and shawn just makes his neighbors jealous cause he has one of them double stacked outhouses.

Well, in the part I quoted you assumed that your disposable incomes are equal. It stands to reason that if he has enough disposable income to buy another house, then you could take that same amount and invest it.

Also, keep in mind that your home is not your only expense, and most expenses don’t share that 4:1 ratio. New Yorkers don’t pay $60k for a Toyota Corolla, for instance. Bostonians don’t pay $200/month for basic cable. In our increasingly mobile world, most of your costs are going to be the same or just a bit more. Computers, iPods, televisions, tickets to Disney World… it’s all the same no matter where you live.

ps. I like Raleigh, heck I live there, but let’s be honest — a neutral third party would be very unlikely to argue that Raleigh is as nice as DC, New York, Paris, or Rome.

And don’t downplay what you have in Raleigh. My best friend, and co-author on this site, Shawn, lives in Raleigh and loves it there. Sure, you don’t have Ethiopian restaurants and people have outhouses just outside of the city, but the traffic isn’t nearly as bad and the job prospects (at least in my industry, and my wife’s) are constantly growing.

But you did catch that I will have a leg up on my friend when we retire, but it’s just not as good of one as you thought.

I have to disagree. I hear this argument a lot on PF blogs when people live in a high cost of living area. It completely ignores the long-term financial impact of your living situation.

In other words, say you and Realist both retire, sell your homes, and move to Florida to warm your bones. (Not an uncommon path in life.) Guess what… now your cost of living is identical, but you STILL have 4 times more proceeds from your house than he does. Tada!

The second issue you’re ignoring is quality of life. The reason your house is 4 times more expensive than Realist’s, even though (for the sake of argument) they’re identical, is that you live in a place that society has deemed more desirable. Example: You live in DC, or near to it, apparently. I’ve been to DC a few times. I know it has really nice restaurants, cool things to do, museums, etc. That’s all stuff that is available to you that has some difficult to calculate value.

I live in Raleigh, NC. We have a nice(ish) museum. A few good restaurants. Not as much to do. A less educated population. If your salary is exactly 1.47 times greater than mine (hypothetical COLA), and we have the exact same after-tax disposable income, your life is still better than mine.

So, two factors. I’m not complaining about the facts (they don’t necessarily apply to me as stated) but I do wish people would not be blind to pretty obvious truths.

Am I misinterpreting something?

but anyway, i have known mike for 22 years or so, and neither me nor him come from money, but we come from good families.

here’s my view, money doesn’t buy you happiness, but a good support system does. i quote the simpsons all the time, and well, i rather be homer simpson then mr. burns any day of the week.

i could care less about money, because we could lose everything in a blink of an eyelash, but we would still have those around us.

the best complement that i could give mike is, is that i would trust him with my life.

money can’t buy that

The initial post and Douglas’s comment reminded me of a line from the movie Fight Club.

“The things you own end up owning you.”

And now I have a sudden urge to watch that movie again. It’ll make for a nice way to cleanse my palette after watching so much Olympics!

I like your site and posts! Keep up the good work.

Just a thought – 50K 30 years ago isn’t the same as 50K now so I don’t know if your comparison is the same…