re: So all I need to do to afford a $750,000 house

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Is to cancel my Netflix subscription and stop buying lattes and avocado toast?

Then I will be able to afford a house?

But what if I don't subscribe to Netflix, don't drink coffee, or eat avocado toast?

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I’ll bite:
1) small recurring expenses are often tied to how easy/important it is to retire rather than to buy a home. I’ve never seen this comparison. But the quick math:
Most people wouldn’t think of a Starbucks venti (large) latte as a ‘splurge,’ and $4.15 for something you could make at home for significantly less. Quick AI answer suggests that 16oz of beans will make you something like 32-64 cups of coffee. You can get them Anywhere between $5-20 per pound. Even with the added price of milk (and electricity and time) you’re looking at 75% cost savings for something that isn’t hard to do. Let’s say the cost of that home cup is around $1 (though you could easily drop it to almost 1/10 that and have coffee for a month for the price of the one latte if that was your thing). We’ll just use the $3.15 in savings. It doesn’t mean you can buy a Starbucks latte. And almost no one buys 365 of them a year. But it’s a quick point meant to prove a thing.
Here’s the thing:
Throwing away $3.15 is so easy you won’t miss it. Instead of throwing it into a cup of coffee and a line, throw it into a total market/s&p 500 type fund. You’ve just saved $1150 (rounded up a quarter).
What does that get you?
If you start this habit at 22 and work until 65, assuming a 6% after-inflation-adjustment return, you’ve got $228K from making a small but meaningful choice.



Cigarettes are usually a better option for the concept, because people really do buy 365 packs a year and don’t skip days when compared to things like coffee or avocado toast. $5.21 per pack is the cheapest average price in the country. $10.53 is the highest. Median around $8. Using $8 and the same career because this hypothetical human who made the choice between an unnecessary habit and dedicating the (seemingly) trivial amount of money to retirement and waited until 22 to make the decision: $580K. 4% of which would be a tad over $20K, and $20K/year in retirement (trinity study, long retirement, never run out of money, almost always end up with more money than started, etc…can provide more detail for anyone suggesting I don’t understand it, but that’s as good a short summary as I’ve ever seen) is almost always a ‘step up’ from where someone was considering retiring (that’s a hell of a vacation a year more).


The point is that small decisions compound drastically.

But a $750K house? I don’t understand what your point in using this is. Outside of a couple HCOL areas, a home of that price is considered pretty luxurious. I don’t think anyone is arguing that everyone deserves luxuries accommodations. I don’t think anyone suggests the math of living in one of these areas is comparable to living in Many, LA. Housing is almost always a direct function of current earnings and job stability rather than good saving from any financial advice I’ve ever read. While they both deal with money, they’re just wildly different things.


Now, the final part:

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Also can you point me in the direction of those $500 beater cars that are always being talked about while you're at it?

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I have always struggled with car math. Or, really, I’ve always had unreliable transportation that left me stranded a few times a year, missed work, etc until I bought a new vehicle. I bought two used cars right out of college/med school. A Camry with 180K that I drove to about 230K. Lost a timing chain, blew a head gasket shortly after. The car was cheap ($2000), and over 4 years, I probably spent about that much in maintenance on it. The next one (bought on 2d notice because of the catastrophic loss of the Camry) was a gentler-used Ford Fusion around 100K miles. It actually didn’t break down, but I wound up putting about 50% of what I paid for the car into maintenance annually on it. At that point, I made the ‘bad’ financial decision of buying a new car and actually having a (sub-4%) note on it. It has been much more pleasurable to put the first 150,000 miles on my truck than the last 50,000 of either of those vehicles. That said, as my truck enters its ‘later years’ and turns ten soon, I’m tempted to find a gently-used Camry/accord sub 30k miles. But the price off doesn’t really justify not buying new. Heck, I just looked up certified used Toyota, and they want $17K for one with 100,000 miles on it. The traditional view of car ownership advice (buy 3 year old car and never sell it etc) has changed drastically in the last 5 years, and for the last decade has been a little overly optimistic in my opinion. It may still apply to uber-luxurious things whose values plummet rapidly, but the economics of ‘everyday cars’ has become financially crippling (maybe slight hyperbole) to anyone near median income who intends to live without significant debt. That said, holding onto a car is still the smart strategy. And people can/should feel free to finance one. But the smartest decision is to buy one, pay it off, but continue saving the value of the note of your last one until you can buy the next one in cash. It hurts way more to spend $40,000 in one day than $48,000 over 5 years for some reason. So it actually helps you spend less in a couple ways, oddly enough.




TLDR- $750K homes are probably going to remain reserved for those making $250K/y or more unless you’re willing to make very significant sacrifices in other areas. But anyone within the realm of median income has the opportunity to make smart decisions and retire a millionaire (and I am talking about having a million dollars. Not considering ‘millionaire’ to be the lavish rock-star lifestyle that so many people tend to think it is).