A million dollar home is really a different product depending on where you are. In DC, a million dollar home is nice, but not exceptional. I’m sure I know people who live in homes that cost close to a million dollars and they are working professionals, two incomes. There is a series in the NY Times every once in a while where they show what a set price will get you in different markets of the US.
It really isn’t that extravagant. I barely make 64K before taxes and I have two cars and two houses. Monthly payment on the cars is 1100. Payment on the houses is around 2100 together. That still leaves pleanty left over.
I am the opposite of wonder9. I couln’t imagine putting off minor luxaries now for some potential benefit in the future. I don’t care to have extra money when I am old and weak and cannot enjoy it. I believe one should enjoy life while they are in their prime, and pay it back when they are old and don’t care to leave the house anyway.
Real estate agents are often expected to have a nice car in which to ferry around prospective clients. Harder to sell a million dollar house if you drive them there in a clapped out Civic I guess. They probably get a tax break on the lease payments too.
Yeah, but your situation is a little different. Not everyone has that nice military pension and VA bennies to fall back on. 
But I understand and agree with the sentiment. There is a fine line between being financially prudent and being miserly.
I paid about that much, and I have a fairly modest income. The difference between me and another random person is that my mortgage has been paid off, it was an inexpensive car, and I can’t stand to have a car payment for more than a year or two. I think I had a trade-in, put some money down, and then paid the rest off in a year.
Quite a few people buy one of those suburban monstrosities after calculating that they can just manage the mortgage payment, then forget that they are also gonna have one hell of an electric/gas bill. And taxes. And things eventually break.
This. We’ve managed to have 4 cars, a boat, an RV, an airplane and even keep a few thousand acres leased for private hunting all at the same time. The key is to avoid overspending on any of them. A partnership for the plane, a club for the lease, inexpensive Toyotas for the cars, and the RV and boat are relatively low-end products. The lake looks the same from a inexpensive ski boat as it does from a $75K Mastercraft. The state park is as enjoyable from my modest camper as it would be from a $100K motorhome. We could have blown our income on a McMansion and a couple of high dollar rides, but we chose a modest dwelling and to spread the excess around on fun stuff.
Disclaimer: I had to let the airplane go; Something about the kids wanting to go to college, etc.
My car payment is close to $500/month and we only make around 35k per year. I could do $800/month if I wanted to pay it off quicker, but that would mean we wouldn’t be able to stick half our income in savings each year.
We make about the same and I could never afford $500/monthly.
Here’s what a million dollars will buy you in central London. A whole 592 sq ft. Fancy, isn’t it? :dubious:
Re car payments, a few years ago I was paying £420 a month for a car which is $670 at today’s rates, more like $700 then, and I was only earning £37,000 a year or so. My rent was extremely low at the time though and I didn’t have many other outgoings. I should have been saving that money though, as I am feeling it now!
The average home price in the area of Pennsylvania I live has dropped to about $150,000 and there are million dollar homes mere blocks from my house. Those residents certainly have higher living expenses (like $799 car payments) but it’s not like they shop exclusively at rich person grocery stores or rich person theaters. You can have a million dollar home outside of an extremely high average home value region. They’re just outliers.
It is probably easier to live well and save a lot of income on 35k in costa rica though. I looked into living there once. The people seem friendly and the culture laid back and kind, but I hear the weather is pretty hard to cope with. At least for those of us used to north american weather.
Not long after I started working in London, when I was only earning £25k or so, I was living in a street where the houses would cost at least £800k to buy. Not because they’re fancy houses, just because they’re in London, and that’s what an entire house (rather than a flat) in London costs. A couple of streets over, there were plenty of £1.5m-plus homes. Okay, I was renting, but day-to-day living expenses weren’t magically higher and unaffordable just because houses cost that much.
Sort of an historical note. Way back in 1941 (August, actually) my Father paid $1,100 cash for a brand new Oldsmobile hydramatic, one of the first automatic shift cars to be sold. Really a nice car, and it lasted us all through WWII and well beyond with no problems.
Anyway, I remember Dad driving it shortly after the purchase, and telling me that he would rather have bought a Cadillac, but heck, a guy would have to be making at least $10,000 a year to afford that car.
How times have changed!
The wife and I had a $800 a month car payment, back in the mid 90’s. For five years. For a Corvette.
It was $42k. We were making good money and had no kids. Even then, it was a stretch.
$42k on a car these days is NOTHING. $40k will buy half a Porsche, a Cadillac SRX, A Honda Odyssey FAMILY VAN can crest $40k. Chrysler 300? Darned near EVERYTHING from Ford can be spec’d out to beat $40k.
Cripes! I went and got old!
This sounds close to my situation so I can actually contribute to this conversation.
I had a car payment of $906. per month for my Porsche (paid off 3 years ago). My house was valued near the $1 million mark before the housing bubble burst; its current value, according to Zillow, makes me want to cry. My salaried income for 2011 was in the mid $200Ks, which doesn’t include returns on investments.
I’m far, far, from rich, or even wealthy, but I do okay. 
The payment on my new Audi Q5 is about $700 a month. No mortgage, no debt, no kids, and a decent income (prob around $80k or so this year) . . . so it’s not some huge extravagance in my mind (though I guess it is after reading this thread heh). Though the business reimburses me part of the cost.
Low end? For a boat? Do you slip your boat, or trailer it? Maintaining a slip, winterization, recommission, seasonal repairs, purchases, and gas are expensive. My boat is too big to (easily) trailer, so I keep it at the marina year round.
My wife and I would have a choice to make as $799 is what we pay for rent. We could either sleep in a bed or sleep in our Land Rover and shower at the YMCA. 
I could afford that, but it seems pretty wasteful. I’ve learned that I do not derive enjoyment from cars, so I drive a boring affordable one.