5 ms·

People who understand the lower salary is easily made up for by lower living costs.

by ndnxhs 8y ago

jkaplowitz 8y ago
That's partly true and partly not. In particular, if one anticipates returning to a pricey location later in life (e.g. needing to take care of elderly relatives there), one has to save for retirement at a higher level than if one can stay in the cheaper place forever. Cost of living comparisons used to justify salary reductions rarely account for such scenarios. With that said, the numbers can still work out to make it a good financial deal, it's just less automatically true.
tokyodude 8y ago
I'm not sure I'm convinced. To give an example a recruiter once tried to get me to move to some place in India (2002). He told me I'd be making $30k a year which was 10x what locals made so I'd be living like a king. Even if that was true that I could live like a king for that salary in India all I could think about is how I'd be stuck there because I'd have no money to leave to a more expensive place in the future.
- fossuser 8y ago
  Yep - this is an extreme example, but the main reason it's a bad idea. If you live in a high cost of living area, but are okay living with roommates you can save a ton of money. More than enough to make up the difference compared to living in a low cost of living area. You also get better quality of life and a lot more opportunities - meeting people for work/friends/dating. It's also better to have a high salary in order to more easily keep a high salary. I think you also learn more faster from increased exposure to talented people. I grew up in Buffalo which is a nice and very cheap place, but there was nobody to learn from.
deleted 8y ago
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feri339 8y ago
Can't speak for anyone else but I gladly take a hit in my disposable income (it's not that much of a hit) if it means I can live in place where a lot of interesting stuff is happening aside from work (Berlin, NYC, Amsterdam, etc.). I don't need a big flat and I have few expensive hobbies. Maybe it will be different in my thirties and forties but right now I want to either live in a (cool) city to work on exiting projects or be travelling. It may sound pretentious to some, but it's what I want. I would imagine quite a few people feel similarly. In that way a campus in New York City makes sense I believe.
dragonwriter 8y ago
> People who understand the lower salary is easily made up for by lower living costs. But it's not for lots of people who can afford positive savings in both locations, unless the absolute pay difference is less than the absolute difference in CoL at the level they would maintain in each place; even people who would prefer the lifestyle and environment of a cheaper (often rural) place often spend most of their working life in an area with a more robust economy and higher pay and CoL to increase savings, and then retire to the cheaper place. (A lot of the net domestic migration out from CA is, I suspect, that, as people executing that strategy reach retirement.) And that's not to say anything of how that utilities balance for people who actually prefer the lifestyle and environment of the more expensive location.

People who understand the lower salary is easily made up for by lower living costs.

by ndnxhs 8y ago

People who understand the lower salary is easily made up for by lower living costs.

That's partly true and partly not. In particular, if one anticipates returning to a pricey location later in life (e.g. needing to take care of elderly relatives there), one has to save for retirement at a higher level than if one can stay in the cheaper place forever. Cost of living comparisons used to justify salary reductions rarely account for such scenarios. With that said, the numbers can still work out to make it a good financial deal, it's just less automatically true.

tokyodude 8y ago

I'm not sure I'm convinced. To give an example a recruiter once tried to get me to move to some place in India (2002). He told me I'd be making $30k a year which was 10x what locals made so I'd be living like a king. Even if that was true that I could live like a king for that salary in India all I could think about is how I'd be stuck there because I'd have no money to leave to a more expensive place in the future.

fossuser 8y ago
Yep - this is an extreme example, but the main reason it's a bad idea. If you live in a high cost of living area, but are okay living with roommates you can save a ton of money. More than enough to make up the difference compared to living in a low cost of living area. You also get better quality of life and a lot more opportunities - meeting people for work/friends/dating. It's also better to have a high salary in order to more easily keep a high salary. I think you also learn more faster from increased exposure to talented people. I grew up in Buffalo which is a nice and very cheap place, but there was nobody to learn from.

deleted 8y ago

[deleted]

feri339 8y ago

Can't speak for anyone else but I gladly take a hit in my disposable income (it's not that much of a hit) if it means I can live in place where a lot of interesting stuff is happening aside from work (Berlin, NYC, Amsterdam, etc.). I don't need a big flat and I have few expensive hobbies. Maybe it will be different in my thirties and forties but right now I want to either live in a (cool) city to work on exiting projects or be travelling. It may sound pretentious to some, but it's what I want. I would imagine quite a few people feel similarly. In that way a campus in New York City makes sense I believe.

dragonwriter 8y ago

> People who understand the lower salary is easily made up for by lower living costs. But it's not for lots of people who can afford positive savings in both locations, unless the absolute pay difference is less than the absolute difference in CoL at the level they would maintain in each place; even people who would prefer the lifestyle and environment of a cheaper (often rural) place often spend most of their working life in an area with a more robust economy and higher pay and CoL to increase savings, and then retire to the cheaper place. (A lot of the net domestic migration out from CA is, I suspect, that, as people executing that strategy reach retirement.) And that's not to say anything of how that utilities balance for people who actually prefer the lifestyle and environment of the more expensive location.