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GholaGolem t1_jaeg5ti wrote

I normally don't comment unrelated stuff, but good Lord in what career path are 600-700k bonuses common??

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fluffy_bunny22 t1_jaeh744 wrote

It's not unusual for executives to make that kind of money in bonuses in any line of work.

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greyAbbot t1_jaefa1h wrote

This all hinges on probabilities, and only you can really be the judge of that. Your statement "Of course the bonus is never guaranteed" is doing a lot of heavy lifting here. How much you factor that bonus income in depends on how likely you think it is that you'll actually not get a bonus in any given year.

You don't want to be in a situation where one down year causes you to lose your house, so you need to structure things so that won't happen. Maybe that means you have a certain amount set aside in liquid accounts so that you can pay a year (or even two) of mortgage if you don't get a bonus.

A relevant question here: how much do you actually want to spend on a house? Are you just trying to spend as much as humanly possible, or do you have a target in mind? Because there's no point in spending a lot of time and energy figuring out your exact limit if you're not going to come close to that. It seems like you could easily put aside a year or two of mortgage on a really nice house and then never have to worry (about this, at least).

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Watty0207 t1_jaefyui wrote

Definitely not trying to buy as much house as humanly possible. The homes where we live are very expensive - the $1.6mn house I gave as a theoretical example gets you ~3-4 bed, 3 bath type home, not brand new.

I guess that's a good point that I may just have to hold more liquid assets than someone would normally at my age in order to defend against the potential volatility.

Thanks for your insight.

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Werewolfdad t1_jaefdlb wrote

You make a million dollars a year

Buy whatever fits in your budget.

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NecessaryItch1452 t1_jaeia3l wrote

I would base it on your base income so you aren’t in a world of hurt if for some reason the bonus doesn’t go thru or severely reduces in the future. Unless you build up enough of a cash emergency fund that it’s not an issue.

With that type of income your overall savings seems to be light though. I would start saving a higher percentage of your overall income…like maybe the entire bonus.

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Watty0207 t1_jaeinhw wrote

Definitely agree - we did a lot of work on this house that we're currently in so some went to that, and we're 32 years old so haven't had a lot of time to really accumulate yet. My income before these three years was much closer to just the base income.

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AppState1981 t1_jaep301 wrote

It depends on where you live and what you want. Do you want land? Do you want to live on a golf course? Suburbs or city? It's less about money and more about where you want to grow as a family. For instance, we lived in a lower priced house with some land and a pond but poor schools but we planned to use private schools. We ended up moving to Appalachia to a college town where all the schools were good and got a great house in a private neighborhood. Our priority went from cost to safety.

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Knipfty t1_jaer3xu wrote

I have been there. Don't make the mistake of expecting a bonus in order to afford the mortgage. Use your bonus to help with the down payment. But make sure you can afford to live there if you receive no bonus.

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