You could afford the $250K house, but not the Ferrari. I know this b/c my hubby made $190K last year. We have a $315K mortgage and our two (normal) cars are paid off. We are quite comfortable but we are not rich by any means. You could get the $250k house, but if you get a car that costs more than $30k or so you will just be living to pay the car payment. It's a bad investment b/c the value will go down, while the home is a good investment b/c the value will go up. Of course, the amount of property taxes you pay gets added to the monthly payment on the house, and that can be pricey. Our taxes are $8800 a year. Plus Uncle Sam will take about a third of your paycheck, leaving you with only about $80k a year. Btw, $120k in Texas or Kansas will get you a lot further than $120k in NY where I live! Your best bet is to live as cheaply as possible (buy a condo) and then use your savings to buy rental properties that will give you positive cash flow, and buy your Ferrari with your investment earnings!