How many people are rich

[Alex]

Really? I feel like I could do all of those things now (assuming "pay off" doesn't mean paying the full price on the house but rather servicing a mortgage on the house since you're not going to buy one every year). Especially if you're allowed to see in advance that your kids will go to college and therefore do some saving.

But then I don't consider paying for college to be a parental responsibility (and especially not one of the "regardless of cost" type) so my rich people get off even easier.

Needless to say I don't make nearly a million dollars a year. Though the fraction is much larger than I ever believed would be possible.

[innerSpaceman]

Originally Posted by Alex

Really? I feel like I could do all of those things now (assuming "pay off" doesn't mean paying the full price on the house but rather servicing a mortgage on the house since you're not going to buy one every year).

It reads that way, but I didn't take it that way. Although it's becoming increasingly difficult for middle-class families to pay off a mortgage, buying a home on such terms is decidedly a middle-class circumstance. It's only a rich circumstances to buy a house outright, so that's what I took SL's statement to refer to. And if it did not, that's what I refer to.

[Morrigoon]

Originally Posted by innerSpaceman

Although it's becoming increasingly difficult for middle-class families to pay off a mortgage, buying a home on such terms is decidedly a middle-class circumstance. It's only a rich circumstances to buy a house outright, so that's what I took SL's statement to refer to. And if it did not, that's what I refer to.

You'd rarely find a rich person who thinks paying all cash for a house is a good idea.

Most wealthy folks would rather leverage that money, putting down just what they need to to make the payment pencil out. Then use the rest of the money (that this paid-off house would theoretically cost) to put down payments on rental properties, putting down just as much as they need to to make the property cash flow after accounting for maintenance and vacancy allowances.

Part of the reason for this is that in an upward-trending market, if you've put less down on a property, the amount of money by which your property increases in value represents a higher percentage in relation to what you've invested in it.

And now that I've bored you all to death, I'm going to go back to my sewing.