshop. They likely don't. That's like buying a minimum wage job for two hundred grand."
This is very similar to what I said about buying a home in Silicon Valley. In the nice areas like Palo Alto, the homes around > $1.5MM. If you don't buy a house in a good school district, you need to spend $1000-2000/month on private school, which is I suppose how the price of the homes in PA got inflated.
Anyway, I told my wife, "If we were to buy a $1.5MM home in PA, first off we need a downpayment, which is roughly 500k. Then, after the triumph of saving half a million, we are rewarded for all our hard work by exchanging this for a 1MM mortgage."
In the same way as the coffee shop example, the economics really need to make sense, otherwise it's a terrible investment. As long as we are living in the Bay Area, we will rent.