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Well they are in circles where they feel decidedly poor. Just see the excesses in the Bay area and come out feeling real poor even if you are in the 1% income b

Well they are in circles where they feel decidedly poor. Just see the excesses in the Bay area and come out feeling real poor even if you are in the 1% income bracket. Of course everything is relative and you might need 50 years income to buy a place that would be considered awful in Iowa.

dcolkitt 5y ago
Most of those people in the Bay Area are not forced to live in the Bay Area. Most have fairly portable professional skills that they could bring to a lower cost area. They might take a pay cut, but they’d still certainly be among the highest income circles in Iowa. There’s two primary reasons they choose to continue to live in the Bay Area. One is they value the amenities of the metro. Many view Iowa as a terrible fate, even if they are living in a mansion. In this case, they may be “living poor” in terms of housing, but only because they choose to spend most of their income on the luxury good of Bay Area living. Same way, I wouldn’t be crying for a high income guy who’s always broke because he spends all his money on his boat. Second reason people live in the Bay Area is because it gives them access to very high paying career paths. Even if it’s a bad deal for an L2, by the time they make L6 at Google, their living standards will be much higher than what they could earn in Iowa, even given the cost of living. This group is best thought of as sacrificing consumption today to invest in their human capital. Much like medical residents, while they’re low paid today, they’ll be very high paid in short order. Again, we really wouldn’t feel two bad about medical residents having to drive a used car for a couple years while they rocket up the career ladder.
- aftbit 5y ago
  I feel a lot worse for a medical resident than I do for a Google L2. There are arguments for paying newcomers to skilled fields less, but we shouldn't pay people abusively low wages for physically and emotionally draining work.
- opportune 5y ago
  The third is that if you live frugally in a super expensive metro, your absolute savings rate can be much higher than it would be in rural Iowa (well, covid changed that a bit, but most companies still have “COL factors” on your comp). This is truer for single people, who can live a low impact lifestyle in a studio or 1bed apartment, no car, and taking advantage of office amenities than it is for families.
  - RhysU 5y ago
    This. Saving, say, 10% of income is a whole different game in a HCOL area vs saving 10% in a low one provided that one retires outside of the HCOL area.
ctdonath 5y ago
So cash in and move. I keep seeing examples of Bay Area "awful", and note that one can get a lakefront McMansion within a 30 minute drive of Atlanta for the same price. Too many wallow in the "feel" and don't leverage their opportunity. (Yes, I moved 1000 miles. I know the pain of leaving it all behind, and the joy of 2x the house for 1/6th the taxes and more job opportunities.)
- elefanten 5y ago
  "more job opportunities" is the pivotal one. I don't think most people can check all those boxes together. If you're coming from big tech or big startup in Bay Area, it is unlikely you will find "more [acceptable] job opportunities" in a significantly lower col area.
  - erik_seaberg 5y ago
    This. I moved here from Seattle in 2006, and immediately had 10x as many inquiries from recruiters. Local salaries more than made up for the ridiculous rents here.

dcolkitt 5y ago

Most of those people in the Bay Area are not forced to live in the Bay Area. Most have fairly portable professional skills that they could bring to a lower cost area. They might take a pay cut, but they’d still certainly be among the highest income circles in Iowa. There’s two primary reasons they choose to continue to live in the Bay Area. One is they value the amenities of the metro. Many view Iowa as a terrible fate, even if they are living in a mansion. In this case, they may be “living poor” in terms of housing, but only because they choose to spend most of their income on the luxury good of Bay Area living. Same way, I wouldn’t be crying for a high income guy who’s always broke because he spends all his money on his boat. Second reason people live in the Bay Area is because it gives them access to very high paying career paths. Even if it’s a bad deal for an L2, by the time they make L6 at Google, their living standards will be much higher than what they could earn in Iowa, even given the cost of living. This group is best thought of as sacrificing consumption today to invest in their human capital. Much like medical residents, while they’re low paid today, they’ll be very high paid in short order. Again, we really wouldn’t feel two bad about medical residents having to drive a used car for a couple years while they rocket up the career ladder.

aftbit 5y ago
I feel a lot worse for a medical resident than I do for a Google L2. There are arguments for paying newcomers to skilled fields less, but we shouldn't pay people abusively low wages for physically and emotionally draining work.
opportune 5y ago
The third is that if you live frugally in a super expensive metro, your absolute savings rate can be much higher than it would be in rural Iowa (well, covid changed that a bit, but most companies still have “COL factors” on your comp). This is truer for single people, who can live a low impact lifestyle in a studio or 1bed apartment, no car, and taking advantage of office amenities than it is for families.
- RhysU 5y ago
  This. Saving, say, 10% of income is a whole different game in a HCOL area vs saving 10% in a low one provided that one retires outside of the HCOL area.

ctdonath 5y ago

So cash in and move. I keep seeing examples of Bay Area "awful", and note that one can get a lakefront McMansion within a 30 minute drive of Atlanta for the same price. Too many wallow in the "feel" and don't leverage their opportunity. (Yes, I moved 1000 miles. I know the pain of leaving it all behind, and the joy of 2x the house for 1/6th the taxes and more job opportunities.)

elefanten 5y ago
"more job opportunities" is the pivotal one. I don't think most people can check all those boxes together. If you're coming from big tech or big startup in Bay Area, it is unlikely you will find "more [acceptable] job opportunities" in a significantly lower col area.
- erik_seaberg 5y ago
  This. I moved here from Seattle in 2006, and immediately had 10x as many inquiries from recruiters. Local salaries more than made up for the ridiculous rents here.