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Should I pull the plug and buy in a VHCOL area?

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  • #46




    Just came back from SF Bay area. The QOL cannot be beat. Amazing weather, things to do etc. I don’t care, you should go for happiness. Its reasonable that you can service the debt. This whole 2x income are all guidelines, not cancer marker. With AlexxTT. Go for it.
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    Never confuse the QOL on vacation for the QOL living someplace. On every single vacation, I imagine myself living in the location, and the lifestyle always seems better than what I have at home.

    Then again, at home, I go to work, have a laundry list of things needing to be repaired or replaced at home, have kids that need to be supported, dogs that need a break from destroying the house to go on walks, bills to pay, etc.

    On vacation, it is all rainbows and ponies, great sites and activities, early cocktail hour, sumptuous meals, etc.

    Interestingly, of all of the places I have ever visited, SF is one of the few that I could not imagine living there. There are some very lovely places and interesting cultural activities, but these do not drive one’s daily happiness. I have not done an exhaustive study of the area, and I am sure that I could find acceptable places to live and work, but I was never motivated sufficiently to do so.

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    • #47







      Just came back from SF Bay area. The QOL cannot be beat. Amazing weather, things to do etc. I don’t care, you should go for happiness. Its reasonable that you can service the debt. This whole 2x income are all guidelines, not cancer marker. With AlexxTT. Go for it.
      Click to expand…


      Never confuse the QOL on vacation for the QOL living someplace. On every single vacation, I imagine myself living in the location, and the lifestyle always seems better than what I have at home.

      Then again, at home, I go to work, have a laundry list of things needing to be repaired or replaced at home, have kids that need to be supported, dogs that need a break from destroying the house to go on walks, bills to pay, etc.

      On vacation, it is all rainbows and ponies, great sites and activities, early cocktail hour, sumptuous meals, etc.

      Interestingly, of all of the places I have ever visited, SF is one of the few that I could not imagine living there. There are some very lovely places and interesting cultural activities, but these do not drive one’s daily happiness. I have not done an exhaustive study of the area, and I am sure that I could find acceptable places to live and work, but I was never motivated sufficiently to do so.
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      You are right. But that weather is excellent. That alone is worth quite a bit. That being said, I'm not moving there ha!

      Also, I have technology bend and like to meet developers/programmers etc which they are a plenty there.

      But you're right, oppressive taxes, lack of significant savings will probably drive me nuts. Still, adversity is the mother of invention...

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      • #48
        So much is the personal emotional stress. I live in the HCOL NYC suburbs. I look forward to the day we can move to a more MCOL area within striking distance. That won’t happen til we retire. I would feel less stress if we didn’t have the ridiculous state taxes and $25,000 per year property taxes. This, and I bought 20 years ago for 440K. The 950K current property value does not feel wise from an investment point of view. That said, we are still saving 165K on 575k income. I just wouldn’t do it again if I could persuade my wife to go elsewhere. Family, you know.
        My Youtube channel: https://www.youtube.com/channel/UCFF...MwBiAAKd5N8qPg

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        • #49
          As much as I preach to avoid crazy expensive real estate purchases, I do understand the motivation to buy when you're already established in these cities.  Home is where the heart is.  Add to that the fact that we're talking about cities that are very desirable for many reasons (for me, the proximity to the Sierra Nevada Mtns and the Pacific Ocean make SF and LA VERY attractive places to live).  So, I get why they want to buy and settle in.  I just can't wrap my head around those prices.  Also, since I don't LOVE my career, adding more long term debt to my plate is frightening.

          For the record, I think SF weather is great, but my wife thinks it's too cold, lol.  Guess we'd have to "settle" for LA if we ever moved west, haha.

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          • #50


            Guess we’d have to “settle” for LA if we ever moved west, haha.
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            No, LA is a nasty place to live, IMHO.  If the Bay Area is too cold for you, go to San Diego.  Much, much, nicer than LA.

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            • #51
              I'm not trying to pick on anyone, but there was an assertion made earlier that HCOL areas are only more expensive due to housing costs.

              I think that is contrary to conventional wisdom, and I'm curious whether other posters would agree with that assertion (housing is basically more expensive, everything else reasonably same).

              I think that there are lots of parts of life that become more expensive when living HCOL, not just housing.  please continue discussion civilly.

               

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              • #52




                I’m not trying to pick on anyone, but there was an assertion made earlier that HCOL areas are only more expensive due to housing costs.

                I think that is contrary to conventional wisdom, and I’m curious whether other posters would agree with that assertion (housing is basically more expensive, everything else reasonably same).

                I think that there are lots of parts of life that become more expensive when living HCOL, not just housing.  please continue discussion civilly.

                 
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                I hadn’t realized this was debatable. It’s the state taxes, the property taxes, the higher cost of many goods and services. I am amazed when I look at my relatives in Philly how much lower the cost of living is. And that’s not even MCOL. A dinner at a comparable restaurant is 30-40% cheaper, for example. Utility bills are less. The market for many things seems not to be able to sustain the same high prices. Of course, home prices are enormously cheaper. A relative just bought a home 50% larger and much nicer in a comparable suburban area there and paid 200k less than my home is worth, for example. And his property taxes are 8k to my 25.
                My Youtube channel: https://www.youtube.com/channel/UCFF...MwBiAAKd5N8qPg

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                • #53
                  Yes, @q-school, in a HCOL area, everything costs more...except your Amazon purchases.

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                  • #54
                    My garabage collection bill tripled when I moved from a LCOL area to where I'm at now. They must be giving the refuse a state funeral with color guard and bagpipes.

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                    • #55


                      I’m not trying to pick on anyone, but there was an assertion made earlier that HCOL areas are only more expensive due to housing costs
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                      The big financial differences will be made by housing costs and lower salaries for physicians.  I think that lots of other things are probably more expensive, but those extra expenses will be trivial for most physicians.   State taxes are generally only going to make a difference of a few percent.  No one moves to get a raise of 5% or 7%.

                      Gasoline is more expensive in California ( 3.79 a gallon for regular today at the cheap place ) but I don't spend that much on gas in a year.

                      Cars will cost the same.  Amazon will cost the same.  Groceries and clothing are a small expense.  Restaurants might be more in a HCOL area, but are likely to be a different class of restaurant.  Entertainment might cost more in a HCOL area, but again, that's probably why you live there in the first place.  Depending on the area, private schools might be necessary in a HCOL or a LCOL, so that's not a deciding factor.

                      True, it all adds up, but it's primarily the housing costs that make the big difference.  But in the plus column, I might not  need a vacation home as much as someone living in a different area.

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                      • #56
                        ^^
                        No one “needs” a vacation home.

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                        • #57
                          Worth posting again:

                          https://www.financialsamurai.com/scraping-by-on-500000-a-year-high-income-earners-struggling/

                          Child care costs look like a big factor.  Intuitively just about every activity you do with your kids will probably cost more.  There aren't as many open soccer fields or safe parks where kids can just go hang out.

                          Housing is a major cost difference, but the costs of a bigger mortgage are compounded in other areas.

                          Consider property taxes.  If you have a house worth half your annual income in a corn field, and it's taxed at 1%, 0.5% of your income goes to property taxes every year.

                          If you get the same house for 4x the price in the Bay Area, it's 2% of your income.

                          If you double the property tax rate, it's 4% of your income.

                          Finally, if you take a 25% pay cut in moving, it's between 5-5.5% of your income.

                          Your home insurance also gets a lot more expensive.

                          The more money that is going to your mortgage, property tax, and home insurance, the less there is going to pay off student loans and other high interest debt, or potentially tax-advantaged retirement accounts (allocating more money for state income taxes has similar consequences).

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                          • #58
                            Anecdotally, I've had 4 physicians acquaintances from socal who were burnt out from their "physician socal lives." They all left for more money and lower COL. Internal medicine left for megamasion in Nashville. Rad Onc, left for Oklahoma. IM left for rural Oregon.  Colorectal Surg. left for Honolulu(lower COL because he became divorced and downsized). All but one came back within 2 years. I'll let you guess the one that took.

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                            • #59


                              and the emotional toll of coming home exhausted every day after the drive and not being able to spend time with growing children. Forget about going to kid’s school activities or games unless you have shift work.



                              Some are willing to sacrifice things like this in life for the glory of living in the Bay area.
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                              This is the key to me.

                              I can't handle a 5 minute drive to work, so make sure the new "life" you'd be starting is one you'll love. Suburbia, minivans, driving, driving, driving, etc etc etc. Just be honest if that's what you'd all enjoy. Kids are a noble priority, but you can raise kids well in most any place.

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                              • #60
                                Beauty of most doc jobs  -- your job is quite portable if you're willing to be flexible.  That's hard to say for most jobs.  Commute is what you're willing and wanting to do.  Others don't have that luxury.

                                We chose to be 20minutes closer and $400k more expensive in real estate.  totally worth it for us.

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