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If you earn 3 times as much, but wind up spending 3 times as much, you are still saving 3 times as much. It's almost always better to get high pay in a high Co
by yen223 8y ago
If you earn 3 times as much, but wind up spending 3 times as much, you are still saving 3 times as much.
It's almost always better to get high pay in a high CoL area, than to get low pay in a low CoL area.
- iLemming 8y agoWorking from paycheck to paycheck you don't earn 3 times as much and you don't save. Most of my friends who live here can't afford to buy a house, they rent. Almost all my friends who left SF Bay were able to buy within months. Cost of living and the housing prices in SF Bay are extremely disproportionate to salaries.
- deleted 8y ago[deleted]
- epanchin 8y agoIf they could buy within months, does that not imply there were in fact saving? Just their savings seemed small until moving?
- zdgsg 8y agoAlmost but not quite - at high ends of salary the marginal tax rate is 38%, so $50k->$100k doesn't necessarily make you richer, it just makes Uncle Sam happier.
- sincerely 8y agoWell, if your workload would be the same either way, you'd want to be in a world where there are more tax dollars than less :)
- closeparen 8y agoNot really - the same tax dollars buy less service and infrastructure when the workers and suppliers also need to function in high CoL areas. A $2.5bn mile of subway in New York isn't a priori better than a $600bn mile of subway in Seattle. A $59k entry level teacher in San Francisco isn't a priori better than a $33k entry level teacher in Wisconsin.
- allendoerfer 8y agoA mile of subway in New York serves more people. But I get the notion.
- seanmcdirmid 8y ago$600bn for a mile of subway in Seattle is absolutely nuts, I hoe that is a typo.
- closeparen 8y agoMillion, sorry.
- hyperbovine 8y agoBy my calculation it makes you 62 cents richer for every dollar you earn.
- EADGBE 8y agoExactly. Parent is exaggerating. Also, highest tax bracket is 37% (2018). Yeah, I'm arguing about 1%, but that's also for individuals making over 500k, or couples making over 600k. 50k to 100k income raise bumps you up 2% in tax rate from 22% to 24% (assuming individual). If parent was talking about raise on top of what they have, then the worse affected rate of change would be the 24% rate ($82,501 to $157,500) to 32% rate ($157,501 to $200,000). These numbers are similar, but less affected with MFJ.
- closeparen 8y agoA number on a bank statement is the map, not the territory. Money's value is what it can be exchanged for. Saving 3 times as much is merely keeping up.
- pure-awesome 8y agoI think the implication in the comment above yours is that you can save up at 3 times the rate, and then move to somewhere it is cheaper to live with your extra savings.
- closeparen 8y agoIf you can build a satisfying life and career somewhere cheap, why wouldn't you just do that from the beginning? Is it really worth it to take a crap standard of living in SF over several years for, what, $5000/year in investment income?
- seanmcdirmid 8y agoParent is obviously not saving much if they have to spend 50% net on rent, $6k/month is only $72k a year, which is really tough even in a lower cost place like Seattle or Austin.
- sethammons 8y agoNet vs gross
- seanmcdirmid 8y agoRight sorry. That is still only $95k or so if you are paying Californian + federal taxes and pay toll taxes.