Affording California

[CordMcNally]

Big dumb doctor house at 1.2M 30 year mortgage 3% interest rate is 5k/month

7k left over to do whatever you want.

$1.2M is not a big dumb doctor house in the desirable parts of CA.

[G]

300k gross

according to smartasset tax calculator for a single person in california,

175k after 19500 deductible 401k contribution. Assume 10k match from employer, 30k in mega backdoor/backdoor roth contributions, have 145k after taxes and after saving 20% gross

145k/12 = 12k/mo

Big dumb doctor house at 1.2M 30 year mortgage 3% interest rate is 5k/month

7k left over to do whatever you want.

I chuckled at big dumb doctor house for 1.2M

[cards67]

Above numbers nail it. I know quite a few singles, dinks in LA making that money. Some bought condos in <$1M range. It shouldn't be too hard. I think the difficulty is when you have kids, need good neighborhoods and/or schools. I too wonder how regular folks make it in places like that.

[ObgynMD]

300k gross

according to smartasset tax calculator for a single person in california,

175k after 19500 deductible 401k contribution. Assume 10k match from employer, 30k in mega backdoor/backdoor roth contributions, have 145k after taxes and after saving 20% gross

145k/12 = 12k/mo

Big dumb doctor house at 1.2M 30 year mortgage 3% interest rate is 5k/month

7k left over to do whatever you want.

1.2 mil will get you a condo in the Bay Area. Childcare is ~3k/mo. Nanny’s are $30/hr for
one kid and expect at least 40hrs/week.

4k left for food, property taxes, disability and life insurance…

If you buy a condo, you cannot save the $19500 in the 401k if you have a child. You cannot eat if you have two kids in daycare.

This is why so many rent. I agree it doesn’t make sense for a doctor to live in the coastal CA big cities on one doctors income alone.

Edited to add the BIG cost in places like LA, SD, Bay Area is housing and associated property taxes. If you rent, or your family is from here/your house was bought a long time ago, then you don’t need as high of an income. Lots of people make it work on <$100k/yr. But they live paycheck to paycheck and many times many generations live under the same roof to support each other financially.

[Hank]

Define “undesirable area.”

What about areas like Bakersfield and Fresno ?

Were you trying to quote and reply to Lithium's previous post?

[blippi]

well he said 300k single. quite doable to buy and save 20%, just have to decide if you want it enough with the col tradeoffs. upside is prop tax won’t budge much after buying despite crazy price appreciation. have lived lots of places and it is worth it for me.

[Turf Doc]

$1.2M is not a big dumb doctor house in the desirable parts of CA.

Yeah i was being a bit tongue in cheek with the big dumb doctor house quip, although i do actually wonder what precisely that means. is it the cost or the sq foot that were talking about? or a combo?

Also considering op is single im guessing that means not buying a house right away? because that would be very helpful

[Turf Doc]

1.2 mil will get you a condo in the Bay Area. Childcare is ~3k/mo. Nanny’s are $30/hr for
one kid and expect at least 40hrs/week.

4k left for food, property taxes, disability and life insurance…

If you buy a condo, you cannot save the $19500 in the 401k if you have a child. You cannot eat if you have two kids in daycare.

This is why so many rent. I agree it doesn’t make sense for a doctor to live in the coastal CA big cities on one doctors income alone.

Edited to add the BIG cost in places like LA, SD, Bay Area is housing and associated property taxes. If you rent, or your family is from here/your house was bought a long time ago, then you don’t need as high of an income. Lots of people make it work on <$100k/yr. But they live paycheck to paycheck and many times many generations live under the same roof to support each other financially.

yeah, in the bay the numbers look a lot worse. tech has so warped everything there i wouldn't want to live there long term unless possibly i and/or so was in tech pursuing a career. LA also has a lot of issues and imo those 2 places are way overrated but i am more of a homebody anyway.

I like san diego and orange county a lot better than LA and the bay. Would also avoid the most expensive parts of OC and SD but i think you can get most of the benefits of being in california in some nearby suburbs there

[ObgynMD]

well he said 300k single. quite doable to buy and save 20%, just have to decide if you want it enough with the col tradeoffs. upside is prop tax won’t budge much after buying despite crazy price appreciation. have lived lots of places and it is worth it for me.

Agreed, single makes a big difference.

[nastle]

Were you trying to quote and reply to Lithium's previous post?

Just a general question, are they really undesirable?

[StarTrekDoc]

1M homes here in the best public school districts of San Diego are doable. renting 3k/month will net you a nice 2-3br 1200sq ft. easy for 300k. My salary only 320k and doing just fine.

[Lordosis]

Having never lived in a high cost of living area these threads always amaze me at how expensive things can be. If you have to live there for your job I understand that. But a physician can have a job anywhere in the country. It would be way cheaper to move your entire extended family someplace else then to live in some of these places.

[Turf Doc]

Having never lived in a high cost of living area these threads always amaze me at how expensive things can be. If you have to live there for your job I understand that. But a physician can have a job anywhere in the country. It would be way cheaper to move your entire extended family someplace else then to live in some of these places.

I would love to see a breakdown like I posted earlier on where the money goes in a LCOL area.

What are LCOL physicians doing with all their money? It doesn’t seem most are retiring earlier because I think that’s very uncommon no matter where you are?

[Huggy]

Having never lived in a high cost of living area these threads always amaze me at how expensive things can be. If you have to live there for your job I understand that. But a physician can have a job anywhere in the country. It would be way cheaper to move your entire extended family someplace else then to live in some of these places.

I so agree with this. I currently live in a LCOL area and have been on the fence about moving to one of the most expensive cities in my state. I've been hesitant though because of my desire to perform geographic arbitrage. Then I come on WCI and read about people spending 1.2m for a condo where mom/dad can sleep in bedroom #2, grandma can take up bedroom #3, and the kids can bring home some leftover lunch from the elementary school so that I can eat dinner Monday-Friday. I don't think any area within 6-8 hours of me costs even a fifth of what it costs to live in these California cities, and I live in one of the most desirable states in the country. 1.2m around me will plop you in a gorgeous large house in the "best" community of virtually every city around me. I get having one life and living where you want to live, but it's tough to comprehend what people are willing to give up to live in a location that they can simply visit often, instead....

[Turf Doc]

I so agree with this. I currently live in a LCOL area and have been on the fence about moving to one of the most expensive cities in my state. I've been hesitant though because of my desire to perform geographic arbitrage. Then I come on WCI and read about people spending 1.2m for a condo where mom/dad can sleep in bedroom #2, grandma can take up bedroom #3, and the kids can bring home some leftover lunch from the elementary school so that I can eat dinner Monday-Friday. I don't think any area within 6-8 hours of me costs even a fifth of what it costs to live in these California cities, and I live in one of the most desirable states in the country. 1.2m around me will plop you in a gorgeous large house in the "best" community of virtually every city around me. I get having one life and living where you want to live, but it's tough to comprehend what people are willing to give up to live in a location that they can simply visit often, instead....

If you're happy where you are i wouldn't move somewhere very high cost of living, there are a lot of benefits as you've mentioned as long as you actually invest the difference.

there's a 99% chance i end up in a HCOL, not VHCOL thank god, because its where i and my so grew up with our families there. It's a super nice place to be but yes there's traffic, the places where doctors would want to live cost >1.5M, and the taxes are high. In some ways im jealous of people whose roots are in LCOL places, but having moved for med school, MAN is where i grew up nice, and i didn't quite realize it until i left. Arguably one of the nicest places in the country.

There's more to life than money. Still waiting to hear a physician's LCOL income breakdown. Plus, especially if one is in a two physician household, i feel like there's plenty of money to live well wherever you want