What year partner can realistically afford to have ~$4M in mortgage debt? Particularly big4

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Realistically has nothing to do with “what year partner” and everything to do with how the partner spends their money.

I could swing a $4M mortgage. I’d be eating ramen in an empty giant mansion, but I could make the actual payments, and I make a hair less than a million. Probably most partners could if they really prioritized it. How much you need to make before you’re comfortable spending that much is a completely different question. Like most people at partner age, I have a family and life and hobbies to pay for. I don’t want to spend every last dollar on a mortgage payment. I still live in the same house I bought when I was a director. It’s worth less than 1x my annual income, and I like it that way.

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Another question is where do you live. Some parts of country you need to spend a lot more on a home ( not 4 million). Other places a “nice” home is much more affordable

I make 300K and I’m taking on 2M mortgage lol

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Principal 1 hit the nail on the head. I was in the same boat - very affordable house and focus spending on other things and saving for retirement. I could have bought a $4m home. Instead I retired early and still live happily in the home I bought when I was a manager. My kids are about all moved out and now I think I don’t need even this much house. Also, the property tax on a $4m house is shockingly high (and mostly not deductible due to the 10k SALT cap). Just because you can, doesn’t mean you should.

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That’s not years at partner you need to be a region leader for that kind of debt burden. A standard partner who just stays the course and does well but nothing huge will probably top out 1-1.3 million. No shot enough for that loan

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Why is it sad?

Depends. I’m about to do it

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Nice!

Its also an investment decision - what percent of your net worth do you want locked into real estate, a largely insolvent asset?

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Honestly a $4M house isn’t getting me much more then something around 1.2-1.5. Next big bump is when you actually buy mansion at $10M.

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10 year partner here - probably can afford a 4M house in terms of monthly mortgage payments , but I can’t think of any reason why I would lock so much of $$ in real estate

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If you look at mortgage affordability calculators if you had ability to put down 15-20% you’d need to pull in close to 850k with no other debt. Comfortably would probably need to make $1M and even like EY1 mentioned that will be upper echelon most likely. Doesn’t mean you can’t but have to be solid on finances. Your payment probably be $20-$25k per month maybe more depending on property taxes. You’ll want to make 3-4x net probably.

Also depends on what your spouse does if you’re sharing the home

If someone first becomes partner around 46 years old, what is the theoretical income they could reach annually before having to retire?

I will next year. Still Looking for the right place.
In T2 not big 4, year 6 partner pulling in about $2.

$4m now? Or $4m when they bought it?
Pandemic prices have skyrocketed the price is SFH. Nice 5 bedroom ones in a good school district in the Bay Area went from 1.5m to 2.5+ in 2 years.

It’s not the income - it’s investments and the relative wealth created that allows you afford this type of house. For context - I had about 50k in AMZN in 2005 …
Always stay invested in US equities

…no, it’s the income. Income is what lets you make the mortgage payments. You can’t spend money you have invested in equities.

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