1. Not more than 30% of income on housing (otherwise not enough for other things)
2. Rich can afford much more on education & saving for retirement
US Household Spending (2011)
Poor Middle Class Rich
Income Range ($15k-20k) ($50k-99k) (>$150k)
Food 10.0% 7.7% 5.5%
Housing 29.0% 27.0% 27.0%
Utilities 11.0% 8.0% 4.0%
Transportation 20.0% 21.0% 15.0%
Education 1.5% 1.3% 4.4%
Retirement Savings 2.6% 9.6% 15.9%
US Notes:
- many poor are getting food assistance; 15% below household poverty line $23k
- impact of high consumer debt not indicated
- average household debt 1965-1985 was 60% but started to rise after that
- Asian Americans have highest household income $65k (20% > whites; 100%>blacks)
Median Saving Hsehld Debt
Income Rate / income Remarks
US usd 50k 5% 130% 2008 avg hse price fell fr $220k to $140k
UK gbp 26k? 150% 1 in 7 shops closed in 2012
Canada cad 63k 3% 150%
Australia aud 66k 160%
Germany 90% Avg apt eur150k, house eur220k
France 80%
Italy 66% Fin trouble in 2012
Spain 124% Property bubble burst & fin trouble in 2011/12
Greece
Ireland eur 25k? 200% Property bubble burst & fin collapse in 2008
Holland eur 33k? 250% 2012 Prop prices 10% below 2008 peak
Japan
China
India
Singapore
Malaysia
EU stats 2011 http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/CH_06_2011/EN/CH_06_2011-EN.PDF
Housing ratios & guidelines :
- US house price = 4x household income; mortgage servicing < 30% income
- buy house if price <150x monthly rental; rent if price >200x rental
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