Retch The Grate
Full time employment: Posting here.
I've got a long time to go till I hit FI, and I'm currently renting. It seems like many people have paid off houses as part of their FI plans. Anybody have suggestions for figuring out the right path when you've got a fairly long time horizon to go?
Psychologically I've wanted to buy a house, but it is fantastically expensive in Silicon Valley. I've got the possibility of doing it as a group thing with friends if I want to try and organize that, which might manage to bring the individual amount down to something I can make monthly payments on.
So, does continuing to rent just make sense? I've seen the arguments that CA has the rent to mortgage ratio heavily in favor of renting ever since I first started looking into it. I could cut my renting expenses by moving into a bigger house with more people if my current housemate (good friend) moves away. I'm social enough that that likely wouldn't bother me, and I'm old enough that I'm relatively mellow as a housemate.
So, continuing expense of paying rent, with the freedom of not being tied down to a house? Is the building equity so valuable that I should be doing everything I can to make that happen despite the apparent much higher cost to purchase a house?
If buying a house is the one true path, should I raid my 401k/Roth for a house downpayment? I view that money as untouchable and my models say that is a huge setback for my FIRE goals, but houses are one of the things they let you have access to money in those accounts for, and I have enough for a small downpayment. It is really frightening that hitting a 20% downpayment in Silicon Valley can cost more than buying a nicer house outright in Pittsburgh PA.
I'd love to be able to take my $1000-1500 a month for household expenses in FIRE and turn that into something smaller, though frankly, for many houses, just paying taxes around here can be $200-600 a month never mind the maintenance and other monthly bills my renting estimate rolls together...
Psychologically I've wanted to buy a house, but it is fantastically expensive in Silicon Valley. I've got the possibility of doing it as a group thing with friends if I want to try and organize that, which might manage to bring the individual amount down to something I can make monthly payments on.
So, does continuing to rent just make sense? I've seen the arguments that CA has the rent to mortgage ratio heavily in favor of renting ever since I first started looking into it. I could cut my renting expenses by moving into a bigger house with more people if my current housemate (good friend) moves away. I'm social enough that that likely wouldn't bother me, and I'm old enough that I'm relatively mellow as a housemate.
So, continuing expense of paying rent, with the freedom of not being tied down to a house? Is the building equity so valuable that I should be doing everything I can to make that happen despite the apparent much higher cost to purchase a house?
If buying a house is the one true path, should I raid my 401k/Roth for a house downpayment? I view that money as untouchable and my models say that is a huge setback for my FIRE goals, but houses are one of the things they let you have access to money in those accounts for, and I have enough for a small downpayment. It is really frightening that hitting a 20% downpayment in Silicon Valley can cost more than buying a nicer house outright in Pittsburgh PA.
I'd love to be able to take my $1000-1500 a month for household expenses in FIRE and turn that into something smaller, though frankly, for many houses, just paying taxes around here can be $200-600 a month never mind the maintenance and other monthly bills my renting estimate rolls together...