1M/year is roughly 500K after taxes in Bay Area. Starter house is bad school district (means you need to pay 25K-45K per year per kid for private school) is over 1M.
Sure, but a 1M mortgage is about 50K a year at today's rates. Let's say 30K for home upkeep, 10K to keep a car on the road, 10K for utilities, 20K for food and dining.
So 500K after tax - 90K private school for two kids - 50K mortgage payment - 30K - 10K - 10K - 20K = 290K in totally disposable post-tax income. Still not even remotely close to middle class.
sure 1M is OK in SF Bay area (you need to plan for retirement too). But even based on your calculations suddenly 500K is not enough to allow a middle class lifestyle.
A typical multiplier for house price and before tax income is 6. So you are saying a 1M house, but for 1M yearly income we should be taking about 6M house (assuming the spouse is not working). Now I definitely wouldn't call a 6M house middle class.
