Lot of $$ / Buy vs. Rent
 

$20k? Used to be a lot of money when houses were $300k, $100-$150 bought groceries for a week, and decent cars were $20-30k. Now $20k per month isn’t a lot of money.

I had to look at that a couple times to make sure I was reading it correctly.

With respect, your perspective is incredibly skewed on this too. You don't think $240k/year is a lot of money? That's the top 2% of all earners.

I R itch. :)

Yep no kids, just my 9 acre pilot estate in the "mountains" of New Jersey. (They say I live on a mountain. It's maybe a large hill overlooking the Rockaway Valley)

Good delis. Better pizza than NY. Taylor ham. And bears/turkeys/deer in my yard. And I can't see the neighbors.

Boonton Township is basically rednecks with money so I fit in.

yeah this argument always gets me especially now. Things have gotten way more unaffordable for many Americans, but if you’re a legacy airline pilot the last four years has seen your wealth absolutely crush inflation.

everyone needs to calculate how much more you spent to survive in 2019 vs. 2023, then subtract that from how much more your W2 was from the same two years.

this doesn’t mention how much more your 401k is assuming you left it in an index fund, nor how much more your house is worth assuming you bought it before COVID.

For emphasis, I’m not saying the post covid year or two hasn’t been hard for many people, I’m just saying, mathematically the last 4 years have been absolutely epic for the average legacy airline pilots buying power.

With respect, is it possible your perspective is not his perspective?

Your perspective seems to be legacy airline pilots vs. the masses.

His perspective seems to be legacy pilot pay to historic legacy pilot pay.

You can both have valid perspectives.


BTW.....seems like every contract negotation the old argument comes up of how much behind pilot pay is compared to the "cadillac a month" of yesteryear. People who trot out the arguments of "reasonablness" I see here are shouted down as managent shills, but then those same people have a change of perspective and want to cherry pick evry contract and "get it all", "Their is no quantifiable pie that needs to be divided, it's en endless buffet"

Funny thing about perspectives, isn't it?

20k a month plus the company putting an additional 17% into your 401k is a lot of money IMO.

Now if you're into the finer things in life, $800k house, 100k cars, Gucci, LV, Saks 5th Av, 3+ kids, one can quickly end up living paycheck to paycheck or Greenslip to Greenslip

Good point, my house this year on the tax rolls went from $499. to $1,057. In Tennessee! Redikulus.

Most making pay comparisons use the hourly rate. Contracts have evolved to the point that makes no sense. When I was hired in 1986 the top Captains made 150,000 a year on a 160 an hour rate. Currently the top Ca rate is 438 an hour but the majority of those pilots are making over 600,0000 plus a year without breaking a sweat. 150,000 adjusted for inflation is 432,000 today.

I'm a 50% captain and won't break 400k this year. So we've lost to inflation since 1986!

My response was completely irrespective of pilot anything.

If you are a top 2% earner, in one of, if not the richest countries in the world, complaining that you don’t “make a lot of money”, I submit you need some perspective.

That’s not to say we pilots don’t warrant a raise, nor that historically there have been really some hard times. But in the end, I think you’ve lost touch if you don’t think $240,000 annually “isn’t a lot of money”.

I think you also missed the context around his claims around how long it took him to captain, juxtaposed with his statement about what does not constitute “a lot of money”.

Top 1 percent floor is $819,000 per year
Top 5 percent floor is $336,000 per year
Top 10 percent is $168,000 per year

$240k falls somewhere between 5 and 10 percent. Not 2 percent. Things have changed due to Covid and not having a POTUS. Your information is outdated. Minimum wage is $20 per hour in some states. 2 workers making minimum wage top $80,000 per year these days. That’s the floor for 2 full-time workers.

Ok, fine. I guess my Google-fu found an outdated WSJ calculator.

My point remains, while I would agree with you that $20k/month definitely ain't what it used to be, $240k/year is still a lot of money.

This has been interesting. Conversations between me and my wife have gone along the lines of:

Her: If you told me back in college (90s) we'd be making what we make ($360-370 this year. 80% ER Captain, live in base, did $467k last year being a GS Ninja) I'd wonder how many motocross tracks we own and how big the mansion is.

Me:
If you told me we'd pay over $1M for a house I'd ask how many motocross tracks are on the property and do I have an indoor arenacross track, and how baller is the pool?

In reality, while we make good money, my dad was able to swing a similar house, on a lot more land the same distance from BOS as I am from LGA as a truck driver.

We (legacy pilots) have good paying jobs. But housing has vastly outpaced wage inflation. That's my single biggest bill.

1979 dad buys a large Victorian in good shape, albeit last updated in the 30s, for $69k. On 40 acres. With a carraige house and barn.

Based off CPI inflation that would be $298k today.

You aren't buying that house for under $1.4M if it still had the acreage. Owners after my parents sold off all but 2 acres. It just sold last year for $988k.

IMO one of the biggest divisors between the haves and the have nots for a long time to come will be those who already owned a home in 2020. Most homes near any of our bases have doubled in price in the past 5 years, combine that with the stark difference in interest rates compared to what we have now, the mortgage payment on the same house could easily be about 3x what it was 5 years ago. It’s insane how much that one thing affects your life.

Yeah. Honestly that kind of have and have not disparity might become a huge issue in America is it hasn’t already. Home ownership has always been the path to the American Dream and I feel that’s not good for societal stability if that’s unattainable for more and more people.

but eventually market forces dictate that people are eventually going to have to lower their asking price when selling a home, and current owners are just going to have to stomach not getting an absurd return on their house when they want to sell it?

Has anyone seen home prices decline the last couple years? I’m toying with the idea of moving north of NYC from where I live south of NYC to be closer to in-laws and it seems prices have at least stabilized and homes are staying on the market longer.

Home Ownership being the path to the American Dream is a propaganda probably started by the banks and likely a reason why Financial Literacy is not taught in schools. The decision to buy/rent is a math problem. Right now the math strongly favors renting. Nobody really owns their home. The Bank does and even after you pay it off the govt owns a portion of your home. If a house paid off home owner does not pay property taxes the homeowner will quickly be relieved of their ownership. So it's just a simple math problem to figure out if renting vs home ownership costs. Another issue is hardly anyone, especially young people, factor in the costs of maintaining a home extends far beyond mortgage payments. Water heater failure, furnace goes out, roof needs replacing, Renovations, Lawn care etc etc. Homeownership can eat up valuable time and money

Right now with insane home prices for first time homebuyers the math says take the tens of thousands they need for a down payment and put it in a brokerage account invested in a diversified class of ETFs across multiple assets classes and rent. Ramit Sethi has great write-ups about this topic

You kinda lost me. Do the costs associated with home ownership(taxes, maintenance, roof, lawn care, water heater) just magically disappear by renting? Does the landlord just eat those costs or does he pass them on to the rentor plus the management fee?

It’s not propaganda. Most Americans’ primary investment is their home.

not saying that renting is never the answer, but in most normal circumstances, home ownership is the much better long-term play. Unlike rent, At least some of your mortgage payment comes back to you in equity.

seriously. for someone calling it a “math problem,” they sure forgot a term in their formula

You need $553,000 to be in the top 5% of earners in NYC. $470,000 to be top 5% in Florida. $487,000 in Georgia

you need at least $300,000 to be top 5% of earners in the USA now.

A single family home in most states is $700-$800K now a days.. $800K home is basic how. You old timers are out of touch with what the real world is like now. And I’m talking about ATL area, which is relatively low cost of living. You can get a condo or town home for $400K - $500K+ in most places that are good areas

you need $1mm to get a single family home in Northern VA.

Why does everyone need a big ass house with a backyard and 4 bedrooms? Townhouses are the perfect size imho.

Not buying the narrative. I’m not old timer, I’m 36 and can find decent size homes in ATL for 600ish. To be more specific PTC.

The issue is that people want house, 2 new cars, living large and having vacations. I’m all up for higher interest rates, people need to let go of THINGS…

We need to stop making us seem as we have money and actually use the money to create wealth. Get rid of social media and start living life.

a 4 bedroom house isn’t big lol.. imagine if you have more than 2 kids? And someone working from home.. I don’t know anyone that prefers to share walls or walking out on their deck and being able to shake hands with their neighbor. America has a huge housing shortage. You can go to Japan or Italy and buy a house for $1

Three dogs. Dirtbikes. Not wanting to hear every time the neighbors fight, watch a movie, or smell what they are cooking.

I grew up living in literally a closet under the stairs. And spent over a decade either on a boat or in barracks/clu/chu.

Never again.

high interest rates were fine when a home cost $250 - $400k for a home, not $600K + just to get started

If I had kids, PTC would be a good place for me. Being young and single, not so much.

So, you’re young, single and looking for a 800k home. Got it…

It is a math problem. There are certainly times it's better to rent than buy, especially when you consider many don't stay in home for more than 10-15 years. What many people fail to factor in is the true interest rate of your loan if you don't hold it for the full term and how much the cost of ownership adds up, even if you get some nice appreciation. Other fators are the amount of money your initial down payment could make them if they had invested in real estate or even just the S&P over a 10 year period. I'm generally in the buy camp, but certainly are plenty of situation where renting is a much smarter option.



Woah, $800k home is basic? Dang, I'm glad I don't live there. $800k here will get you a brand new 4-5 bed/4-5 bath, 3,000+ sq ft home with a big yard, a pool/hot tub, outdoor party space with a 3 car garage, in one of the nicest parts of town. You could probably get that for $550-700k actually.



Lol wut? IDK man, most 4 bedroom houses I see today are McMansions. Of course, I grew up in a 1,300 sq ft, 3bd/1 bath home with two sisters, so most everything is big in comparison.

no, I’m fine with renting for a while. No way I could afford a $800K home.. but nice try

Haha, this thread has been eye-opening. 4 bedrooms isn't big and 240k a year isn't a lot of money!

The median home price in the USA is just under $360,000. Yes, a few years ago it was around 200, but there are still plenty of properties out there that aren’t 600k+. Obviously where you live will have a big impact. Here are the median home prices for our domicile states:

CA: 673k
GA: 300k
MI: 211k
MN: 294k
NY: 411k
UT: 475k

And since we can commute that opens up even more states. Lots of affordability within a couple hour drive from a domicile. Yes, it’s not going to be a dream house in a dream location, but there are still affordable options out there, especially for people at our income levels.
Median Home Prices by State

median home price is $439K according to Redfin - down to $416K in September 2024

That is why the mantra of, "The rich need to pay their fair share" might be a very slippery slope.

If 240k/year qualifies as a lot, I would imagine eventually, with 35T debt and climbling, legacy airline pilots will be in the crosshairs for paying their fair share. As it is, I think the debt/taxpayer is about $350,000. Yikes!

Everything is political to you. You just can't help yourself can you?

Uhhh Hello? This is financial.

Keep up

#1 You're forgetting the opportunity cost of the down payment, closing costs, escrow instead being liquid cash or better yet invested in diversified ETFs making capital gains

#2 If a furnace breaks that's the landlord's issue to fix. For a homeowner that's a $5k+ expense unless they purchased a new home or bought a home warranty.

Mind showing your math on that one? 600k plus a year at 438 an hour is what, about 114 hrs a month? Without breaking a sweat? When I was on the widebodies green slips were almost nonexistent unless you were in the top third. I actually never got one.

If an outright majority of our 350 captains pull more than 114 hrs a month I’d be surprised, but maybe times have changed since I was international.

If you're willing to commute, you can buy a lot of house and land in Upstate NY for about half the median cost of a home in NY