Housing: this is kind of pretend, because we actually built two extra rooms onto our house, which had a high up-front cost but will be useful for years and will eventually make the house sell for more. I’m instead substituting the cost at which we currently rent our spare bedroom ($900/month times 2 bedrooms)
I think it’s unusual for people to rent out their spare rooms, and it’s good that you have done so and provided yourselves with more income/reduced your living costs. By that metric I imagine that many people (especially home owners) have higher housing costs than they think. Maybe EAs are more likely to think about this and maximise the efficiency of their housing. But at the limit, every loft, basement and garage not converted is counterfactual lost earnings. Or, indeed, you could say that real estate investment in general is profitable, and people should do more of it. But then so are other things. So any profits “left on the table” through suboptimally investing money are also potential “costs”… (and then here things get tricky, in determining what the optimal investments are. And we’re pretty much back to the foundation of EA! Optimal allocation of resources).
[As I’ve said elsewhere in this thread, I don’t think children are a special case of expensive. They are one of several things that can be expensive (see also: location, career choice, suboptimal investment, tastes, hobbies), and for most people, who aren’t already maximising their financial efficiency (frugality; investments), it’s a matter of prioritisation as to the relative expense of having them.]
I don’t know about elsewhere, but at least in the Bay the notion that people might have spare rooms they’ve just forgotten to consider renting out is downright funny.
I realise that. But I wouldn’t be surprised if the median household in the developed world had at least one spare room (this was one of the reasons why the “bedroom tax” was so unpopular in the UK).
Great to see the write up of expenditure!
I think it’s unusual for people to rent out their spare rooms, and it’s good that you have done so and provided yourselves with more income/reduced your living costs. By that metric I imagine that many people (especially home owners) have higher housing costs than they think. Maybe EAs are more likely to think about this and maximise the efficiency of their housing. But at the limit, every loft, basement and garage not converted is counterfactual lost earnings. Or, indeed, you could say that real estate investment in general is profitable, and people should do more of it. But then so are other things. So any profits “left on the table” through suboptimally investing money are also potential “costs”… (and then here things get tricky, in determining what the optimal investments are. And we’re pretty much back to the foundation of EA! Optimal allocation of resources).
[As I’ve said elsewhere in this thread, I don’t think children are a special case of expensive. They are one of several things that can be expensive (see also: location, career choice, suboptimal investment, tastes, hobbies), and for most people, who aren’t already maximising their financial efficiency (frugality; investments), it’s a matter of prioritisation as to the relative expense of having them.]
I don’t know about elsewhere, but at least in the Bay the notion that people might have spare rooms they’ve just forgotten to consider renting out is downright funny.
I realise that. But I wouldn’t be surprised if the median household in the developed world had at least one spare room (this was one of the reasons why the “bedroom tax” was so unpopular in the UK).
There’s actually a lot of underutilized real estate in the Bay Area, especially in East Bay, Marin, South Bay, and the Peninsula.
Much of it is locked up in big old houses that haven’t turned over in a long time though.