I do think it’s harder for younger people in some respects these days, particularly when it comes to buying a house because both prices and interest rates have gone up so much so fast. However, living in a VHCOL area could still be advantageous for some people. They do need to find a solution to the housing piece that works for them, though.OrangeKiwi wrote: ↑Tue Feb 06, 2024 1:06 pmDo you think your course of action would work out as well starting today in your location? I am not familiar with the specifics in the changes in teacher compensation, but I would be very surprised if a younger Ron Ronnerson would be able to accomplish what you did if they were to buy an equivalent to your house at market price today, or any other VHCOL. All the other expenses would pale in comparison to the land/rent cost, so keeping them at bay would be functionally meaningless.Ron Ronnerson wrote: ↑Mon Feb 05, 2024 9:18 pm
On a side note, I think a much bigger factor than inflation that has helped us is geo-arbitrage, but not in the way most people tend to think. They pay me $140k to teach elementary school in the Bay Area and I’m expecting a six-figure pension as well. This is considerably more than what teachers make in most other areas. By keeping expenses at bay (which is often possible in VHCOL areas by making certain deliberate consumption choices), we can pocket much of the higher income. In any case, it has worked out fairly well for us so far.
I’ll provide an example of a friend I have. He’s been teaching for about a decade and has a salary of roughly $125k. He’s married to someone who just recently became a nurse. Her salary is similar to his and they will both be receiving raises in the future. They rent in a nice apartment complex for $2300/month and don’t want to have any children. So, after accounting for their housing expense, they’ve still got $200k to cover their expenses (including taxes).
Now we're at the the part where the geo-arbitrage comes in. Their other expenses aren't all that much higher than in lower cost of living areas. For example, my friend drives a 2005 Honda Accord, goes on inexpensive vacations, doesn't go to fancy restaurants, etc. He has quite a bit left to direct toward savings after paying for rent if he so decides. The lifestyle my friend has chosen may not be for everyone but it does work fine for him.