How much income paid for rent?

Intrigued by an MSNBC’s article titled Americans becoming increasingly house poor, Golbguru recently write an post inquiring people’s expense on housing. The MSNBC article only revealed that an average homeowner spends nearly 21% of their household income on housing, up from under 19% in 1999. Percentage-wise, Californian spend the most, 25.4% in 2005. The data includes many homeowners who bought their houses before the boom, thus, the 2 to 3% increase does not seem very dramatic. For more recent buyers, I do not know any friends who spend less than 25% (one couple bought earlier with 200K annual income) of their income on housing, most between 30 to 40%!

However, I did not find any percentage for renters. My further research found that the ratio really depends on the locality. In Golbguru’s case, he was able to pay only 11% of his gross household income (mainly two graduate students’ stipends) on rent, likely around $500 in a University subsidized apartment. Yes, an excellent job of Golbguru!

New York City is likely the other extreme, high rent and low vacancy. People not only need to get in line to rent an apartment, but also need to hire a professional broker for apartment hunt. According to New York City’s Economic Snapshot July 2006, the average monthly contractor and increased by 25% after adjusting for inflation, from $767 in 1991 to $956 in 2005. From the following picture, we can see average rent as % of average renter’s household income has also swelled from 34.4% in 1991 to 36.7% in 2005. It seems that not only the housing price soared, the rent was raised significantly too! I hope no one pay so much to stay in NYC. Of course, if you’re earning more than average renter’s household income and live under your means, you can beat those ratios.

I attended graduate school on the west coast, where rents are high. University housings are both cheaper and more convenient compared to local rental market. I was earning 23K annual stipend, but paid about 28% of my gross income for one room in a 2-bedroom university dorm. Despite the small annual raise of 1-3% of my stipends, when I finally graduated, I was paying 39% of my gross for the same room. A very good strategy to move out PhD students faster!

Right now, with 2 full-time job income, Jacqui and I are paying about 7% gross including cell phones and utilities, not much better than Golbguru, but way better than people in NYC and myself before. However, we’re looking for a reasonable upgrade in the next few months to have more space.


My family’s story in Chinese stock market.

Following our blog friend’s post on Shanghai volume , I want to share with you my family’s stories in China’s stock market. My mom has been in the market since I was in the secondary school. She lost half of her capital after more than 10 year’s investment. Up to two years ago, she was still struggling. However, since this year, every night when I talk to my mom, she will tell me how much more she could have earned if she had hold the stock longer, or had bought more. She put all our family savings into it now.

And one of our relatives, an 80 year old lady, frugal for her whole life, put all her money in the stock market too. She does not know how to use computer or internet. So she keeps calling my mom to help her excute the trade.

Yes, it is this scary! And I just can not persuade my mom to take the money out of the market. No way she will believe me when she sees the stock price going up so fast every day. Sometimes, I want to make up some emergency stories to ask her for moeny, because that’s maybe the only way to ask her to get some of her money out of that market. But I will feel guilty if I lie. Very difficult situation 😦

What is the gas mileage of your car?

Just came about an article on hypermiling: wringing every last ounce of fuel efficiency out of a car. The story starts with Wayne Gerdes’ going 2,254 miles driving a Honda Insight on a single 13.7-gallon tank of gas. When I bought my SUV, $600 a year on gas is maximum. Right now, I’m looking at north of $3000 a year (longer commute as well). This is indeed a large chunk of ongoing expense.

Here are the tips offered by the article:

  • Brake sparingly.
  • Time the stoplights on your commute route, and avoid red lights by adjusting your speed.

  • To idle is to sin.
  • If you’re going to be at a standstill for 10 seconds or more, cut off the engine.

  • Speed kills.
  • Follow the speed limit, or go at a slightly slower speed. The optimal speed seems to be ranging from 45 to 55 miles per hour.

  • Avoid the big chill.
  • “Today’s cars can’t kick into their most efficient mode — called “closed-loop operation” — until the engine is sufficiently warm.” Invest in an engine-block heater or always go the longest segment of a multi-segments trip.

  • Beware of drag.
  • Closed windows and no A/C are best.

  • Lose the weight.
  • Pay attention to load.
  • Try to keep gas consumption at a constant level instead of trying to maintain a constant speed, why you and not be honked by drivers after you.

  • Be not a hare.
  • Inflating tires to their maximum allowable pressure

  • Set up for success.
  • Inflate tires to their maximum allowable pressure and use synthetic engine oil.

Using the tips, I got 28mpg out of a SUV rated at 24 mpg at an average speed of 65mph. How about you? If you want more hypermiling tips, visit or Gerdes’ own Web site,