Stay or move is the financial question.
Stay or move is the financial question.
My husband has a job opportunity to move to the bay area for 10K more than his current salary. Currently, we live in the country in a 3300 sf. Home with 10 acres of land and a pond full of fish. We are 25 minutes away from down town Dallas. We bought the house at 360K and will able to sell for 400K per our realtor. We have no mortgage and property tax is $4800 a year. We can’t afford San Francisco or San Jose housing therefore we will have to find something that under 400K, small home with a lot of land. Commuting isn’t a problem since I can work from home and my husband job is driving around from Sacramento to the bay area. Stockton, Merced or Modesto isn’t an option due to the fact that these cities are unsafe to raise children. My husband doesn’t really want to move because he loves it here. He doesn’t think 10K is enough to move. I want to move because I like tall trees and mountain. Our income will be around 180K including the 10K raise for moving. We live very well here and able to save a lot of money every month after all expenses. We are not sure if we can find such property in California for less than 400K. We don’t want a mortgage so we have to stay under 400K. Which area should we live and able to afford it? Thanks
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Re: Stay or move is the financial question.
If you move to the Bay area for only a $10K pre-tax raise, you will have a much lower standard of living, including enormous taxes, horrible commuting and wildly expensive housing.
I wouldn't do it for less than a 50% raise, if even then.
I wouldn't do it for less than a 50% raise, if even then.
In theory, theory and practice are identical. In practice, they often differ.
Re: Stay or move is the financial question.
You would almost certainly come out FAR behind trading $170K in income outside of Dallas for $180K of income in the Bay Area.
Economically, this is kind of a no-brainer.
That said, if you have other motives (either more attractive job in general in the Bay Area, or a strong desire for that geographic area), then perhaps the sacrifice is worthwhile.
From your post though, there is no mention of the potential job in the Bay Area being superior in other ways. Your husband seems against it. Your only real plus for this is that you like tall trees and mountains. This seems like a large sacrifice to make for one partner's attraction to tall trees and mountains. That said, if you feel that strongly about it, perhaps you could look in other parts of the country for the geography you prefer, but with better economics. Or, you could hold out for a Bay Area position for your husband with a much better salary.
Economically, this is kind of a no-brainer.
That said, if you have other motives (either more attractive job in general in the Bay Area, or a strong desire for that geographic area), then perhaps the sacrifice is worthwhile.
From your post though, there is no mention of the potential job in the Bay Area being superior in other ways. Your husband seems against it. Your only real plus for this is that you like tall trees and mountains. This seems like a large sacrifice to make for one partner's attraction to tall trees and mountains. That said, if you feel that strongly about it, perhaps you could look in other parts of the country for the geography you prefer, but with better economics. Or, you could hold out for a Bay Area position for your husband with a much better salary.
Last edited by psteinx on Tue Mar 11, 2014 3:36 pm, edited 1 time in total.
Re: Stay or move is the financial question.
It is a bad idea to go to the Bay Area for only a 10k increase in income. Your standard of living will fall dramatically.
Re: Stay or move is the financial question.
You are going to lose money after pay CA income tax. The good news it doesn't sound like you want to leave in the bay area. Living out in Sacramento is a lot cheaper.
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Re: Stay or move is the financial question.
Perhaps you can get your tree & mountain fix by spending a few weeks at Lake Tahoe each year. Hotel rooms at the casinos are crazy cheap (~$75/night for long stays) even during ski season, and a season's pass to Heavenly can be had for about $350.
Re: Stay or move is the financial question.
+1technovelist wrote:If you move to the Bay area for only a $10K pre-tax raise, you will have a much lower standard of living, including enormous taxes, horrible commuting and wildly expensive housing.
I wouldn't do it for less than a 50% raise, if even then.
"Discipline equals Freedom" - Jocko Willink
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Re: Stay or move is the financial question.
Is the career opportunity/growth better? is there a chance for him to move up higher and quicker in the Bay Area?
Re: Stay or move is the financial question.
Sacramento is a great choice. It's a great place to raise kids, and for $400k, you can buy 2 or 3 houses and become a landlord for extra income. Foreclosure numbers are still increasing and prices are still falling, whereas the rest of the country has pretty much turned around, and the bottom is likely behind us. When things recover in the Bay area, there's spillover into Sacramento. A lot of good companies that couldn't afford to stay in the Bay area expanded out to Sacramento, and will likely return. That and all the state government jobs make it a long term stable place to settle. Plus as someone mentioned, it's half way between Bay area and Tahoe.ktd wrote:We can’t afford San Francisco or San Jose housing therefore we will have to find something that under 400K, small home with a lot of land. Commuting isn’t a problem since I can work from home and my husband job is driving around from Sacramento to the bay area. Stockton, Merced or Modesto isn’t an option due to the fact that these cities are unsafe to raise children. ...We are not sure if we can find such property in California for less than 400K. We don’t want a mortgage so we have to stay under 400K. Which area should we live and able to afford it? Thanks
Re: Stay or move is the financial question.
+2technovelist wrote:If you move to the Bay area for only a $10K pre-tax raise, you will have a much lower standard of living, including enormous taxes, horrible commuting and wildly expensive housing.
I wouldn't do it for less than a 50% raise, if even then.
A happy father and tepid lawyer, trying to do the right thing
Re: Stay or move is the financial question.
Well, since you asked "stay or move", I vote stay. 10k is not enough to make this worth it. If scenery is what you need, take more vacations. With your current low cost of living, you can afford it.
Re: Stay or move is the financial question.
I agree Sacramento is a great choice for your situation, but it's nowhere near that cheap. Sacramento has seen a rebound like other markets have since 2012 and has lacked for inventory, though price growth leveled off when interest rates increased. For $400k, you will get a smaller home (like 3/1, 1400 sf) in the desirable city neighborhoods or a newer 2,000+ sf home in the outer suburbs. Either way, your dollar will go much farther than in the Bay Area. You can have a pretty comfortable life earning $180,000 in Sacramento in a good neighborhood with enough money to save for retirement, go on vacations, head up to Tahoe and enjoy some good meals. The same cannot be said about the Bay Area neighborhoods with good schools that I'd presume you would want. For the house/neighborhood you'd get in Sacramento for $400,000, it might cost you $800,000 in the Bay Area.inbox788 wrote:Sacramento is a great choice. It's a great place to raise kids, and for $400k, you can buy 2 or 3 houses and become a landlord for extra income. Foreclosure numbers are still increasing and prices are still falling, whereas the rest of the country has pretty much turned around, and the bottom is likely behind us. When things recover in the Bay area, there's spillover into Sacramento. A lot of good companies that couldn't afford to stay in the Bay area expanded out to Sacramento, and will likely return. That and all the state government jobs make it a long term stable place to settle. Plus as someone mentioned, it's half way between Bay area and Tahoe.ktd wrote:We can’t afford San Francisco or San Jose housing therefore we will have to find something that under 400K, small home with a lot of land. Commuting isn’t a problem since I can work from home and my husband job is driving around from Sacramento to the bay area. Stockton, Merced or Modesto isn’t an option due to the fact that these cities are unsafe to raise children. ...We are not sure if we can find such property in California for less than 400K. We don’t want a mortgage so we have to stay under 400K. Which area should we live and able to afford it? Thanks
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Re: Stay or move is the financial question.
There are some nice things about the Bay Area - climate, culture, and a fantastic job market - but on a purely economic basis, unless your husband has as decent shot at a much larger payout from an IPO the $10k raise isn't anywhere near enough to compensate for the guaranteed increase you'll be facing in housing and taxes. On http://www.bestplaces.net/cost-of-living/ it estimates that $170k in Dallas is approximately equal to $327k in San Jose.Currently, we live in the country in a 3300 sf. Home with 10 acres of land and a pond full of fish. We are 25 minutes away from down town Dallas. We bought the house at 360K and will able to sell for 400K per our realtor. We have no mortgage and property tax is $4800 a year. We can’t afford San Francisco or San Jose housing therefore we will have to find something that under 400K, small home with a lot of land.
The lifestyle you have now isn't available in the Bay Area. Period. You're looking at very long commutes from exurbs. If you really want to do a rural/acreage "trees and mountains" lifestyle in the Bay Area, look in the Santa Cruz Mountains - much nicer IMHO than being out in Merced, Modesto, etc. Or, if you want this lifestyle at much lower cost than California, you do what many Texans seem to do and move to Colorado
Re: Stay or move is the financial question.
I lived 15 years in the Bay Area and would take a 50% pay cut to live there instead of 25 minutes outside of Dallas! Well I suppose that's a slight exaggeration but still... I too like trees and mountains. And oceans and beaches. And... well, politics is banned on this forum.
But... Bay Area traffic is kind of hell and your husband's job "driving around from Bay Area to Sacramento" - not sure what it is specifically, but it could be hell-squared for him. If it were me and I was forced to drive that territory, and had a family, I'd want to live in Davis, it's in the middle and is a pretty cute/hip town, kid-friendly (with good schools thanks to the UC campus effect), and very bike-friendly. And while the environment around Davis is about the least attractive in the whole region (bike-friendly also meaning "completely flat") and the microclimate's not so great either (the 'tule fog' can be gruesome) it's handy to Tahoe, Napa, Delta boating, inner tubing on Cache Creek, etc. Looks like you could get something decent for $450K there but I'd recommend you rent for a while and see how you like it.
But... Bay Area traffic is kind of hell and your husband's job "driving around from Bay Area to Sacramento" - not sure what it is specifically, but it could be hell-squared for him. If it were me and I was forced to drive that territory, and had a family, I'd want to live in Davis, it's in the middle and is a pretty cute/hip town, kid-friendly (with good schools thanks to the UC campus effect), and very bike-friendly. And while the environment around Davis is about the least attractive in the whole region (bike-friendly also meaning "completely flat") and the microclimate's not so great either (the 'tule fog' can be gruesome) it's handy to Tahoe, Napa, Delta boating, inner tubing on Cache Creek, etc. Looks like you could get something decent for $450K there but I'd recommend you rent for a while and see how you like it.
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Re: Stay or move is the financial question.
Take it from a Californian -- if the only thing being offered is a $10k salary bump, decline and don't give it a second thought. Taxes will eat you alive at that salary, particularly in San Francisco (but anywhere in CA is bad), as will the monstrously higher cost of living. You will be far, far better off where you are, from a financial point of view. So will your children.
Are they also offering a potential package such as ESOP, stock grants, bonus, etc.? If a seven-figure package is not on the table, then I'd demand double the salary to move to the Bay Area. Not joking or exaggerating. You will be in one of the most expensive areas in the country and competing for resources against tech millionaires and billionaires.
Are they also offering a potential package such as ESOP, stock grants, bonus, etc.? If a seven-figure package is not on the table, then I'd demand double the salary to move to the Bay Area. Not joking or exaggerating. You will be in one of the most expensive areas in the country and competing for resources against tech millionaires and billionaires.
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Re: Stay or move is the financial question.
This!freebeer wrote:I lived 15 years in the Bay Area and would take a 50% pay cut to live there instead of 25 minutes outside of Dallas! Well I suppose that's a slight exaggeration but still... I too like trees and mountains. And oceans and beaches. And... well, politics is banned on this forum.
(and I agree with other posters that the cost-of-living adjustment should really get you more than a $10k salary bump)
Re: Stay or move is the financial question.
Thanks all for your comments. How do people live in the bay area? I looked at Forbes.com for median income of 2012 and San Francisco is $77,693 and Dallas is $60,383. If it is so much more expensive than Dallas then median income doens't say so. We are not trying to live in San Francisco anyway. We are looking for land somewhere with a lot of trees and mountains surround our property. Here is the link to Forbes for median income.
http://www.forbes.com/places/tx/dallas/
http://www.forbes.com/places/ca/san-francisco/
http://www.forbes.com/places/tx/dallas/
http://www.forbes.com/places/ca/san-francisco/
Re: Stay or move is the financial question.
People make sacrifices to live in the Bay Area. If a greater share of income has to go to housing and transportation, it means that much less for saving, dining out and vacations. Housing is just one part of the equation; you will also pay income taxes in California, which could consume much of that $10,000 raise no matter where you live in the state. This is not meant to drive you away from California - on the contrary, we love it here and would never leave - but you do have to sacrifice a certain standard of living you might enjoy on the same salary elsewhere.
Also consider that you're asking this on Bogleheads, and most of us believe that a family earning $180,000 should prioritize maxing out 401ks, IRAs and other savings vehicles ahead of housing and discretionary spending. Undoubtedly, many middle-class families are sacrificing their future retirement to enjoy living in the Bay Area today.
Also consider that you're asking this on Bogleheads, and most of us believe that a family earning $180,000 should prioritize maxing out 401ks, IRAs and other savings vehicles ahead of housing and discretionary spending. Undoubtedly, many middle-class families are sacrificing their future retirement to enjoy living in the Bay Area today.
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Re: Stay or move is the financial question.
You have to scale that, though. That's actually about a 30% increase in median income. An equivalent 30% increase in your husband's income would take him to $221,000 - a $51k raise just to come out maybe a *tiny* bit more even-ish. In contrast, a $10k raise for your husband is less than a 6% raise.ktd wrote:Thanks all for your comments. How do people live in the bay area? I looked at Forbes.com for median income of 2012 and San Francisco is $77,693 and Dallas is $60,383. If it is so much more expensive than Dallas then median income doens't say so.
I wouldn't change jobs for 6%, much less move to another state, even without considering the cost of living increase.
Re: Stay or move is the financial question.
+3technovelist wrote:If you move to the Bay area for only a $10K pre-tax raise, you will have a much lower standard of living, including enormous taxes, horrible commuting and wildly expensive housing.
I wouldn't do it for less than a 50% raise, if even then.
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Re: Stay or move is the financial question.
+1000 - No way would I move for less than a penny after-tax, inflation and cost of living. That is just insane!Luke Duke wrote:+3technovelist wrote:If you move to the Bay area for only a $10K pre-tax raise, you will have a much lower standard of living, including enormous taxes, horrible commuting and wildly expensive housing.
I wouldn't do it for less than a 50% raise, if even then.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: Stay or move is the financial question.
Not sure why everyone is focused on the Bay Area, when OP said, "We can’t afford San Francisco or San Jose housing therefore we will have to find something that under 400K, small home with a lot of land. Commuting isn’t a problem since I can work from home and my husband job is driving around from Sacramento to the bay area."
Most of my time in Northern California was before having kids, so I don't know the school districts well enough to say for sure, but Davis and some areas outside of Sacramento are nice, and I'm sure you can get a decent place for under $400k. It might not be 3300 sf, but you can use your outside space a lot more, which offsets the lower interior square footage. In my view, it would be worth a bit of a decline in take-home pay to live within a short drive of Napa, SF, Yosemite, Tahoe, etc., instead of the Dallas area.
Most of my time in Northern California was before having kids, so I don't know the school districts well enough to say for sure, but Davis and some areas outside of Sacramento are nice, and I'm sure you can get a decent place for under $400k. It might not be 3300 sf, but you can use your outside space a lot more, which offsets the lower interior square footage. In my view, it would be worth a bit of a decline in take-home pay to live within a short drive of Napa, SF, Yosemite, Tahoe, etc., instead of the Dallas area.