patrick.net

thanks for both of your comments.. i'll take all that into consideration. As for the SEP IRA, If i do contribute 50k pre-tax per year, wouldn't that take me a lot longer time to save the money for the house (money market saving in ING that can easily liquidate)? If i were to cash out before then, i'd have to pay for the tax and 10% penalty as well.
How do i strike a balance and still enjoy the 20K saved from the taxes?

Are the locations i mentioned above considered Prime property location? Obviously I am considering locations that are more upper-class due to a bunch of reasons (safety, exclusivity, ocean view, proximity to beaches, privacy, etc.)
Are you from CA? If so, where else should i consider?

I do plan to take a vacation every year to enjoy myself a bit with my family. so It's not all work and no play "make me crazy......" - Shining lol

jkc1029,

yes, you do want to strike the balance between current and long term. But from my perspective, your tax bracket is way too high (33% ad 10%) to not defer as much as possible. To me, the overall benefit will far exceed the cost if you look at things from a grand perspective. Look at it this way, you have 50K to invest in stocks, bonds now (in IRA) vs. 30K for more flexability and no strings attached. I rather work with 50K, it takes way too much to make up the working capital lost from tax. In this case 66% return (just to get back to 50K) without even counting accumulation. Forget extra saving, you'll be a multi-millionaire preserving and investing working capital like that by the time you retire.

You're better off getting a tax deductable loan and preserving working capital as stated above toward retirement, that is an easy choice. Again, things are not mutually exclusive. You can save for retirement and down payment at the same time, but to me, retirement benefit far exceed the latter.

I get the feeling that you are a different sort of breed but If something like this don't make sense to you, please just ask again so I can clarify.

Yes, but you mentioned places in SoCal which im sure others can later attest. In general, Norcal is not the same as SoCal where beachfront property are the nicest. In SoCal, it is obvious the best neigborhood hugs along the pacific coast, but in Norcal that is not the case. (with the exception of monterey bay but that is so far away from job center). It seem like you want to settle in SoCal so I'll just defer to others where the best places to live. (If it was me, albeit not 100% familiar with SoCal I would choose Newport Beach for what you described. safety, ocean view, beaches, privacy, relatively close to LA.

Newport beach is good in what you described, but i get the sense of snobbishness that I wouldn't find in other locations that consist of more old-money types. Newport beach is such a new-money town everybody seem to be flashing their cash with limbo, mercedes, bmw, etc. and too many spoiled youngsters with daddy's cash like there's all these cheap money getting thrown around.
not that i don't like nice cars, but i only have my eyes on porsche.
I prefer a nice suburb where i don't feel i have to compete with my neighbors on getting the latest model of everything. I'll take a look at the prices there though. But it's def. not my top choice to live in comparing to Malibu, Bel Air.. etc.

please don't take offense but a mercedes, bmw's are pretty practical cars. A 25 yo driving a porshe would appear the snobbiest of all. just saying.

not when driven by high-schoolers lol

Where the housing market will be in 2-3 years. Find a magic 8 ball and use it. You will find people here that will put up charts and graphs and stats that say we will drop another 10% in that time. Then someone else just as smart sounding will post up more charts and graphs and show expert testimony that says the market will rise 20% in that time. Then someone else will quote the mayan calander, the relationship of mars to venus, and tea leaves as saying the market will be flat for the next 3 years. No one here or out there knows what it will do.

This post just illustrated to me that one need not be smart to make money. A 25 year old making that much money that is as ignorant about just about everything as this OP? What are you doing to make all that money? Selling drugs?

Tude,

Blogging is for entertainment.

I have read a lot of facts on the internet, about the alien autopsy after Roswell, about Barbara Bush being a shape-shifting reptilian entity, all sorts of stuff.

Enjoy the entertainment.

Nomograph says

(1) Move out of your parents house. A twenty five year old person should be living independently, and you’ll never get laid while you live with Mom and Dad.

Personal question: May I quote you? :)

"(1) Move out of your parents house. A twenty five year old person should be living independently, and you’ll never get laid while you live with Mom and Dad."

I can assure you that this is most certainly not true. 27 years old here. Making more than 70 percent of American HOUSEHOLDS and I live at home with my mom. I've been laid plenty. In fact - I'm engaged. We're currently looking for a house but are not in any rush at all.

There's nothing wrong with living at home. The stigma on it is dumb when you consider that most other countries you live with family/extended family most of your life. It is incredibly practical and given the financial crisis this country just experienced - people in this country need a dose of practical.

TO E-Man & Tube, I am in Affiliate Marketing, I just got started last year. I do realize that this kind of market is quick-bucking and you never know when the opportunity will end. I definitely want to make as much as i can while i can and cash out in the end. I never really have held a steady 9-5 job and don't feel the need to find a job anytime soon, I do however outsource a few tech jobs in India (spend little $ to make big $$).
I have definitely gone thru the phrase of extreme spending spree like spending 10k in a few months partying, buying useless stuff, trips, etc. during my early twenties and now it's time to get serious for me and make enough $$ that i can rest easy for the rest of my life :)
I do understand that i'm making more $$ compared to most ppl my age, but living in bay area and comparing myself to geniuses and high-techies in Silicon Valley who make a few millions to 200Ms from startups before their 30s and not have to worry about $$ anymore.. I am definitely an ant compared to them, i guess it's all relative in how successful you think you are.

richnewton says

“(1) Move out of your parents house. A twenty five year old person should be living independently, and you’ll never get laid while you live with Mom and Dad.”
I can assure you that this is most certainly not true. 27 years old here. Making more than 70 percent of American HOUSEHOLDS and I live at home with my mom. I’ve been laid plenty. In fact - I’m engaged. We’re currently looking for a house but are not in any rush at all.
There’s nothing wrong with living at home. The stigma on it is dumb when you consider that most other countries you live with family/extended family most of your life. It is incredibly practical and given the financial crisis this country just experienced - people in this country need a dose of practical.

I agree--how can we expect someone making $250K per year to live on his own??

hmm.. what's your point? why does how i live my live matter to you and to the original question? lol

Do you really believe he is making $250k a year?

If someone is a millionaire, do you think he will post on a "house is too expensive forum" and ask strangers for advice?

He is coming here to show you that lots people are make millions in the Bay Area. The house prices will jump soon. He is more likely an out-of-job realtor.

A life of extreme frugality is generally an unhappy life, and a cheap person who lives with his parents is a huge red flag for most women

.

Let's not conflate frugality with cheapness. One is a virtue while the other is a bane.

I like what Simon Nelson Patten had to say a hundred or so years ago about what he regarded as the frugalist:

"The frugalist ... stands in marked contrast to the attitude of the capitalist. The frugalist takes a vital interest in his tools, in his land and in the goods he produces. He has a definite attachment to each. He dislikes to see an old coat wear out, and old wagon break down, or an old horse go lame. He always thinks of concrete things, wants them and nothing else. He desires not land, but a given farm; not horses or cattle and machines, but particular breeds and implements; not shelter, but a home ... He rejects as unworthy what is below standard...Dominated by activities, the thinks of capital as a means to particular end."

Now granted...you said extreme frugality, which is fair. A life of extremes is bad idea when it comes to anything. Extreme flossing, for example...

lol conspiracy theory? what next? I am responsible for 911 and wall street crash?
I am simply stating some of my financial stats here to get some advise from others i assumed more experienced real estate speculators to see where i stand. I am of coz going to find myself a financial adviser at the end of the year to figure out my fiances/taxes and future plans.
If i were you, I would bet that you're just trying to provoke me to prove/tell you what kind of biz im running and how you can make that much money which im not gonna tell. :) Why would i want more competition for my biz that makes me a good living?
Plus i ain't a millionaire yet, you're right on that, if i were one, i would be too busy looking up on real estate sites and finding realtors and good deals than to troll around here asking strangers for advise. Hopefully i'll be one soon enough.
anyway.. i've gotten good advise from the first two comments, the rest are just not much help.
peace out.

Well you've already released that you're into affiliate programs. What kind of programs are you promoting? To do well in affiliates requires quite a bit of hard work and knowledge of how to really garner customers. In general it takes many many years to build a selection of sites to promote various sites.

Most people wouldn't be able to copy an affiliate program that was doing that well anyways. It's like giving away most of the information surrounding google, you still couldn't replicate it's success.

You should get advice now in terms of finance. Your affiliate sales don't necessary have to take place in the US, neither does any part of your business. You should get some real good advice, and sooner than later.

all i can say.. is i've been passionate on websites/programming since around the time yahoo made its appearance. So i have a lot of knowledge as to how to do a web startup as i gained experence over the years making different sites.
I only have one site for now in the "entertainment niche" that i started out as an idea. Then I found that i can make a lot of money by promoting related products on various sites thru my site and it soon catch on to the point that i can pay a development team/marketing/SEO team, etc. to further my biz while i sit on the management side of things and still enjoy a huge profit every month thru outsourcing.

Just like yahoo makes its money on advertising/affiliates/paid service etc. and have different streams of revenue coming in every single day. :)

porn, he's in porn.

guys, leave him alone about his profession. I think some of you are just jealous.

OP, keep saving but move out of your parents... maybe move in to a big bachelor pad with some friends. I had the best times living with my buddies and saved a ton of money versus living by myself.
BBQs every weekend and some crazy parties.

Usually it takes quite a few iterations, and multiple years to get a good selling mix, which I thought was unusual, as it's not very common to get such high yields right off the bat with affiliates. Good job though.

Anything adult related is very saturated, and requires a tremendous amount of work to maintain the user base. Getting knocked down just a few positions in search rankings can be the difference between making any money and making large amounts. You might be better off saving for another year, to ensure your market isn't going to evaporate on you.

Sf ace and others have given pretty good advice on here how to live a little and save. I would definitely get some advice on taxes though. Many affiliate programs run off shore because the entire business lends itself to that kind of operation. Nothing needs to be locally done, served or shipped.

This may be a useless observation.

You are probably the first person I've ever encountered that makes that much money, and uses "lol" in messages so frequently.

:/

Serpentor says

porn, he’s in porn.

Actually, porn websites do not make a lot money.

Why does anyone want to give away his credit card number to an unknown website, while he can get all these cool videos for free from Bit Torrent?

Have you considered investing in the city of Monte Sereno or Los Altos?? I don't know how important it is to be relatively close to your family, but those are upscale towns. Also, congrats on doing so well at such a young age. It's good that you are being careful with your money because websites have their ups and downs and your income is affected by recessions and how much these advertisers are willing to pay. Save as much as you can put down as much as possible when buying your home.

I have long concidered changing my on-line posting income to something more like 1 HaHa (only the long timers will get that)

I have also thought about having my online persona by a Nemph named Trixy, 36-24-38, that strips for a living ....

I am just so much cooler on-line. lol lol lol lol l o l

I doubt any bank will give you a loan when your work history is so short and you are self employed. Odds are that you won't be making this much money in a few years or down the road. Since you work from home why not move to a really cheap area and buy a big house there for like 200k cash?

From the way the original post was written, it looks like he literally just landed that job if any. Saving 150k/year, and almost hitting the 200k mark.

For me, I'm will have almost saved up $200k as well. Only $199,999 to go! Woohoo!

JKC...

You asked 4 questions, but let's be honest about your claims.

How much longer will the real estate market stay down for in California?
>>It's all supply demand stuff, but as long as foreclosures and other must sell inventory hits the market, prices are pressured lower. How long is a guessing game, but real inventory and shadow/upcoming inventory is over 5 years at current sales rates, so it could be a while. The flip side is the gov't is doing anything possible to keep prices high to prevent more strategic defaults etc. I would say the bay area will not see rising prices for 5 years - but that is just a guess and I have been wrong before. Also, the interest rate movement will have a profound effect on the house prices - and don't think rates cannot move lower or that they have to move higher. Both are possible - as Japan has like 1% mortgages for qualified individuals.

i also think if the location is prestigious, it will hold value longer and appreciate much higher at a faster rate than other locations, am i correct?
>> Not sure on this one. But in general, if you can afford a better area with natural limits on supply and rental parity - go for it.

should i keep saving and investing safely with that 200k till i reach 1M to buy a nice place to live?
>>you don't have 200K, so don't talk about it as if you do. you said you "should" have it next year, if you save 150K/year. so therefore, you have 50K - talk in the present about that money. but to answer - keep saving.

or buy it with 200k down and pay the mortgage off ASAP in a few years?
>> see above, you cannot afford anything you want now with 50K down. and you also cannot afford a 3,000,000 house anytime soon as your income does not support that mortgage payment - even with 1,000,000 down - which again you do not have. so keep saving.

Now to crunch some numbers. If your are making 250K/year and have less than 30K/year expenses, you should be saving money at 12,500 per month. With your 50K in the bank, you've been ~4 months making your current salary/savings rate. Talk about 250K/year once you have at least made it ONE year - so far you have made 83K the past 4 months, and put away 50K. You want a house anywhere from 700K to 3,000K (quite a range indeed) and you want to put at least half down - 350K to 1,500K. So you're a ways to go to hit that DP target - ~2years to ~8years (with some compounding interest.)

Now to the honesty part... I'll bet you are single, live with your parents, and never held down a 9-5 job- the rest is pure bull. I wouldn't be surprised if you are getting hoodwinked into spending some money on an affiliate marketing program which is nothing more than a MLM scam. You keep 'investing' and looking at the potential - meanwhile the ponzi is quietly collapsing.

All of your comments below point towards someone who wants to be rich - not someone who is on their way to be rich :

now it’s time to get serious for me and make enough $$ that i can rest easy for the rest of my life :)

I am of coz going to find myself a financial adviser at the end of the year to figure out my fiances/taxes and future plans. (so you started last year but made no money???)

not that i don’t like nice cars, but i only have my eyes on porsche.

Hopefully i’ll be one (a millionaire) soon enough.

And now for some advice. Whatever you have invested in this scheme - it is gone, never to be reclaimed or compounded into earnings. If you are in debt - be honest about how bad you are really in, and get professional advice on possibly declaring bankruptcy. Don't think you can make money in the real estate market. Stop dreaming and start working.

Bap33 says

I have long concidered changing my on-line posting income to something more like 1 HaHa (only the long timers will get that)

Bap, I miss the Ha Ha's. . . . That was about 4 years ago, but I have people in my office saying this now--that's how catchy it is, because we all know what a joke it is if we make a Ha Ha, and we can all be kablooey tomorrow with no more Ha Ha :*(

lol you got my site.. http://www.tvlinko.com ok now you know how i make my $$$

To pkennedy, You're right, most affiliates take years to develop and tune their sites into making first page of google and make thousands a day. But you're forgetting how many movie and tv sites/guide out there on the internet, I'm getting huge traffic through referral traffic alone and the best part is they are all movies/tv targeted traffic which make me huge income from CPA. I am making so much that i have no problem paying The best Indian programmers/SEO teams/developers to improve my site and with heavy SEO plan, my site will be up on the first page of google in one year, which will make me thousands dollars a day in time) thru netflix affiliate (pay over $15 for one referral customer) and all other movie streaming/download sites affiliate programs out there.

If you wanna make some quick bucks, i can definitely show you the rope and get you started.. (i get percentage of sales for referring new affiliates)

And to Nomograph, if you think those stats can actually tell how much a site make in a day, or a month, you must be a newbie.
You have little idea how great my site can convert in CPA a day with all my free targeted traffic.

and to bought_high, if you actually think i am using one of those affiliate program get rich quick to make money, you must think im a newbie & stupid. :)
just to share my site real stats to all you guys, you will see how much traffic i get a day, so i ain't lying about the $$, not that i care.
http://whos.amung.us/pro/stats/sgpr/
http://www.histats.com/viewstats/?SID=989494&SEID=
but i hate being called a liar who talk bull.

bought_high...
"And now for some advice. Whatever you have invested in this scheme - it is gone, never to be reclaimed or compounded into earnings. If you are in debt - be honest about how bad you are really in, and get professional advice on possibly declaring bankruptcy. Don’t think you can make money in the real estate market. Stop dreaming and start working."
I hate ppl who think they know everything... i bet you read 1 or 2 news on the internet about how people got cheated on MLM schemes or think they did (thinking by slapping all these affiliate banners on a site and you can make thousands a month on the first month with little traffic) the reason i have no problem showing my site.. http://www.tvlinko.com/

i know that even if people like you can see how much i have POCKET a month and how i do it.. you wouldn't have the gut or passion to commit and follow through to make it happen.
if everybody think like you do, there'd be no facebook or google, i mean why would they think about creating a site when there's already yahoo and myspace and friendster and hundreds failed to succeed before them right?? I bet if Mark Zucherberg were friends with a bunch of losers who keep telling him to give up wasting time creating Just another social networking site, Facebook will never be done and succeed.

But hey.. if you're happy about your life standard and getting to a million by retirement (which most people in America won't even be able to achieve).. fine but please don't judge how high i set mine.

Like Tony Robbins says, Life will pay whatever price you ask of it.
and Tony Robbins is right... that's how the rich get richer and the poor get poorer in America.. i've seen too much already in this post to show exactly what is wrong in America.

Success or Failure cycle

Belief/Attitude -> Potential -> Action -> Results -> back to Belief
if you have a good belief/Attitude, you tap more into your potential, you take more action, you get great results, reinforcing your belief to be more resourceful and gain more potential and do more action and get more, better results.
if you don't believe things are gonna work out, you take little potential, you take little action, and you get lousy, poor results, reinforcing your belief that it wouldn't work, then you take even less action, you get even lousier results.

all the posts here really reinforce my idea on why rich people stay in rich neighborhood and poor stay in poor. You can't succeed in life if you hang out with people who all they do are bitch about life and how banks screw them over and CEO make too much and crap like that. Instead of thinking like they do, modeling how they make money, raise your standard, make a decision, follow through and make it happen.

While I appeciate all the initial good and useful comments and posts by everyone, this will be my last post on this forum.. i don't need any more of these negative energy around my life telling me how to fail in life. SO much for a housing crash forum, i guess i really got what i asked for. Ha.
if anyone care to better their life, watch tony robbins
http://www.youtube.com/watch?v=UJmuy5xDi2Q&feature=related

Hmm I'm looking at tvlinko.com on quantcast.com which usually does a pretty good job of estimating traffic. For such small sites, it's not that accurate though, especially if they're not tracked. You've definitely got the poor demographic covered :D You're massively skewed towards $0-$30K/year earners and Hispanics. Your estimated traffic is 4K/month?

Even with massively "hidden" traffic that might be hidden from all of the standard tracking sites, you're looking at essentially $650/day to make $250K/year. The above stats show about 150 users a day. That works out to about $4300 CPM. Most sites get $1 CPM or less from google adwords. Maybe $4-10 for niche market. Your estimated earnings were $35 from one of the sites above which seems high even.

We're off by a factor of over 400X here by best estimates. Not to mention quantcast.com shows you having about 1K/month for most of last year, only moving up to 4K in the last couple of months. So last year, you would be closer to $16000CPM. Or put another way, every person would give you $15 or every person visiting, signed up for Netflix, a 100% conversion rate, compared with 1-3% for the industry. Your numbers are just way too far off. Which is unfortunate, because I would have loved to have discussed what you were doing.

xenogear3 says

Do you really believe he is making $250k a year?
If someone is a millionaire, do you think he will post on a “house is too expensive forum” and ask strangers for advice?
He is coming here to show you that lots people are make millions in the Bay Area. The house prices will jump soon. He is more likely an out-of-job realtor.

Ditto.. You will not find many 25 year olds making $250K at all. Even Warren Buffets kids are NOT swimming in mulla. They are pretty much on their own.

The OP emitted the heady aroma of fresh poop from the 'git go'. Poor grammatical skills for someone claiming to be making $250K a year~~~unless he was selling controlled substances (in which case poor grammar is a definite PLUS+++). Besides his claims didn't make sense: lives at home, makes $250K is 'frugal' but 'SHOULD' have saved $200K by 'next year' and is focused on a Porsche and living in Beverly Hills and Montecito (nothing frugal about ANY of that). You can't buy any house in the areas he mentioned with $200K down (which he 'should' have saved by next year). Not in this economy.

Bought_High nailed it.

Still, the OP posited a fun hypothetical question: Should a newly~rich (but frugal) babe, buy the ocean view mansion of his dreams (with a Porsche in the circular driveway), while prices are (comparatively) low, or should he put his desires on hold and wait a few more years in case the market tumbles further? Unfortunately once BS was called he fled the forum. :(

On the plus side, I found a pic of jkc online:

I don't quite remember, but how much $$ was one haha stands for? $100000?

JKC,

I don't claim to know everything - it's just you had the myopic thinking that is very similiar to MLM scam victims. I am glad you are not caught up in a MLM scam and wish you the best in your business. Sorry for judging you.

Keep saving it away though...

bought_high

I think a HaHA was $150K. Patrick would know.

Some people on this board are very smart. All you have to do is to ignore some of the skeptics.

Almost all smart people I meet are skeptics by default.

How can you not skeptic when people try to sell you a 50-year-old 1000-sq-ft old house for $1 million dollars.

It is not like easy to find a $100k job in the Bay Area either. Last time I checked, the unemployment rate is 10+%.

Of course, some people will tell me that these 10% people don't want jobs which pay less than $100k :)
They prefer stay unemployed.