Ya probably should have included those. Interest tax deduction helps lessen the impact though. However you can still get great returns especially considering most mortgages are in the 80-95% leveraged ranges.

I think this works out well because the people who make a lot of money are pretty generous with their money (happy to chip in a little more at an expensive restaurant), and those who don't make a lot of money, aren't freeloaders (never claim to forget their wallet, or forget to pay back even $10. For example I lent a friend $15k that I agreed to let them pay over 4 years, interest free, they didn't miss a single payment). It helps that we've known each other for 10+ years, so way before any of us were making serious money.

That said, when we aren't traveling, we have a lot of interests that don't cost a lot of money ... watching sports games at someone's house, BBQ-ing/cooking, bouldering, playing video games, hiking/camping, etc. When we go to Vegas (couple times a year), we have a few people who gamble $200+ a hand at BJ, so we end up getting pretty good room deals. Then the big earners will always make some crazy sportsbets for a few thousand $ payoff (Like Lehigh > Duke) and use the winnings to pay for a big meal for everyone (and really don't mind). I also get a 40-60k bonus every year, and pay for some $2-3k meal for everyone, which is totally fine IMO (I mean its just once a year and its nice to spend money on friends who are appreciative).

In general, all of us are also pretty good at saving money (no one has any CC debts or student loans AFAIK (mostly because we are asian and our parents paid for college)) so we can take 3-4 big trips a year (NYC, Whistler, NO, etc) without it having a major effect on the long term. That said, some of the low earners are still in school or right out of school, so they should eventually reach income parity. But at the end of the day, income rarely comes up. Maybe someday in the future it will become a major issue, but I'm optimistic that it won't.

Ah, now I see where our base assumptions differ most. I believe there are only very few careers (out of those leading to a 100k+ income anyway) where that benefit is not essential. The frequency of moving around may change drastically depending on your field of choice, though.

And you're absolutely right, most relocations are not decided on owning RE or not. But the overall cost of relocation is considerably higher for an owner.

Interesting stuff but we're completely derailing this thread. I'll keep a low profile unless you state something I absolutely have to disagree with.

Very true. Me too.

When I lived in KC everyone paid the same because everyone had about the same amount of money. When I moved to SF and now LA, the people with good jobs or family money (which no one I knew had in KC) tend to pick up the tab a little more for the people out of work or with ****ty jobs.

I am not American so I have no idea if this is true there but wouldn't you be required to pay insurance for a high leverage mortgage?

To do a proper rent vs buy you need to get really personalized. Someone who is just going to keep the money in a bank account has a very different opportunity cost than someone who can invest the money. The type of property you want will also greatly impact the decision because in most markets the higher you go up the property market the lower a percentage of the property value rent represents so even in the same market just changing property classes changes the answer.

I'm of the opinion that for the majority of people rent vs buy is very close -- there are exceptions for which rent or buy are a big advantage to the other but for most it is not significant.

We can debate benefits and drawbacks of house ownership all we want, but the fact is that home equity is where a huge chunk of people's wealth resides.

Yes, house ownership is less flexible. But most people do not want or need flexibility. When you have 2.2 kids and a dog, the last thing you want is a 30 days notice in your mail because your landlord wants to do something else with their property. It's a PIA to move anywhere - house selling is not that difficult otherwise. Plus, if you are one of the people earning 100K jobs, chances are that your professional network is mostly local too. It's unlikely that the next job opportunity will be half way across the continent. Next opportunity will probably be based on your friend in the company from the office building next to your current office building.

A lot of the replies here are very personal in nature and they are not representative of the norm. The norm is that 6.61% of people earn 100K+, mostly in big cities in a handful of careers. That's reality.

You can make 100K+ doing virtually anything you please, anywhere you please. But depending on your life choices, it's going to be much easier or much harder.

Really, is that true? That's an honest question to others as I lack sample size.

I obviously only have my network as reference and my peers are spread all over the place. So even if I did get a job directly through them, it'd be more than 300 miles distance on average. The same goes for the people in my network who have changed jobs. A few were able to change locally but most took a job several hundred miles away.

Additionally, I have landed my last 3 contracts through the skills on offer in combination with a very good recruiter I've been working with exclusively in the past few years. And a good-enough interview with the clients, I guess. Now that I think about it, none of my stints were earned through direct network connections. Maybe I'm just doing it wrong...

Completely untrue for anyone I know making >$100k under 35 across a wide array of industries. People I know tend to bounce between LA, NYC, Seattle and Austin. Somewhat holds true for the people I know over 40.

I would be more inclined to think that someone who made more would have a farther reach in terms of network.

And the numbers would look even worse. His 6% return was like 1960-today. What do you think the average 30-year mortgage rate was during that period? I wouldn't plan on beating inflation except in the strongest of housing markets.

I'm age 30 and had $128K of W2s last year (which is fairly typical of the last few years). I work in engineering.

My professional network is confined to about a 50 mile radius just north of Denver with a few stragglers in LA and Silicon Valley. The only reason I would leave my current location is if I was switching sub-industries.

Oh, and LOL at all the real estate calculations. Any look at real estate investing that doesn't factor in the US demographics (which say we're headed for a decreasing number of occupied homes and thus overall depreciation) is missing a primary driver of the outcome of your bet.

It seems like a person's love or hate of owning RE is highly dependent upon what the rent vs. buy situation is in their local market, for obvious reasons.

For example...my mortgage is literally $680 per month (80% leveraged/20% equity). That's everything (PITI). I could rent my home for about $1100. (I own a rental a few houses away so this number is very accurate.)

Need to know the value of the property for this to be meaningful.

$135k