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  • #46
    Originally posted by Bdoc View Post

    No assumption, OP says family lives in the HCOL area. And i think most would agree that HCOL area are usually places with good restaurants, theatre, museums, sports teams and alot to do. LCOL area usually have less and why they are low cost. Now are there exceptions, sure. But if LCOL areas were that amazing they would become HCOL areas .
    I always found it interesting that people what to live near all the things to do yet commute an hour or more each way in the traffic to their daily job.

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    • #47
      Originally posted by Bdoc View Post

      No assumption, OP says family lives in the HCOL area. And i think most would agree that HCOL area are usually places with good restaurants, theatre, museums, sports teams and alot to do. LCOL area usually have less and why they are low cost. Now are there exceptions, sure. But if LCOL areas were that amazing they would become HCOL areas .
      I used to believe this line of thinking but no longer. Buying a house that expensive means they will be forced to work full time for a very long time and likely have little free time or extra cash for all these fun activities. Not only that, but I know a lot of people who live in NYC and LA and when I ask them if they’ve done the things I’ve done in my time traveling there they typically haven't. For instance, friends in LA who have never even been to a beach. Never bothered driving out to Yosemite or Joshua Tree National Parks until we came to visit. Our family in NYC, same story but with museums, common tourist attractions etc.
      I decided long ago that I’d rather live somewhere cheap to spend my working years and be able to afford to travel to awesome places more often instead.
      I’d like to retire in Hawaii though. But I’d be fine living in a tiny house up in the hills.

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      • #48
        Originally posted by burritos View Post
        When rich people(paper wise) objectively live like poor people(same quality abodes, treading water, just different geography), isn't this a way to reduce wealth inequality?
        No. They are still richer. They've just chosen to keep their money in the bank, instead of using most of it to buy material things. (If anything, it may make inequality worse, as the rich person who has his money in the bank instead of his house/multiple very expensive cars/exotic annual vacations can use that money to buy political power and get laws passed that favor him becoming even richer than he already is. Remember the Golden Rule: he who has the gold rules. A used Lamborghini doesn't work as well for buying state senators and Congresscritters.)

        What rich people "living downscale" does do, though is better hide their wealth from those who would be envious of it. I can look at some of the buildings shown in this thread an accurately deduce that the owner is rich; I can't do the same with a modest dwelling. And of course not tying up all their money in material possessions gives the rich a bigger cushion to protect themselves from those SHTF moments life throws at everyone occasionally.

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        • #49
          Originally posted by GasMomDoc View Post
          We live in a very HCOL area and have been looking at homes for a while. Fixer uppers in bad school districts are $1mil and houses we would consider (not even super impressive) but we would totally be happy with in good school districts are $1.5mil+. We are a dual MD couple making a joint salary of $600k but likely closer to $700k in the next couple of years (but wouldn’t bank on this). This is where both our families are from (very important to us) and in a great area to raise children. Any tips or advice? How do people make it work in vHCOL areas? Thoughts?
          There are several good threads on WCI forum about VHCOL house buying, search for that or "bay area" (one of these threads is mine).

          Short answer, people make it work by saving elsewhere. For example, we don't take fancy vacations, or buy fancy cars, or eat at fancy restaurants. We like living in Silicon Valley, but also have an escape plan. On that income, you can make this work if you chose to.

          We're on track for early-FI AND bought a house double that price. No two financial pictures are the same. Run the numbers, assess the risk, and you'll be ok.

          My two cents. I'm not getting dragged into this in detail again.

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          • #50
            I wouldn't buy a 1.5M house with "only" 20% down on $600-700K salary. Too risky for my taste. If one, or both, were to get furloughed, burn out, want to reduce hours, and/or if the housing market collapses or the kids develop expensive medical problems and need therapy not covered by insurance, parents need financial help, etc, this large mortgage could submarine your financial position, and it's one of the few things that could given your fiscal discipline and great progress to date. That's not to say you can't ever purchase a $1.5M house there, but I would rent for a couple years and save up a larger downpayment.

            The maxim of mortgage <2x income is a useful guideline, but I feel it is inappropriate for more costly homes. Obtaining a $300K mortgage on $150K salary has a different risk profile than a $1.2M mortgage on $600K salary. And because there are reasonable alternatives to avoiding a $1M+ mortgage, like renting, it seems unwise.

            Best of luck in whatever you decide.
            Last edited by portlandia; 11-09-2020, 02:43 PM.

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            • #51
              “I always found it interesting that people what to live near all the things to do yet commute an hour or more each way in the traffic to their daily job. ”

              Just a reminder. in large urban areas (required for VHCOL and HCOL) people don’t disappear when you want to go out. There is a real friction that in reality doesn’t fit with daily family life. It’s there if you want it, rarely used. If a commute is difficult, so is access to amenities. It really has to be a strong motivation.

              The one big difference is air travel. Huge difference and much superior in urban locations. The drives, connections and schedules honestly suck the smaller you go. Physicians typically are earning frequent flyer points on business travel (refer to all the threads for travel miles and the topic is credits cards).
              Regarding sports teams, yes a case can be made for the top pro sports. But don’t kind yourself that sports don’t exist and are extremely involved in the local community. When the Heisman Trophy winner comes from a town too small to have its own high school, plays in Athens and never considers a MAC school his Dad coaches at, you can bet the local community is involved, BEFORE he was born. Hoosiers, Friday Night Lights, French Lick (Larry Bird) all types of community support exists that is not near as significant in urban cities. So many high schools, is neighborhoods not the towns.

              Bottom line, most urban amenities are nice but rarely used.

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              • #52
                I'm assuming we're talking about the Bay Area here, so I can weigh in a bit. We are also looking to buy there (currently live in our 'vacation home' in Tahoe, but want to move to be closer to work and for parochial school) and it truly is a crazy market. Renting is also very difficult, and you get relatively terrible homes for 6K/month plus, and they may come with significant restrictions (no dogs, etc) that don't work for you. I think that a 1.5 million home on a 600-700K annual salary is doable, it just depends on your other debts and what else you're willing to cut. You can afford the house, but probably no fancy vacations, etc. It's just all about what you value. I do agree that you need to have a bit more of a cushion before jumping into a huge house purchase; I would plan on 20% downpayment and at least 6 months of expenses saved in cash on top of that (with those expenses including the size of your new mortgage).

                I also wanted to disagree about rarely using urban amenities - I think *all* amenities, when you live in a place, are less often used then when you're just visiting. For instance, we live about a 15-20 minute drive from several world class ski resorts, and have annual passes to one of them with discounts at the others. How often do we actually ski? Well, with two little kids and working full time... maybe 20 days a season? That's not bad, and more than we would ski if we didn't live nearby. Similarly, when in the Bay, you'll definitely be using some of the amenities, and I include in those amenities things like great local libraries, farmers markets, local parks and beaches, etc. Again, it's all about what you value and what you want your life to look like.

                Good luck! It really is madness out there, and I wish we had some of that tech money, instead of just being doctors. Sigh.

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                • #53
                  "LCOL areas were that amazing they would become HCOL areas "

                  LCOL areas are low cost because the salaries in the local area are lower for what ever reason, most likely economic supply and demand, local business oportunities, , geographic isolation, or a miriad of other causes. However one aspect of being a physician , at least in some specialties you have the option of a good salary in a low cost of living area which is a great advantage to your financial well being. Most other occupations do not have that luxury for the most part.

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                  • #54
                    Originally posted by artemis View Post

                    No. They are still richer. They've just chosen to keep their money in the bank, instead of using most of it to buy material things. (If anything, it may make inequality worse, as the rich person who has his money in the bank instead of his house/multiple very expensive cars/exotic annual vacations can use that money to buy political power and get laws passed that favor him becoming even richer than he already is. Remember the Golden Rule: he who has the gold rules. A used Lamborghini doesn't work as well for buying state senators and Congresscritters.)

                    What rich people "living downscale" does do, though is better hide their wealth from those who would be envious of it. I can look at some of the buildings shown in this thread an accurately deduce that the owner is rich; I can't do the same with a modest dwelling. And of course not tying up all their money in material possessions gives the rich a bigger cushion to protect themselves from those SHTF moments life throws at everyone occasionally.
                    What a brilliant gender neutral choice! I've never heard the term "congresscritters" before, is that a thing? I want to call everyone a critter now. I

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                    • #55
                      Originally posted by Random1 View Post
                      "LCOL areas were that amazing they would become HCOL areas "

                      LCOL areas are low cost because the salaries in the local area are lower for what ever reason, most likely economic supply and demand, local business oportunities, , geographic isolation, or a miriad of other causes. However one aspect of being a physician , at least in some specialties you have the option of a good salary in a low cost of living area which is a great advantage to your financial well being. Most other occupations do not have that luxury for the most part.
                      The OP can swing it, and it is a free country but FLP is not totally wrong.

                      Having lived in several places: HCOL, MCOL, LCOL i would say that HCOL is indeed overpriced and overrated for doctors.

                      Geographic arbitrage is real.

                      You get paid less and it costs more in the city for a doc (everyone else seems to get paid more).

                      A really nice low to medium COL place has everything i could desire and easier living.

                      I find myself gradually migrating away from the hustle and bustle, crowds, impossible parking, traffic and closer to trees, trails, and fishing.

                      My wife is more of a city mouse but covid has made her appreciate my point of view.

                      She mostly wants to be close to a nice grocery store, and that is fairly ubiquitous nowadays.

                      I think my next place will be further away, with a bigger yard, (greenhouse? room to plant trees? fishin’ hole on premises? no state income tax for congresscritters to squander? ).

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