4 ms·

The proof is in the pudding. My savings are growing at an astronomically higher rate than it was in the Midwest. I used to tell myself the same thing before I m

The proof is in the pudding. My savings are growing at an astronomically higher rate than it was in the Midwest. I used to tell myself the same thing before I moved.

cookiecaper 10y ago
It really depends on the individual situation. The biggest cost variance is in housing. In the Midwest, you can get a 2,500 sq ft home for ~1.3k +/- $350. [0] Under normal leasing standards (no more than 1/3rd your income to rent), you can pay that if you have a job in the $50k-$60k range. And that's almost the standard -- big houses and big yards for everyone. In LA or SEA, you're looking at 2.5x-4x that, which is at least $3500/mo. [1] Under normal leasing income standards, you'd have to have a salary of $140k+ to barely meet the minimum requirements, and that's for a "cheap" rental home. The other option is to live way out in the burbs, where prices are probably closer to 1.5x-2.5x, and spend 2.5 hours commuting every work day. (In SF or NYC, you probably can't obtain a comparable living situation, but a 2500 sq ft apartment apparently runs around $15k/mo, meaning you'd have to make almost $1M/yr to barely afford one) If you're a single person or just have a partner, you can probably take a hit and go from a $800/mo 2-bedroom apartment @ $55k to a downsized $1600/mo apartment @ $110k and still make a lot more money than you did in the place with a lower CoL (even after calculating a 30-50% increase in the cost of some goods, like utilities, gas, and food). However, if you have kids, this quickly becomes impractical, because it's way harder to jump from a $1300/mo home @ 60k to a $3500/mo home @ 115k. For extra credit calculate the change to net pay based on differing tax laws. This is especially large if you're coming to CA, which has the highest state income tax in the nation at 13.3%. Most Midwestern states have tax rates between 4 and 7 percent. Some of the most populous "flyover" states (Texas and Florida) have a 0% tax rate (and to Amazon's credit, WA does too). [2] [0] http://archive.is/OKMTb http://archive.is/OKMTb [1] http://archive.is/8R5aI http://archive.is/8R5aI [2] http://taxfoundation.org/sites/taxfoundation.org/files/docs/PIT-01.png http://taxfoundation.org/sites/taxfoundation.org/files/docs/...
- coredog64 10y ago
  > The other option is to live way out in the burbs, where prices are probably closer to 1.5x-2.5x, and spend 2.5 hours commuting every work day. I think I've mentioned this before, but when I interviewed at Amazon, the topic of affordable housing came up. I asked the interviewer what was affordable these days, expecting Kent, Auburn, or maybe even Buckley. His answer was Puyallup.
  - envyUser 10y ago
    Same in SF, you can always live in Concord or Richmond! San Leandro is a steal as well. Dallas is the best of both worlds, high salary and low cost of living. I'm not a fan of Dallas but I may end up there again.
  - voltagex_ 10y ago
    I'm on the other side of the world so I have no idea how realistic this is, but Google Maps says it's around 1 hour 15 by bus each way from Puyallup to Amazon's office at 440 Terry Ave N, Seattle. That's not too bad.
- deleted 10y ago
  [deleted]
- 1anh2kqowg 10y ago
  >(In SF or NYC, you probably can't obtain a comparable living situation, but a 2500 sq ft apartment apparently runs around $15k/mo, meaning you'd have to make almost $1M/yr to barely afford one) I'm not sure where you are getting this from. The mcmansion trend hit the bay area just as much as it hit anywhere else. The burbs are 20-30 minutes away with tech worker job hours. The 2500 sqft homes here cost a million dollars, so your mortgage cancels out the additional bay area income. But that mortgage money doesn't go into a black hole, it's equity. So at the end of the day you can sell your bay area house, go back to oklahoma, and buy ten houses. This is probably the best opportunity going in the world right now to build dynastic wealth.
  - cookiecaper 10y ago
    >I'm not sure where you are getting this from. The mcmansion trend hit the bay area just as much as it hit anywhere else. The burbs are 20-30 minutes away with tech worker job hours. Searching for rentals within the actual city limits. Burbs are fine but already addressed; generally you are looking at 1 hour+ commutes before it starts to get into "affordable" range (looking at 1.5x-2.5x the median cost for comparable housing in other metros). In LA and SEA, it seems it's possible to find housing that's closer than 1 hours' commute for 2.5x-4.5x the national median. In NYC and SF, it doesn't appear that way -- these areas are so dense that it's not possible to get a 2500 sq ft home within 1 hours' commute (meaning freestanding homes that have a yard, not condos/apartments; such homes actually appear to be so rare within city limits that you'd have difficulty getting them no matter how much money you were willing to spend). That's why I singled them out. I'm talking about a rush hour commute here, the need to get to work to do a 9-5. For example, I know Daly City is only a few miles from SF proper, but that doesn't mean you can get doorstep-to-doorstep in under an hour given the transit conditions. I've never lived in either SF or NYC so it's completely possible that I'm making an incorrect extrapolation here. >The 2500 sqft homes here cost a million dollars, so your mortgage cancels out the additional bay area income. But that mortgage money doesn't go into a black hole, it's equity. So at the end of the day you can sell your bay area house, go back to oklahoma, and buy ten houses. This is probably the best opportunity going in the world right now to build dynastic wealth. This is a good idea if you can get the timing right.

The proof is in the pudding. My savings are growing at an astronomically higher rate than it was in the Midwest. I used to tell myself the same thing before I moved.

cookiecaper 10y ago

It really depends on the individual situation. The biggest cost variance is in housing. In the Midwest, you can get a 2,500 sq ft home for ~1.3k +/- $350. [0] Under normal leasing standards (no more than 1/3rd your income to rent), you can pay that if you have a job in the $50k-$60k range. And that's almost the standard -- big houses and big yards for everyone. In LA or SEA, you're looking at 2.5x-4x that, which is at least $3500/mo. [1] Under normal leasing income standards, you'd have to have a salary of $140k+ to barely meet the minimum requirements, and that's for a "cheap" rental home. The other option is to live way out in the burbs, where prices are probably closer to 1.5x-2.5x, and spend 2.5 hours commuting every work day. (In SF or NYC, you probably can't obtain a comparable living situation, but a 2500 sq ft apartment apparently runs around $15k/mo, meaning you'd have to make almost $1M/yr to barely afford one) If you're a single person or just have a partner, you can probably take a hit and go from a $800/mo 2-bedroom apartment @ $55k to a downsized $1600/mo apartment @ $110k and still make a lot more money than you did in the place with a lower CoL (even after calculating a 30-50% increase in the cost of some goods, like utilities, gas, and food). However, if you have kids, this quickly becomes impractical, because it's way harder to jump from a $1300/mo home @ 60k to a $3500/mo home @ 115k. For extra credit calculate the change to net pay based on differing tax laws. This is especially large if you're coming to CA, which has the highest state income tax in the nation at 13.3%. Most Midwestern states have tax rates between 4 and 7 percent. Some of the most populous "flyover" states (Texas and Florida) have a 0% tax rate (and to Amazon's credit, WA does too). [2] [0] http://archive.is/OKMTb http://archive.is/OKMTb [1] http://archive.is/8R5aI http://archive.is/8R5aI [2] http://taxfoundation.org/sites/taxfoundation.org/files/docs/PIT-01.png http://taxfoundation.org/sites/taxfoundation.org/files/docs/...

coredog64 10y ago
> The other option is to live way out in the burbs, where prices are probably closer to 1.5x-2.5x, and spend 2.5 hours commuting every work day. I think I've mentioned this before, but when I interviewed at Amazon, the topic of affordable housing came up. I asked the interviewer what was affordable these days, expecting Kent, Auburn, or maybe even Buckley. His answer was Puyallup.
- envyUser 10y ago
  Same in SF, you can always live in Concord or Richmond! San Leandro is a steal as well. Dallas is the best of both worlds, high salary and low cost of living. I'm not a fan of Dallas but I may end up there again.
- voltagex_ 10y ago
  I'm on the other side of the world so I have no idea how realistic this is, but Google Maps says it's around 1 hour 15 by bus each way from Puyallup to Amazon's office at 440 Terry Ave N, Seattle. That's not too bad.
deleted 10y ago
[deleted]
1anh2kqowg 10y ago
>(In SF or NYC, you probably can't obtain a comparable living situation, but a 2500 sq ft apartment apparently runs around $15k/mo, meaning you'd have to make almost $1M/yr to barely afford one) I'm not sure where you are getting this from. The mcmansion trend hit the bay area just as much as it hit anywhere else. The burbs are 20-30 minutes away with tech worker job hours. The 2500 sqft homes here cost a million dollars, so your mortgage cancels out the additional bay area income. But that mortgage money doesn't go into a black hole, it's equity. So at the end of the day you can sell your bay area house, go back to oklahoma, and buy ten houses. This is probably the best opportunity going in the world right now to build dynastic wealth.
- cookiecaper 10y ago
  >I'm not sure where you are getting this from. The mcmansion trend hit the bay area just as much as it hit anywhere else. The burbs are 20-30 minutes away with tech worker job hours. Searching for rentals within the actual city limits. Burbs are fine but already addressed; generally you are looking at 1 hour+ commutes before it starts to get into "affordable" range (looking at 1.5x-2.5x the median cost for comparable housing in other metros). In LA and SEA, it seems it's possible to find housing that's closer than 1 hours' commute for 2.5x-4.5x the national median. In NYC and SF, it doesn't appear that way -- these areas are so dense that it's not possible to get a 2500 sq ft home within 1 hours' commute (meaning freestanding homes that have a yard, not condos/apartments; such homes actually appear to be so rare within city limits that you'd have difficulty getting them no matter how much money you were willing to spend). That's why I singled them out. I'm talking about a rush hour commute here, the need to get to work to do a 9-5. For example, I know Daly City is only a few miles from SF proper, but that doesn't mean you can get doorstep-to-doorstep in under an hour given the transit conditions. I've never lived in either SF or NYC so it's completely possible that I'm making an incorrect extrapolation here. >The 2500 sqft homes here cost a million dollars, so your mortgage cancels out the additional bay area income. But that mortgage money doesn't go into a black hole, it's equity. So at the end of the day you can sell your bay area house, go back to oklahoma, and buy ten houses. This is probably the best opportunity going in the world right now to build dynastic wealth. This is a good idea if you can get the timing right.