Cost of Living calculator?

[jesse]

That's my thinking as far as salary goes. They have a pretty liberal annual bonus system in place which helps lessen the blow. It's also a pretty 'young' company doing some fairly advanced processing, so it could be a good boat to board as a career starter.

Any idea what their financial health is? Are they public?

 

[jesse]

Houses are a poor way to share risk
Owning a house is a terribly risky investment, not only because of the volatility of its value, but also because of the high correlation between house value and local economic conditions which also determine labor income. In other worth, owning a house you live in is among the worst things one can do in terms of diversification. Two recent papers revisit some aspects of this.
http://economiclogic.blogspot.com/2009/11/houses-are-poor-way-to-share-risk.html

It's not *that* risky -- but it's not *that* rewarding either. The situation is different for every person. There is some *value* that isn't monetary for a lot of Americans in home ownership.

 

[ClimbnSink]

It's not *that* risky -- but it's not *that* rewarding either. The situation is different for every person. There is some *value* that isn't monetary for a lot of Americans in home ownership.

That non-monetary value is the only reason to own your primary residence.

 

[EppyGA]

Don't go too far outside of the Atlanta Metro

As far as starting wage being a few percent different -- it really depends on your field and how you can make yourself valuable. You may be able to make up that difference quickly.

Hey where'd you find that old picture of me.

 

[Everskyward]

Owning a house is a terribly risky investment, not only because of the volatility of its value, but also because of the high correlation between house value and local economic conditions which also determine labor income. In other worth, owning a house you live in is among the worst things one can do in terms of diversification.

I believe that too, unless you think you are going to live there for at least 5-10 years. People are finding out now that housing does not always go up and that it's not a liquid investment. I held off buying until I was 35 years old and I'm very glad that I did. I ended up buying when housing prices were down and I've held onto it for a long time so it is now a positive investment for me even with the current economic climate. However, that is only because I chose not to move around for a job after I bought my house. That has probably affected me careerwise, but it was the choice I made.

 

[jesse]

I believe that too, unless you think you are going to live there for at least 5-10 years. People are finding out now that housing does not always go up and that it's not a liquid investment. I held off buying until I was 35 years old and I'm very glad that I did. I ended up buying when housing prices were down and I've held onto it for a long time so it is now a positive investment for me even with the current economic climate. However, that is only because I chose not to move around for a job after I bought my house. That has probably affected me careerwise, but it was the choice I made.

You can't go into it expecting to pay for it based on it making money for you. That was the HUGE mistake that a lot of people made. I simply cannot understand how they came up with that logic -- talk about risk.

I don't really expect to be able to sell the house anytime soon and not take a loss. My personal uneducated "worst case" plan expects the house to take a 10% loss in value. If it ever goes up -- great -- but I'm not going to bet on it. I think the market is still inflated in my region and the tax credit is hiding that.

Over the long term a house can be a decent investment -- a pure numbers game and it's not that great -- but one must remember that you're just redirecting money that you would have COMPLETELY loss by renting. My mortgage isn't a whole hell of a lot more than I was paying in rent.

I was paying apprx: $8,500 per yer in rent which was a TOTAL loss. I'll be paying a mortgage of about $11,400 (including insurance, taxes, etc).

The interest is a ***** at first, over the first year, I'll only have about $1700 go towards the prinicpal (i'll pay more).

Let's take a look at the 5 year picture. With my apartment I would have been completely out $42,500 assuming that my rent didn't increase a single dollar.

With the house, over 5 years, I'll have spent $57,000 towards the house, insurance, and taxes. That is $14,000 higher than the apartment would have been. I'll have about $9,500 towards the principal paid.

The five year picture isn't that great. It more or less means that I'm getting closer towards breaking even on the increase in cost.

Now lets look at 10 years -- If I was still paying that rent which never increased (it would have) -- I'd have paid $84,600 in rent.

With the house I'll have paid $114,000. I'll have $58,337 in principal paid. At this point I'll have saved $27,600 over renting. I don't predict the house will require $27,600 in maintenance. The house payment cost more..and I still saved..plus I had a better life.

Now the above numbers won't hold water -- I'll be making a lot more money in 10 years and I'll either have another house or a LOT more, if not all, of that house paid for. I ran all these numbers before I made the offer on the house to truly understand what I'm getting myself into.

I've concluded ... With time -- owning -- beats losing the money to rent. If you have to sell you might lose your ass and you better have the cash to back it up.

 

[Clark1961]

While you're looking at those numbers Jesse keep in mind the tax benefits. It might look like the mortgage is costing you 3K more than the rent but you'll really be about even.

 

[jesse]

While you're looking at those numbers Jesse keep in mind the tax benefits. It might look like the mortgage is costing you 3K more than the rent but you'll really be about even.

Yeah -- I haven't really looked into the tax side yet.

 

[tonycondon]

and then there is the great benefits of when the grass needs mowed you get to do it and when the snow needs shoveled you get to do it and when the faucet starts to leak you get to fix it and when the deck needs paint you get to paint it. cause its all yours!

 

[jesse]

and then there is the great benefits of when the grass needs mowed you get to do it and when the snow needs shoveled you get to do it and when the faucet starts to leak you get to fix it and when the deck needs paint you get to paint it. cause its all yours!

Exactly! Although I really don't mind that sort of stuff -- and kind of "missed it" while living in really nice maintained apartments. There are a lot more I CAN though. Renting is quite restrictive.

 

[ScottM]

Don't go too far outside of the Atlanta Metro

As far as starting wage being a few percent different -- it really depends on your field and how you can make yourself valuable. You may be able to make up that difference quickly.

He lives NE of Atlanta. Billy is one of the nicest guys you could ever meet.

Here is what he looks like now.

 

[Clark1961]

Yeah -- I haven't really looked into the tax side yet.

As the saying goes, I'm not a tax professional and I didn't sleep last night, but...all the interest and personal property tax comes off the top of the adjusted gross income. So, whatever the bill is for interest on your primary residence, it's really 20 to 30% less depending on your tax bracket. One year I had two homes that qualified for the deduction and it really saved my assets, financially speaking.

 

[Trapper John]

Yeah -- I haven't really looked into the tax side yet.

Being able to deduct mortgage interest and property taxes is nice, but of course the deduction declines as the interest declines.

If you live in a 20-30 year old house, I'd figure 1.5% of the value per year in maintenance and repair, maybe 1% if you do it all yourself.


Trapper John

 

[Everskyward]

and then there is the great benefits of when the grass needs mowed you get to do it and when the snow needs shoveled you get to do it and when the faucet starts to leak you get to fix it and when the deck needs paint you get to paint it. cause its all yours!

Haha, no kidding. I guess it basically comes down to what best suits your style of living. When I was young I never wanted to be tied down and I felt a house would have been an albatross. When I got older I decided I wanted to settle down and I was into the house mode for a while. Now it's sometimes a PITA because I live alone and travel quite a bit therefore nothing gets done at my house unless I do it or hire someone to do it. I've thought about selling the little house on the prairie and buying a condo in town but this is not exactly the time to do that.

 

[kevin47881]

So, here we are. Waiting for the 'official' paperwork to arrive so we can compare benefits, etc. I also have another on-site interview scheduled in Memphis on the 18/19th, so that adds a whole 'nother realm of possibilities.

Like I said -- lots of tough choices to make, and it's a headache to think through everything, but I'd much rather have a headache than no choices at all.

Chris, I have numerous contacts in Memphis. If you'd like, give me some info and if any of them are in the know, I'll put y'all in contact.

 

[Everskyward]

Being able to deduct mortgage interest and property taxes is nice, but of course the deduction declines as the interest declines.

The deduction also declines as your pay off your loan and more of it becomes principal and not interest.

 

[Ghery]

The deduction also declines as your pay off your loan and more of it becomes principal and not interest.

Yeah, but the darned property taxes keep going up.

BTW, that's a heck of problem you have. Which offer do I accept? Many would be thrilled to have that problem. I hope you make the best choice for you.

 

[CJones]

BTW, that's a heck of problem you have. Which offer do I accept? Many would be thrilled to have that problem. I hope you make the best choice for you.

Exactly. We keep getting frustrated because there isn't a clear-cut answer - no matter which direction we go, neither offer is a 'bad' offer. When we start getting frustrated I have to step back and say "Whoa.. I'm not gonna get frustrated over this.. It's a LOT better than the alternative." We are definitely blessed.

 

[Capt. Geoffrey Thorpe]

Yeah -- I haven't really looked into the tax side yet.

You might want to look into some of the details about when you can and can not deduct some of the closing costs / loan fees / points (if you are paying them). IIRC some costs can be deducted if you pay them out of pocket but not if you just add them to the loan (but I could be wrong).

 

[Capt. Geoffrey Thorpe]

Exactly! Although I really don't mind that sort of stuff -- and kind of "missed it" while living in really nice maintained apartments. There are a lot more I CAN though. Renting is quite restrictive.

Yea, they get real torqued if you take a wall out or something like that - go figure...

 

[Ted]

You're definitely in a good position, Chris. Whichever one you choose, be sure to let us know. And then plan a fly-in for your housewarming party.