Quote:
Originally Posted by Rain Man
I don't know if this is relevant, but I'm an evangelist against commuting, so I'll present it here.
Assume that you have a 30-minute commute for 15 miles each way. What does that cost you?
Assume minimum wage for your time at around $7.50 an hour. So that's $7.50 a day for the round trip. Now assume 30 miles at an average vehicle cost of 50 cents per mile for maintenance, fuel, and replacement. That's $15 a day.
So you're paying $22.50 a day. If you work 21 days per month on average, that's $472 per month.
How much extra house can you get for $472 per month? Keep in mind that interest is tax deductible and that a house will generally appreciate slightly.
If you take what you would spend on a house, you can add $210,000 to the purchase price and still break even if the house is walking distance to work. The math goes like this, with a few assumptions.
Price increment: $210,000
Monthly payment (30 year loan at 3.75%): $972
Interest writeoff (assume half of payment is interest, and you write off 30% of that: $145 a month subtracted from your cost.
Appreciation (assume 2% over a given year on the price difference: $350 per month subtracted from your cost.
Total: $477 a month total cost.
Now, this is from a total wealth perspective. The house will cost you more cash flow because you're not getting paid minimum wage for your commute and you don't get immediate cash from appreciation, but if you don't like my analysis you can adjust downward and not pay the whole $210,000 to adjust that out. There's an increment on taxes and insurance and maintenance and stuff, too, that I'm ignoring for convenience, but you get the point.
Commuting is a terrible financial investment. It's essentially wasted money unless there's some absolutely compelling reason you have to do it. I recognize that there are some compelling reasons sometimes, but when you run the numbers it's far better to invest your wealth in real estate rather than gasoline and antifreeze. Assuming that you aren't also using the antifreeze to kill annoying people.
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well, what if you drive a company provided vehicle?
plus, it's worth something to me just to be able to spend 20 minutes of time, by myself, and kind of unwind before I get home. it's a quiet, peaceful ride(all country roads, usually don't meet any more than half a dozen other vehicles). I think it keeps me from being too much of an a-hole w/my family when I get home. hell, the wife wishes I worked farther away.
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