Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

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HEDGEFUNDIE
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by HEDGEFUNDIE » Mon Jul 22, 2019 11:17 am

HomerJ wrote:
Mon Jul 22, 2019 11:14 am
HEDGEFUNDIE wrote:
Sun Jul 21, 2019 9:18 pm
Sure, it’s true that not everyone in the Bay Area is making tech money, but it’s also true that even in the Bay Area, less than half of adults hold a 4 year college degree. How relevant then do you think the averages are for a Boglehead poster?

What I have been trying to convey with my posts here is that in the Bay Area, it’s not just the 1% coders who are making “tech money”. It’s ordinary finance managers and sysadmins at public hospitals as well. And there are hundreds of thousands of us. How else could the median home price be sustained at well over $1M?
You've made very good points.

Maybe when my kid graduates high school next year, I'll take a look at some jobs in CA... :)
Happy to help get you acquainted with the area HomerJ!

PeterParker
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by PeterParker » Tue Jul 23, 2019 4:30 pm

I'm not sure why this thread is so complicated.

Some jobs (not many, TBH, not many at all) --- the income is relatively stable across cities and countries. Who am I kidding, I can literally think of zero jobs that would pay you the same in NYC as they would in the Phillipines, unless they are literally remote work jobs.

Now yes, there are different opportunities in different locations. Sometime if you're in an area where Western workers are in short supply, it can buffer up your income.

But let's get back to the heart of this question. It wasn't asking about working in the developing world. It was about living in Podunk, Arkansas vs Chicago/ Dallas vs. NYC/ San Fran.

In that case, the answer may anger you --- it ABSOLUTELY makes sense from a pure financial perspective to move to the HCOL areas.

Saving 30% of a $200,000 job is a lot more than saving 30% of a $100,000 job, even if you are living the similar lifestyle with both incomes due to Cost of Living.

Presumably these two people would live identical lives.

Until you realize that due to the international economy, the HCOL can buy certain items (cars, electronics, toys) at the same price. And if the HCOL person moves to a LCOL area in retirement, they have essentially doubled the purchasing power of their savings. Not to mention moving to Thailand or the Phillippines (takes a certain type) and living literally like a King.

Of course Geo-arbitrage works. Most people are too lazy, though. Myself included. I have no burning desire to live in SFO or NYC, although NYC sounds like it could be fun.

Just start your own business, one that targets wealthy whales. Then you can live anywhere and make high income. Problem solved.

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HomerJ
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by HomerJ » Wed Jul 24, 2019 11:44 am

PeterParker wrote:
Tue Jul 23, 2019 4:30 pm
Saving 30% of a $200,000 job is a lot more than saving 30% of a $100,000 job, even if you are living the similar lifestyle with both incomes due to Cost of Living.
Yes, this is true.

Not all jobs give that much of a premium though. If YOUR job gives that much of premium, it's probably worth moving.

If your job gives less of a premium (say 30%-50% more instead of 100% more), the math gets more complicated.
The J stands for Jay

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by Sandtrap » Wed Jul 24, 2019 11:51 am

It is near undeniable that moving from a UHCOL or HCOL area to a LCOL area "at or after" retirement is "wealth preserving".
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furnace
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by furnace » Wed Jul 24, 2019 11:59 am

You can get rich anywhere (or nowhere). The individual trumps the location.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by ray.james » Wed Jul 24, 2019 12:14 pm

Savers will reap the benefits in HCOL places especially when they are starting their career. Ofcourse, the quality of life will be lower in terms of housing situation and commute, but they will come far ahead in savings. It is much easier to save a lot in tax advantaged accounts when one is making 100k as starting salary. If most folks they know live with roommates/small apartments; cognitively it is not a big deal either, for self.

The situation changes once kids come into picture. A lot of folks whose combined income is under 120K try to leave HCOL like Bay area once kids come into picture. However if they were working for 5-8 years since college, they are sitting on on 150-250k of savings or paid off student loans etc.,
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by bluebolt » Wed Jul 24, 2019 4:27 pm

Some of the most successful people I've worked with have executed the following strategy:

1) Get a job at a successful company in a VHCOL/HCOL area
2) Make yourself invaluable/irreplaceable to said company
3) Relocate to a MCOL/LCOL area as a remote employee

Then, you have the best of both worlds. A HCOL salary in a M/LCOL area. You may have to travel more frequently than you would have otherwise, but it could accelerate reaching your goals dramatically.

Granted, not everyone has the skills & luck to execute this strategy, but I know of a handful of folks personally who have done it.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by PeterParker » Wed Jul 24, 2019 5:27 pm

furnace wrote:
Wed Jul 24, 2019 11:59 am
You can get rich anywhere (or nowhere). The individual trumps the location.
This isn't as true as you think.
It's something we'd like to tell ourselves though.

How many tech millionaires are coming out of Cameroon? Exactly.
Also, the exact same thing (geo-arbitrage) can be applied to the dating market.

Yes, a male "George Clooney" will presumably do better based on his individual merits compared to Joe Sixpack.

However, there are many countries (arbitrage markets) where Joe Sixpack will have 1000% more success. Not just Asian and European markets, but Russia is a big one for American men. For literally no reason other than novelty factors/ general foreign intrigue (not money as most people assume, though it's case by case).

The same can be applied to job skills.
I'm not saying to ignore individual merits and skills, but to myopically focus on them? It's good to think outside the box. Not everything requires hard work...

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by visualguy » Wed Jul 24, 2019 5:31 pm

bluebolt wrote:
Wed Jul 24, 2019 4:27 pm
Some of the most successful people I've worked with have executed the following strategy:

1) Get a job at a successful company in a VHCOL/HCOL area
2) Make yourself invaluable/irreplaceable to said company
3) Relocate to a MCOL/LCOL area as a remote employee

Then, you have the best of both worlds. A HCOL salary in a M/LCOL area. You may have to travel more frequently than you would have otherwise, but it could accelerate reaching your goals dramatically.

Granted, not everyone has the skills & luck to execute this strategy, but I know of a handful of folks personally who have done it.
I've seen such cases as well, but most of them didn't last very long - a few years at most. Cases where people can make this arrangement survive long-term are fairly exceptional in my experience, so quite risky, but it does work out in some cases.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by thepicard1 » Thu Jul 25, 2019 12:56 am

Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.

My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.

In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by KyleAAA » Thu Jul 25, 2019 10:19 am

thepicard1 wrote:
Thu Jul 25, 2019 12:56 am
Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.

My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.

In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).
That was not my experience moving from MCOL to HCOL. Everything was significantly more expensive, not just housing. I pay 20% more for much lower quality food now, for example. If I wanted to eat out at comparable restaurants to what I was accustomed, that would go up by 50%. Likewise with car expenses, since taxes on both the car itself and gas are much higher. Which makes sense if you think about it: if rent is high, all those businesses pay higher rent, higher wages, etc. If you never actually do anything and order everything from Amazon then sure, you can keep costs down. But what’s the point living in a world class city if you’re going to do that? HCOL people still have an edge, but it’s not as large as all that.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by fareastwarriors » Thu Jul 25, 2019 10:58 am

KyleAAA wrote:
Thu Jul 25, 2019 10:19 am
thepicard1 wrote:
Thu Jul 25, 2019 12:56 am
Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.

My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.

In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).
That was not my experience moving from MCOL to HCOL. Everything was significantly more expensive, not just housing. I pay 20% more for much lower quality food now, for example. If I wanted to eat out at comparable restaurants to what I was accustomed, that would go up by 50%. Likewise with car expenses, since taxes on both the car itself and gas are much higher. Which makes sense if you think about it: if rent is high, all those businesses pay higher rent, higher wages, etc. If you never actually do anything and order everything from Amazon then sure, you can keep costs down. But what’s the point living in a world class city if you’re going to do that? HCOL people still have an edge, but it’s not as large as all that.


I agree with you. Almost everything is more expensive in HCOL area, not just housing. Then again, I'm not leaving.
Last edited by fareastwarriors on Thu Jul 25, 2019 4:34 pm, edited 1 time in total.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by dm200 » Thu Jul 25, 2019 11:26 am

fareastwarriors wrote:
Thu Jul 25, 2019 10:58 am
KyleAAA wrote:
Thu Jul 25, 2019 10:19 am
thepicard1 wrote:
Thu Jul 25, 2019 12:56 am
Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.
My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.
In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).
That was not my experience moving from MCOL to HCOL. Everything was significantly more expensive, not just housing. I pay 20% more for much lower quality food now, for example. If I wanted to eat out at comparable restaurants to what I was accustomed, that would go up by 50%. Likewise with car expenses, since taxes on both the car itself and gas are much higher. Which makes sense if you think about it: if rent is high, all those businesses pay higher rent, higher wages, etc. If you never actually do anything and order everything from Amazon then sure, you can keep costs down. But what’s the point living in a world class city if you’re going to do that? HCOL people still have an edge, but it’s not as large as all that.
I agree with you. Everything is more expensive in HCOL area, not just housing. Then again, I'm not leaving.
Not necessarily. it all depends on the details. Many HCOL localities, such as mine, have programs and services - either at no charge or minimal charges (especially for Seniors) that are not provided or are most costly in LCOL areas.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by willthrill81 » Thu Jul 25, 2019 11:33 am

KyleAAA wrote:
Thu Jul 25, 2019 10:19 am
thepicard1 wrote:
Thu Jul 25, 2019 12:56 am
Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.

My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.

In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).
That was not my experience moving from MCOL to HCOL. Everything was significantly more expensive, not just housing. I pay 20% more for much lower quality food now, for example. If I wanted to eat out at comparable restaurants to what I was accustomed, that would go up by 50%. Likewise with car expenses, since taxes on both the car itself and gas are much higher. Which makes sense if you think about it: if rent is high, all those businesses pay higher rent, higher wages, etc. If you never actually do anything and order everything from Amazon then sure, you can keep costs down. But what’s the point living in a world class city if you’re going to do that? HCOL people still have an edge, but it’s not as large as all that.
Something that many people don't understand is that if everyone's net worth in nominal dollars was multiplied by a factor of 10, it wouldn't change anything in a meaningful way. Wealth can only be identified as such on a relative basis, and if everyone's wealth was multiplied in this way, no one's wealth would actually change.

It a bit like that in HCOL areas. People are getting paid more, but they and the businesses that employ must in turn charge more for their goods and services. They don't call it a high cost of living area for nothing.

I still believe that the real advantage that a HCOL can potentially bring to the table is to allow an individual to build up significant wealth compared to those residing in LCOL areas and to subsequently retire to a lower COL area. If they remain in a HCOL area indefinitely, I don't see a major financial advantage in residing there compared to doing the same in a LCOL area.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by HEDGEFUNDIE » Thu Jul 25, 2019 11:40 am

willthrill81 wrote:
Thu Jul 25, 2019 11:33 am
KyleAAA wrote:
Thu Jul 25, 2019 10:19 am
thepicard1 wrote:
Thu Jul 25, 2019 12:56 am
Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.

My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.

In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).
That was not my experience moving from MCOL to HCOL. Everything was significantly more expensive, not just housing. I pay 20% more for much lower quality food now, for example. If I wanted to eat out at comparable restaurants to what I was accustomed, that would go up by 50%. Likewise with car expenses, since taxes on both the car itself and gas are much higher. Which makes sense if you think about it: if rent is high, all those businesses pay higher rent, higher wages, etc. If you never actually do anything and order everything from Amazon then sure, you can keep costs down. But what’s the point living in a world class city if you’re going to do that? HCOL people still have an edge, but it’s not as large as all that.
Something that many people don't understand is that if everyone's net worth in nominal dollars was multiplied by a factor of 10, it wouldn't change anything in a meaningful way. Wealth can only be identified as such on a relative basis, and if everyone's wealth was multiplied in this way, no one's wealth would actually change.

It a bit like that in HCOL areas. People are getting paid more, but they and the businesses that employ must in turn charge more for their goods and services. They don't call it a high cost of living area for nothing.

I still believe that the real advantage that a HCOL can potentially bring to the table is to allow an individual to build up significant wealth compared to those residing in LCOL areas and to subsequently retire to a lower COL area. If they remain in a HCOL area indefinitely, I don't see a major financial advantage in residing there compared to doing the same in a LCOL area.
With the exception of housing, in HCOL other costs do not scale linearly with income. So even by staying in a HCOL you can build up more relative and absolute wealth as compared to LCOLers.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by willthrill81 » Thu Jul 25, 2019 11:44 am

HEDGEFUNDIE wrote:
Thu Jul 25, 2019 11:40 am
willthrill81 wrote:
Thu Jul 25, 2019 11:33 am
KyleAAA wrote:
Thu Jul 25, 2019 10:19 am
thepicard1 wrote:
Thu Jul 25, 2019 12:56 am
Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.

My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.

In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).
That was not my experience moving from MCOL to HCOL. Everything was significantly more expensive, not just housing. I pay 20% more for much lower quality food now, for example. If I wanted to eat out at comparable restaurants to what I was accustomed, that would go up by 50%. Likewise with car expenses, since taxes on both the car itself and gas are much higher. Which makes sense if you think about it: if rent is high, all those businesses pay higher rent, higher wages, etc. If you never actually do anything and order everything from Amazon then sure, you can keep costs down. But what’s the point living in a world class city if you’re going to do that? HCOL people still have an edge, but it’s not as large as all that.
Something that many people don't understand is that if everyone's net worth in nominal dollars was multiplied by a factor of 10, it wouldn't change anything in a meaningful way. Wealth can only be identified as such on a relative basis, and if everyone's wealth was multiplied in this way, no one's wealth would actually change.

It a bit like that in HCOL areas. People are getting paid more, but they and the businesses that employ must in turn charge more for their goods and services. They don't call it a high cost of living area for nothing.

I still believe that the real advantage that a HCOL can potentially bring to the table is to allow an individual to build up significant wealth compared to those residing in LCOL areas and to subsequently retire to a lower COL area. If they remain in a HCOL area indefinitely, I don't see a major financial advantage in residing there compared to doing the same in a LCOL area.
With the exception of housing, in HCOL other costs do not scale linearly with income. So even by staying in a HCOL you can build up more relative and absolute wealth as compared to LCOLers.
Yes, which is why I said "a bit like that." That being said, not everyone who lives in a HCOL has the potential to build up more relative or even absolute wealth than LCOL dwellers. That's why I think that the premise of this thread is flawed; whether it's true or not is very individualistic. It's reminiscent of when people discuss "average investors" even though no one actually is one.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by PeterParker » Thu Jul 25, 2019 11:46 am

I agree with you. Everything is more expensive in HCOL area, not just housing.
willthrill81 wrote:
Thu Jul 25, 2019 11:33 am
Something that many people don't understand is that if everyone's net worth in nominal dollars was multiplied by a factor of 10, it wouldn't change anything in a meaningful way. Wealth can only be identified as such on a relative basis, and if everyone's wealth was multiplied in this way, no one's wealth would actually change.
This thinking precisely misses the point of geo-arbitrage entirely. Inefficient or "weird" markets.

GENERALLY, most regular expenses --- food, housing, transportation -- are highly correlated to location at a high level --- that is because at the country level, there are literally different currencies.

The US is a great example of where that's not true, state to state. We all use the US dollar.

Car prices will not be 300% higher in SFO like housing is 300% higher vs. rural Wyoming. That's because you could potentially buy a car out of state/ the shipping costs aren't that high/ there are no inter-state tariffs.

There's no need to go through line by line, and reverse-engineer the thousands of market forces that exist within every city within every industry. There are already numerous websites that compare the "Cost of Living" of various cities on most key factors (housing, retail, food) -- but within these you can exploit substrategies and loopholes, and the result is clear:

Things do not all rise together. Markets are inefficient and strange. Hell, in ANY city you can order the same crap off of alibaba dot com.

That's the concept of arbitrage. Exploiting inefficiencies.

With Geo-arbitrage, you are mostly doing that on the income/ revenue side.

With the cost side, it's very unlikely all your costs will necessarily rise in lockstep. But even if they did, if you're still spending 50% of your income and saving 50% of your income, you will still come out ahead in a HCOL area.
Last edited by PeterParker on Thu Jul 25, 2019 11:48 am, edited 2 times in total.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by willthrill81 » Thu Jul 25, 2019 11:47 am

PeterParker wrote:
Thu Jul 25, 2019 11:46 am
Things do not all rise together.
I never said otherwise. But many expenses, particularly the largest ones for most consumers, are greater in HCOL areas. Otherwise, the term 'HCOL' would be meaningless.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by EddyB » Thu Jul 25, 2019 12:42 pm

willthrill81 wrote:
Thu Jul 25, 2019 11:33 am
KyleAAA wrote:
Thu Jul 25, 2019 10:19 am
thepicard1 wrote:
Thu Jul 25, 2019 12:56 am
Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.

My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.

In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).
That was not my experience moving from MCOL to HCOL. Everything was significantly more expensive, not just housing. I pay 20% more for much lower quality food now, for example. If I wanted to eat out at comparable restaurants to what I was accustomed, that would go up by 50%. Likewise with car expenses, since taxes on both the car itself and gas are much higher. Which makes sense if you think about it: if rent is high, all those businesses pay higher rent, higher wages, etc. If you never actually do anything and order everything from Amazon then sure, you can keep costs down. But what’s the point living in a world class city if you’re going to do that? HCOL people still have an edge, but it’s not as large as all that.
Something that many people don't understand is that if everyone's net worth in nominal dollars was multiplied by a factor of 10, it wouldn't change anything in a meaningful way. Wealth can only be identified as such on a relative basis, and if everyone's wealth was multiplied in this way, no one's wealth would actually change.

It a bit like that in HCOL areas. People are getting paid more, but they and the businesses that employ must in turn charge more for their goods and services. They don't call it a high cost of living area for nothing.

I still believe that the real advantage that a HCOL can potentially bring to the table is to allow an individual to build up significant wealth compared to those residing in LCOL areas and to subsequently retire to a lower COL area. If they remain in a HCOL area indefinitely, I don't see a major financial advantage in residing there compared to doing the same in a LCOL area.
I'm no longer in VHCOL (maybe a moderately HCOL), but a quick estimate suggests that only about a third of my spending (in which I don’t count mortgage principal) seems to be on "local" costs, as opposed to things that are essentially priced nationally (e.g., car, things I order online or buy from big-box chains charging MSRP), or locally to another area (vacations).

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by retire2022 » Sat Jul 27, 2019 9:51 am

all this is regret story one should read regarding moving into to a LCOL

viewtopic.php?p=4662262#p4662262

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by stoptothink » Sat Jul 27, 2019 10:09 am

fareastwarriors wrote:
Thu Jul 25, 2019 10:58 am
KyleAAA wrote:
Thu Jul 25, 2019 10:19 am
thepicard1 wrote:
Thu Jul 25, 2019 12:56 am
Being in tech in the Bay Area, I would say definitely yes. However there is a large stratification in the Bay Area between the top paying tech companies and some of the middling ones.

My food, car, medical and other costs are roughly equivalent to what they would be in any other town in the U.S. Housing is exorbitant, yes but you can generally find a decent place anywhere in the Bay Area for $5k or less. Assuming that comes out to roughly $100k pre-tax, if you can clear this additional in salary every other dollar you make is gravy.

In my situation I believe I’m clearing this and then some compared with any other area in the U.S. (maybe the world).
That was not my experience moving from MCOL to HCOL. Everything was significantly more expensive, not just housing. I pay 20% more for much lower quality food now, for example. If I wanted to eat out at comparable restaurants to what I was accustomed, that would go up by 50%. Likewise with car expenses, since taxes on both the car itself and gas are much higher. Which makes sense if you think about it: if rent is high, all those businesses pay higher rent, higher wages, etc. If you never actually do anything and order everything from Amazon then sure, you can keep costs down. But what’s the point living in a world class city if you’re going to do that? HCOL people still have an edge, but it’s not as large as all that.


I agree with you. Almost everything is more expensive in HCOL area, not just housing. Then again, I'm not leaving.
It's a shock to the system every year when we take or 10+ day vacation to SoCal. Wife and I both grew up there, but it still never ceases to amaze us how much more expensive food, gas, and activities (movies, museums) are there then where we are now (Utah). In fact, in some of the areas where my family lives (ie. San Bernardino County), it seems to me that there is a bigger cost difference in food, gas, activities than there is in housing when compared to our area. We usually budget to spend about twice what we'd expect to at home and we're usually pretty close.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by willthrill81 » Sat Jul 27, 2019 10:39 am

retire2022 wrote:
Sat Jul 27, 2019 9:51 am
all this is regret story one should read regarding moving into to a LCOL

viewtopic.php?p=4662262#p4662262
IMHO, the biggest 'problem' the poster encountered was manifested 'fear of missing out' (i.e. 'had we hung on to our old home, it would have tripled in value over the last 15 years' with no regard to their old area being significantly more costly than their new one and the savings they experienced over those 15 years). No one should be counting on property appreciation wherever they live; that's speculation. It certainly happens, and it's nice when it does, but it's generally unpredictable and can swing significantly in both directions.
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by fennewaldaj » Mon Jul 29, 2019 12:26 am

For my field (pharmacy) pay is generally not much lower or sometimes actually higher in LCOL areas. So clearly for me LCOL area is better. My wife works as a developer at a tech startup. Surprisingly she is also better in our LCOL area because she would have never gotten the job in the first place in HCOL area. Basically she went to the local start up weekend and worked with the team that eventually founded the company where she now works. She actually has an MBA with only minor coding experience (SAS and SQL). She was highered by the start up as there office manager (setting up HR, accounting, benefits, ect). She eventually transitioned to the development side.

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Building wealth in LCOL vs HCOL?

Post by bigtex » Fri Oct 04, 2019 6:56 pm

[Thread merged into here, see below. --admin LadyGeek]

Is it easier, harder, or the same to build wealth in HCOL vs LCOL areas?

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Re: Building wealth in LCOL vs HCOL?

Post by muffins14 » Fri Oct 04, 2019 6:58 pm

This may be a relevant discussion:
viewtopic.php?t=285918

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Re: Building wealth in LCOL vs HCOL?

Post by EddyB » Fri Oct 04, 2019 7:30 pm

muffins14 wrote:
Fri Oct 04, 2019 6:58 pm
This may be a relevant discussion:
viewtopic.php?t=285918
Looks like it was started by the same OP.

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Re: Building wealth in LCOL vs HCOL?

Post by Pinotage » Fri Oct 04, 2019 7:36 pm

EddyB wrote:
Fri Oct 04, 2019 7:30 pm
muffins14 wrote:
Fri Oct 04, 2019 6:58 pm
This may be a relevant discussion:
viewtopic.php?t=285918
Looks like it was started by the same OP.
Wow, that's weird.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by LadyGeek » Fri Oct 04, 2019 7:50 pm

bigtex - I merged your updated thread back into the original.
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by AerialWombat » Fri Oct 04, 2019 8:32 pm

I admittedly didn’t read the entire thread, but what I saw missing — aside from remote workers — is a discussion about being high income in a low cost area. I personally think that’s the fastest path to wealth.

I started my software company in Seattle in 2015, and got the heck outta dodge in early 2018. I am now back in the MCOL area I used to live in a decade ago, but am soon moving back to the VLCOL hole in the ground I was raised in as a kid.

My goal is to cut my $34,000 a year baseline lifestyle in half, while maintaining a mid-six figure income.

I realize that many people want the amenities of city life, but if the hustle and bustle ain’t your thing, then leave. Especially if your business or job is portable. As already discussed, most jobs don’t pay significantly better in a HCOL vs LCOL. A 20% pay bump ain’t worth 2x the COL, in my mind.
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by bling » Fri Oct 04, 2019 8:53 pm

throughout my life, i've always followed the money and moved to where the opportunities were. this meant moving to HCOL areas for a higher compensation. every single time, after adjusting for costs, in absolute terms i was able to save more.

if you're not picky about living arrangements you can really amplify your savings rate. heck, there was a story about a google engineer a while back who was living out of a truck and saving 90% of his income.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by HomerJ » Fri Oct 04, 2019 9:06 pm

bling wrote:
Fri Oct 04, 2019 8:53 pm
if you're not picky about living arrangements you can really amplify your savings rate. heck, there was a story about a google engineer a while back who was living out of a truck and saving 90% of his income.
This is absolutely true, if you're not picky about living arrangements.

If you DO care about living arrangements, you can still make more money in a HCOL area than a LCOL area only IF, (and, seriously, note the if), your home value appreciates at a high rate.

Because if you DO care about living arrangements, a LCOL area with a solid salary will give you the best of both worlds, a nice house, and wealth building potential. Even if you only break even on the house.

In a HCOL area, a high salary will be eaten up by housing costs if you have a nice house... but that's okay as long as the house continues to appreciate... you can make your wealth there.

Or you can live in a crappy apartment or your truck and make your wealth there...

But you likely won't get wealthy in a HCOL area if you have nice living arrangements, and housing falls or remains stagnant. It's not 100% up to you; there's an element of luck there...

That's why I prefer LCOL area...

(Now before other people jump in with their individual stories, yes if you make 5x my salary, you'll still get wealthy even with a nice house in a HCOL area... but if you make 2x my salary, but housing costs 4x as much, you're a lot more dependent on housing continuing to go up)
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by tk1978 » Fri Oct 04, 2019 10:55 pm

Setting aside the fact that certain jobs/professions simply don’t exist in LCOL areas (and in many cases such jobs/professions allow you to build wealth magnitudes larger than would be possible in LCOL areas), one thing I rarely see mentioned in these discussions are the non-financial aspects of these types of decisions. Not to get political, but I want to be surrounded by like-minded people of diverse backgrounds which is something that I am much more likely to have in a HCOL, and probably even more so VHCOL, area. To each his own.

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Re: Building wealth in LCOL vs HCOL?

Post by EddyB » Fri Oct 04, 2019 11:12 pm

Pinotage wrote:
Fri Oct 04, 2019 7:36 pm
EddyB wrote:
Fri Oct 04, 2019 7:30 pm
muffins14 wrote:
Fri Oct 04, 2019 6:58 pm
This may be a relevant discussion:
viewtopic.php?t=285918
Looks like it was started by the same OP.
Wow, that's weird.
Maybe it would help if bigtex explained what she or he still hoped to learn after the first stab at this.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by willthrill81 » Fri Oct 04, 2019 11:29 pm

AerialWombat wrote:
Fri Oct 04, 2019 8:32 pm
I admittedly didn’t read the entire thread, but what I saw missing — aside from remote workers — is a discussion about being high income in a low cost area. I personally think that’s the fastest path to wealth.
You might be right, although this subject is highly contextual and individualistic.

I've known several people who did just what you refer to and got very wealthy (i.e. deca-millionaires). If you earn $300k gross in a LCOL area vs. $500k in a HCOL area, it's almost a slam dunk that the LCOL area will result in greater wealth building potential.

Also, those with careers that are largely independent of one's location (i.e. remote work) or whose pay is not closely tied to the COL of the area (i.e. those who get paid close to the same no matter where they live) are almost certainly better off in LCOL areas.
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by KlangFool » Fri Oct 04, 2019 11:35 pm

AerialWombat wrote:
Fri Oct 04, 2019 8:32 pm
I admittedly didn’t read the entire thread, but what I saw missing — aside from remote workers — is a discussion about being high income in a low cost area. I personally think that’s the fastest path to wealth.
AerialWombat,

I disagreed. The fastest path to wealth is high income with zero living expenses. Aka, being an ex-pat where all the living expenses and sometimes income taxes are paid by the employer. In those cases, it won't matter where you live.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by CMD1 » Fri Oct 04, 2019 11:46 pm

It often doesn't feel like it, but I think you can get further ahead in a VHCOL area. This assumes you save of course. On top of having additional income hopefully, I think for many the opportunities are just greater so you grow into greater jobs a lot easier because opportunities are more plentiful. If you stay long term and buy a house, you have the strong history of appreciation that many VHCOL markets have as well. I made the move to a VHCOL due to personal reasons when the numbers didn't make sense (didn't get enough of a raise to cover the cost of living increase) BUT the growth and pay growth in the 3+ years since then has made up for that.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by AerialWombat » Sat Oct 05, 2019 2:17 am

KlangFool wrote:
Fri Oct 04, 2019 11:35 pm
I disagreed. The fastest path to wealth is high income with zero living expenses. Aka, being an ex-pat where all the living expenses and sometimes income taxes are paid by the employer. In those cases, it won't matter where you live.
That’s definitely one way to get ahead! Good gig if you can get it. :P

In my case, I am the employer, so that doesn’t quite work as easily. :)
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by international001 » Sat Oct 05, 2019 5:32 am

CMD1 wrote:
Fri Oct 04, 2019 11:46 pm
It often doesn't feel like it, but I think you can get further ahead in a VHCOL area. This assumes you save of course. On top of having additional income hopefully, I think for many the opportunities are just greater so you grow into greater jobs a lot easier because opportunities are more plentiful. If you stay long term and buy a house, you have the strong history of appreciation that many VHCOL markets have as well. I made the move to a VHCOL due to personal reasons when the numbers didn't make sense (didn't get enough of a raise to cover the cost of living increase) BUT the growth and pay growth in the 3+ years since then has made up for that.
Thanks for showing that at the end everything comes down to the right numbers.

Everything comes down on how much is the salary plus in the HCOL. Is it usually a percentage increase or an amount on top (respect the salary on the LCOL)? If the former, then it's a question of what is your salary range. How much would the break-even point be be? $30k if you are single (to cover extra rental)?

Also, I think you can move to a HCOL area and loose saving power, but with expectations that situation may change because of better conditions (gamlbe-like)

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by bigtex » Sat Oct 05, 2019 5:42 am

If you look at median household income and cost of living index in an HCOl vs LCOL it doesn’t seem you are better off in either place. Same ability to build same amount of wealth in both places because increased income essentially matches increased cost of living. For example, Seattle MSA median household income is $87k vs Omaha MSA of $59k. Seattle area has 47.5% higher median household income than Omaha area. However, the cost of living index for Seattle vs Omaha is 47.9% more expensive in Seattle vs Omaha. See link https://www.bestplaces.net/cost-of-livi ... a-ne/50000. Therefore, for normal non bogleheads people making the median incomes in these areas, isn’t it safe to say the wealth building ability is the same in both places. Because the median Seattle resident doesn’t work at Microsoft with a $350k income according to the data.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by international001 » Sat Oct 05, 2019 5:48 am

bling wrote:
Fri Oct 04, 2019 8:53 pm
throughout my life, i've always followed the money and moved to where the opportunities were. this meant moving to HCOL areas for a higher compensation. every single time, after adjusting for costs, in absolute terms i was able to save more.

if you're not picky about living arrangements you can really amplify your savings rate. heck, there was a story about a google engineer a while back who was living out of a truck and saving 90% of his income.
Only one?

https://www.cnbc.com/2015/10/21/googler ... o-sex.html
This anonymous person, who sounds as though he has an obnoxious competitive streak, says that living in cars is cheating (Google buildings only, people!) and that he lived at Google for about 14 months.
My heroes

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by ClevrChico » Sat Oct 05, 2019 7:28 am

I'm only familiar with tech, and that is absolutely true for FAANG and startup companies which are in HCOL areas. https://www.levels.fyi/ confirms this. The generous stock grants, bonuses, and promotional opportunities are incredible. There are several posts on here with young single digit millionaires that followed this path.

Outside of FAANG, I think it becomes more of a wash in tech.

Personally, I work in a niche tech field in a LCOL area, non-FAANG. I'm paid more than similar jobs in NYC, which surprised me, but supply and demand I guess.

Quality of life is very high in LCOL. My working commutes have always been very short, public schools are great, cheap childcare, cheap housing (no need for roommates), and great outdoor activities. Wealth building is more of a long game here. :sharebeer

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by bling » Sat Oct 05, 2019 8:26 am

willthrill81 wrote:
Fri Oct 04, 2019 11:29 pm
I've known several people who did just what you refer to and got very wealthy (i.e. deca-millionaires). If you earn $300k gross in a LCOL area vs. $500k in a HCOL area, it's almost a slam dunk that the LCOL area will result in greater wealth building potential.
300k in Texas after taxes = 210k
500k in CA after taxes = 288k

i purposely picked a no state tax vs state tax to exaggerate the advantage. that's still a difference of 78k! is the HCOL area really 6.5k more expensive every month?

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by stoptothink » Sat Oct 05, 2019 9:11 am

tk1978 wrote:
Fri Oct 04, 2019 10:55 pm
Setting aside the fact that certain jobs/professions simply don’t exist in LCOL areas (and in many cases such jobs/professions allow you to build wealth magnitudes larger than would be possible in LCOL areas), one thing I rarely see mentioned in these discussions are the non-financial aspects of these types of decisions. Not to get political, but I want to be surrounded by like-minded people of diverse backgrounds which is something that I am much more likely to have in a HCOL, and probably even more so VHCOL, area. To each his own.
You probably don't see it mentioned because it has absolutely nothing to do with "Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?"

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by stoptothink » Sat Oct 05, 2019 9:18 am

willthrill81 wrote:
Fri Oct 04, 2019 11:29 pm
AerialWombat wrote:
Fri Oct 04, 2019 8:32 pm
I admittedly didn’t read the entire thread, but what I saw missing — aside from remote workers — is a discussion about being high income in a low cost area. I personally think that’s the fastest path to wealth.
You might be right, although this subject is highly contextual and individualistic.

I've known several people who did just what you refer to and got very wealthy (i.e. deca-millionaires). If you earn $300k gross in a LCOL area vs. $500k in a HCOL area, it's almost a slam dunk that the LCOL area will result in greater wealth building potential.

Also, those with careers that are largely independent of one's location (i.e. remote work) or whose pay is not closely tied to the COL of the area (i.e. those who get paid close to the same no matter where they live) are almost certainly better off in LCOL areas.
I work in a niche industry where I am a known researcher; 4 of the 5 largest companies in the industry (globally) have their headquarters in my MCOL metro area. Would I have a higher net worth building potential if I moved to a HCOL area?

If you are in tech or finance: yes. If you are a physician: probably not. If you are small business owner: who knows? I grew up in VHCOL area, have lived in LCOL areas, and have found my greatest opportunities in my current MCOL area. There is no way of answering this question.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by Sandtrap » Sat Oct 05, 2019 9:25 am

Concerning: "Wealth Building Potential".

Of course, there are many exceptions.
Of course, (relative) wealth can be made anywhere, expecially when many businesses are not location dependent.
Of course. . . . . . (etc, etc) as evidenced by "Millionaire Next Door".

But. . . . . the advantage of an UHCOL and HCOL area to generate large and consistent sums of money/income/assets through profession/occupation (higher wage scales), entrepreneurship (greater opportunities), and self-business enterprises, are tremendous.
The old saying, "there's money in the air", is true.
And, in business (not necessarily in other areas), the adage, "go where the money is", holds true.

Of course, especially in modern evolved economic dynamics, there are many many exceptions.

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by willthrill81 » Sat Oct 05, 2019 10:19 am

bling wrote:
Sat Oct 05, 2019 8:26 am
willthrill81 wrote:
Fri Oct 04, 2019 11:29 pm
I've known several people who did just what you refer to and got very wealthy (i.e. deca-millionaires). If you earn $300k gross in a LCOL area vs. $500k in a HCOL area, it's almost a slam dunk that the LCOL area will result in greater wealth building potential.
300k in Texas after taxes = 210k
500k in CA after taxes = 288k

i purposely picked a no state tax vs state tax to exaggerate the advantage. that's still a difference of 78k! is the HCOL area really 6.5k more expensive every month?
It could be.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by EddyB » Sat Oct 05, 2019 10:36 am

willthrill81 wrote:
Sat Oct 05, 2019 10:19 am
bling wrote:
Sat Oct 05, 2019 8:26 am
willthrill81 wrote:
Fri Oct 04, 2019 11:29 pm
I've known several people who did just what you refer to and got very wealthy (i.e. deca-millionaires). If you earn $300k gross in a LCOL area vs. $500k in a HCOL area, it's almost a slam dunk that the LCOL area will result in greater wealth building potential.
300k in Texas after taxes = 210k
500k in CA after taxes = 288k

i purposely picked a no state tax vs state tax to exaggerate the advantage. that's still a difference of 78k! is the HCOL area really 6.5k more expensive every month?
It could be.
I guess anything’s possible, but I really doubt it, unless characterizing mortgage principal reduction is only an “expense.”

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by willthrill81 » Sat Oct 05, 2019 11:26 am

EddyB wrote:
Sat Oct 05, 2019 10:36 am
willthrill81 wrote:
Sat Oct 05, 2019 10:19 am
bling wrote:
Sat Oct 05, 2019 8:26 am
willthrill81 wrote:
Fri Oct 04, 2019 11:29 pm
I've known several people who did just what you refer to and got very wealthy (i.e. deca-millionaires). If you earn $300k gross in a LCOL area vs. $500k in a HCOL area, it's almost a slam dunk that the LCOL area will result in greater wealth building potential.
300k in Texas after taxes = 210k
500k in CA after taxes = 288k

i purposely picked a no state tax vs state tax to exaggerate the advantage. that's still a difference of 78k! is the HCOL area really 6.5k more expensive every month?
It could be.
I guess anything’s possible, but I really doubt it, unless characterizing mortgage principal reduction is only an “expense.”
The rent for a 2 bedroom in northeast San Francisco is $5,000, compared to $1,400 in Dallas. That's over half of the difference alone.

But again, this is highly contextual, and generalizable statements are difficult to make because there are too many 'exceptions' to count.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by goodenyou » Sat Oct 05, 2019 11:51 am

willthrill81 wrote:
Sat Oct 05, 2019 11:26 am
EddyB wrote:
Sat Oct 05, 2019 10:36 am
willthrill81 wrote:
Sat Oct 05, 2019 10:19 am
bling wrote:
Sat Oct 05, 2019 8:26 am
willthrill81 wrote:
Fri Oct 04, 2019 11:29 pm
I've known several people who did just what you refer to and got very wealthy (i.e. deca-millionaires). If you earn $300k gross in a LCOL area vs. $500k in a HCOL area, it's almost a slam dunk that the LCOL area will result in greater wealth building potential.
300k in Texas after taxes = 210k
500k in CA after taxes = 288k

i purposely picked a no state tax vs state tax to exaggerate the advantage. that's still a difference of 78k! is the HCOL area really 6.5k more expensive every month?
It could be.
I guess anything’s possible, but I really doubt it, unless characterizing mortgage principal reduction is only an “expense.”
The rent for a 2 bedroom in northeast San Francisco is $5,000, compared to $1,400 in Dallas. That's over half of the difference alone.

But again, this is highly contextual, and generalizable statements are difficult to make because there are too many 'exceptions' to count.
The cost of living and the cost of lifestyle are different metrics. To live in San Francisco and have many of the similar lifestyle choices ( home size, gardeners, maids, daycare, country clubs etc..) would be extraordinarily expensive in San Francisco. But it’s San Francisco and not Dallas. Some find just living in HCOL cities to have a premium built into it. I chose to live in a VLCOL area in Texas with the sole purpose of getting to FI 15 years earlier, live in a big house with a ton of services that were very cheap. I travel a lot and stay in nice hotel all over the world. It’s a choice. Different strokes for different folks.
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Re: Do people in HCOL areas have a higher net worth and more wealth building potential than LCOL?

Post by bling » Sat Oct 05, 2019 11:55 am

willthrill81 wrote:
Sat Oct 05, 2019 11:26 am
EddyB wrote:
Sat Oct 05, 2019 10:36 am
willthrill81 wrote:
Sat Oct 05, 2019 10:19 am
bling wrote:
Sat Oct 05, 2019 8:26 am
willthrill81 wrote:
Fri Oct 04, 2019 11:29 pm
I've known several people who did just what you refer to and got very wealthy (i.e. deca-millionaires). If you earn $300k gross in a LCOL area vs. $500k in a HCOL area, it's almost a slam dunk that the LCOL area will result in greater wealth building potential.
300k in Texas after taxes = 210k
500k in CA after taxes = 288k

i purposely picked a no state tax vs state tax to exaggerate the advantage. that's still a difference of 78k! is the HCOL area really 6.5k more expensive every month?
It could be.
I guess anything’s possible, but I really doubt it, unless characterizing mortgage principal reduction is only an “expense.”
The rent for a 2 bedroom in northeast San Francisco is $5,000, compared to $1,400 in Dallas. That's over half of the difference alone.

But again, this is highly contextual, and generalizable statements are difficult to make because there are too many 'exceptions' to count.
so, 210k/12 = 17.k per month, vs 288k/12 = 24k per month.

17k - 1.4k = 15.6k remaining
24k - 5k = 19k remaining

you are still 3.4k better off every month.

if you're single and/or have no intention of having kids, it's not even remotely close. HCOL > LCOL in the vast majority of cases.

also, something to consider is that if you're making a high compensation in a HCOL area, it's a foregone conclusion that you are also maxing out your 401k, backdoor roth, HSA, and every other tax advantaged vehicle available to you.

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