"Safe" ratio of housing expenses to income

I think that you could go to 25% but it depends. Are you making provision for retirement and the kid's education. Would you trade down from 500 channels and a Blackberry if necessary. Do you shop at WalMart or Nieman Marcus

Are you a professional athlete or a lawyer.

Bill Gates is probably at 0.1%.

Now is the time to upgrade because in many areas existing houses are selling below replacement costs even though you may have to sell your current house at less than you think that it's worth.

A good rule of thumb is to consider any house that you buy will cost you 12% of its purchase price to live in each year.

If you can get something good for a third or less of your investable assets, you should be safe.

People become more productive as they age until they go senile or get other medical problems.

Office politics and age discrimination are going to be the major problems of older employees. Remember, there is no affirmative action for older employees.

-- Ron

No, they are usually more productive, unless it is a very physical job. They work smarter instead of working harder. However, they will often be paid less, and have less job security.

Been there, done that, got the T shirt...

Igor - the old, tried and true ratio for mortgage approval was 28% of income can be used for PITI, (principal, interest, taxes, insurance) and

36% or so for the total debt service including the prior mentioned. If this is used with 20% down the risk to buyer and lender is minimized.

More than this is tough to discuss. There's a lot that missing, car expenses? Even if paid in full, the cost to operate 2 cars is far different than the cost of public transportation for two. The rest of your lifestyle? You eating out twice a week? Once a month? Vacations? Kids?

25% has a good feel to it. It's a week's pay, and should leave enough for all else. Our PITI is at 23% of our base salaries (we make more but budget the base income). Utilities run about 4%.

Ok, no details. Over 40, depends on type of work.

My experience is that many of us lose some of our vigor and enthusiasm for work. It varies, but I usually see it starting mid-50s.

It often evidences itself in a reduced ability to deal with change in the workplace. The best fix is early retirement - if the person has made good choices and can afford it. Otherwise, it leads to stress, a sense that "the boss wants to get rid of me" and reductions in productivity.

Thanks, guys. I have been thinking about this all that time. Just was not sure of the answers.

My type of work is computer programming. I work as a computer programmer, plus I have some income from websites. I am not sure how my abilities will be impacted going forward.

There are no other debts besides the current house. Right now our PITI (as you said) is under 9%.

We are considering buying something to bring that number up to approximately 20%, after considering mortgage interest deduction.

However, if I exclude my website income due to being less certain, this percentage jumps to 31%. Considering that house expenses include utilities and other home care, this becomes more concerning.

In addition to this, I would like to retire early. Retirement does not mean no work at all, it just means that I will work on my own stuff (like websites) on my own time and my own schedule. I could always make money from a lot of things.

Clearly, plopping a bunch of $$$ down towards a bigger house, does not bring me closer to that goat AT ALL. In the end, it boils down to what I really want to do with my life, of course, to live in a bigger home or to be able to not go to work every day. I actually love my job, but do not like waking up early and the commute.

There is an additional investing consideration. I was very highly invested in stocks since the winter of 2008/2009 (80% or so), and almost not at all before that.

This is partly what lets me consider bigger homes. However, with the latest runup in stocks, and continuing rise in long term yields, I am sure that future stock returns will not be anything like what we have seen recently -- the "value" just is not there and they are almost completely fairly priced.

With this in mind, I look at the real estate market of somewhat higher end homes, and see tat they have fallen in price below replacement costs. That cannot last forever and I expect prices to eventually correct.

In other words, I perceive value in the real estate market. With the transaction costs involved, I would not buy a home just for appreciation, but if I could also enjoy a nice house and see it appreciate moderately, I would be happy. Stocks are no longer as attractive as they used to be, and higher end houses are cheaper than ever in recent history.

i