Leaving a HCOL for a LCOL

[The White Coat Investor]

I ran across this gem of a post buried in a thread on the Student Doctor Network EM forum and thought it deserved a lot more publicity.

https://forums.studentdoctor.net/threads/how-bad-am-i-being-taken-advantage-of.1283186/#post-19354652

2011, my first job out of residency paid me about $140/h. long commute (65 miles each way, though done intentionally because this job paid quite a bit more than jobs in town) decent benefits, in a fairly high cost of living area. high state taxes, not as high a CA but too high to ignore. 250k loans. 2 kids. We chose to live in "our town", extended family, lots of life long friends, great social scene, but we were just barely scraping by. putting 18k away for retirement, big monthly loan payment, left with a few hundred or a thousand dollars every mo which always seemed to be eaten up by some sort of "adult life" snafu. My wife and I sat down and started to run the numbers, at my current pay we would be well paid poor for decades. Then the third kid showed up and the $1000 buck a mo we were squirreling away was eaten up by diapers/daycare etc and we were rolling paycheck to paycheck which led to me supplementing with more work, which in turn, led to some spousal resentment because I was never around to help with 3 little kids because I was always at work or in the car coming/going to work. my 9h shifts were basically 12h with clean up time and commute and I was starting to resent her for moving us here and thus making me work so ************************ much just to break above even. A bit about me, I don't super love our job. I like it, and I wouldn't want to live in any other house in medicine but I'm not part of the "This is my calling" clan and fully intend to retire out of medicine as soon as I am able. Obviously after 3 years of this hamster wheel of this work I started to burn out...hard.

At this point I was as crispy and fun as a deep fried tarantula, so my wife and I had an Algonquin roundtable discussion about what we wanted and where we were headed. We decided that our current situation was untenable. I was working effectively 18 12h shifts, spending 36h/mo in my car commuting. missing my children's childhoods. pissing off my wife. not being able to enjoy any of the fruits of my labor, when the whole delayed gratification bug was already biting me hard hearing about my friends from residency who chose more profitable, lower cost places to live, buying sweet houses, new cars and I was renting and driving my Camry with 240k miles on it and not really seeing any growth in my savings. We were going to be living like fellows (slightly better than residents) for life at our current pace. And as an added bonus, I was spending plenty of time seething and silently blaming my wife and squabbling over spending. A bit more backstory, I love my wife dearly, she is the greatest person I have ever met and she's a very rational person so we discussed all our options and we decided...we had to move.

We looked at the south (where I did residency) and Texas. The rumors about Texas salaries alone were enough to pique our interest. add in no state income tax, tort reform, cheap housing, etc. I contacted a friend from residency who was there and confirmed the rumors. He was making about $250/h in a metro area, lived in a nice area about 20 minutes from the hospital and liked the work. So we went out, checked it out, and liked it enough. We struggled mightily with what we would miss by leaving but in the end we recognized, as previously stated, that even if we only did this for 3 years we would gross at a minimum 650k more than if we had stayed and it would alleviate the only real stressor in our lives. So in the summer of 2014 we packed up the family truckster and moved to Houston. Entering year 4 of the Texas experiment, truthfully we haven't regretted it. Doubling your salary changes your financial life which has absolutely improved our regular lives. Loans gone. 15y mortgage on a reasonable (by Texas standards) house is been shrinking. Solo401k maxed out every year. Roth converted IRA every year. 529s for the kids are growing. Taxable account growing. At the end of every mo, we still have plenty left over to do with as we please. we still have enough to fly home (we still call it home even though we live in Texas) whenever we want, or fly wherever we want. We go home for a week or so every couple of months and stay for a few weeks every summer. We speak frequently about moving back, but my wife and I firmly believe that right now is the golden age of emergency medicine and that it won't last forever. Physician salaries and reimbursement are clearly in the crosshairs of the populous as an idiotic "cost containment measure" and a hair cut is coming, but please spare the Hospital's Junior Vice President of Pencil Sharpening....don't get me started. So we want to make hay while the sun is shining and sock it away for a hopeful financial independence from medicine back on our front porch at "home".

I recognize that we made the extreme plunge and not all are willing to risk it. Happy wife/happy life is a good motto to live by but smoldering long term low level misery can really erode your martial bliss. As for a less extreme recommendation, you mentioned locums and if I might offer a suggestion look at travel locums in Texas. I have numerous friends that live all over the country in crappy paying areas, California, Arizona, Boston, Chicago, all of whom fly in and work 10 days in Texas and fly home. They make more in 10 days than they would have working full months in their respective home states and then they are off the rest of the month.

I love some of the lines like these:

I was as crispy and fun as a deep fried tarantula....

We were going to be living like fellows (slightly better than residents) for life at our current pace. And as an added bonus, I was spending plenty of time seething and silently blaming my wife and squabbling over spending....

Doubling your salary changes your financial life which has absolutely improved our regular lives....

What do you think? What would it take for you to move to another state?

[VagabondMD]

Actually, I almost did the reverse early in my career, as I entertained moving from the boring Midwest to join some friends in a dynamic practice in Denver. I remember noting then that in the neighborhood comparable to where we lived, houses cost 2-3x  more. I also noted that traffic was worse, and while they made about 20% more than I did, it seemed like they worked 50% harder to do so. This was before the term “geographic arbitrage” was coined (AFAIK).

Fast forward 15 or so years, they are all still working harder/longer than me, most have a second home in the mountains to support, the traffic is much worse, the cost of living difference is much greater, etc. Now that I am financially independent, I am ironically considering joining them as a part-timer, for the fun of it, to work alongside my old friends, in a couple of years.

It’s hard to know for certain but seems unlikely that had I been there all along that I would have had the ability to work as a part-timer today. None of the friends have been able to go part time or retire, and some grumble quite a bit about their financial circumstances.

Living in a popular, highly-desired place is expensive.

[q-school]

Vagabond MD wrote:

Actually, I almost did the reverse early in my career, as I entertained moving from the boring Midwest to join some friends in a dynamic practice in Denver. I remember noting then that in the neighborhood comparable to where we lived, houses cost 2-3x  more. I also noted that traffic was worse, and while they made about 20% more than I did, it seemed like they worked 50% harder to do so. This was before the term “geographic arbitrage” was coined (AFAIK).

Fast forward 15 or so years, they are all still working harder/longer than me, most have a second home in the mountains to support, the traffic is much worse, the cost of living difference is much greater, etc. Now that I am financially independent, I am ironically considering joining them as a part-timer, for the fun of it, to work alongside my old friends, in a couple of years.

It’s hard to know for certain but seems unlikely that had I been there all along that I would have had the ability to work as a part-timer today. None of the friends have been able to go part time or retire, and some grumble quite a bit about their financial circumstances.

Living in a popular, highly-desired place is expensive.

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have you had a chance to explore credentialing policies at a new hospital as a more matured physician?

especially if there are procedures you were grandfathered in but now require some form of fellowship to offer?

thanks

 

[G]

Thanks for re-printing this gem: "Junior Vice President of Pencil Sharpening" made me laugh out loud.

No, I will not move our home.  However, if/when the state legislature summarily cuts my income to protect the insurance companies (not trying to restart a debate), I will change my practice location/locums elsewhere as alluded to by the author.  I guess the good news for my state is that I'll still spend money to live here, so they'll get a little tax revenue.

[StarTrekDoc]

Life is all about priorities and choices.  Some good liners in there indeed!

We did the exact opposite moving from LCOL Detroit with legacy practice  to HCOL California -- because of lifestyle and weather and what matched up for our priorities.

All said, like the 'treed' thread -- uprooting and taking the leap of faith is not easy by any means.  But then again, med school and residency wasn't a walk in the park either and we all survived.

[SValleyMD]

I would actually pay more to live in podunk America where I can ski, bike, fish, golf so it actually works out perfectly for me.

Grew up in the Bay Area and did couple years of undergrad in NYC and would absolutely HATE to live in either place..

So having land pennies on the dollar and getting paid 2-2.5x what I would makes it perfect for me.. but small town life isn't for everyone so to each their own!

[GorillaDO]

I'm glad this post was brought here.  I am actually planning on moving to LA to join my fiancé doing fellowship there.  She is pulling in around 100,000 a year with fellowship and moonlighting.   We would be looking to rent in Santa Monica (around a 10 minute drive to both our hospitals), which is around 2500-3000 per month for a decent 1-2 bedroom apt.

I was offered an EM job in Santa Monica at a hospital I really like and was wondering if anyone else had info on what is considered going rate for jobs in CA.  I have seen some other jobs for $200/hr as independent contractor status seeing around 2.5 pph.  the specs of the job listed below.

The average RVU/hr billed is 7.18. This works out to an average bonus/hr is around $41 based on how they distribute the RVU's. There is a night shift differential of $20/hr and additional $15 for weekends ($35 for weekend nights). The workload is pretty good at a mere 1.3 pph. It is in a pretty highly desirable area in West LA in a very nice hospital/ED. The ED director seems great and stresses avoiding burnout by lowering amount of shifts and patients seen per hour.  There is a full benefits package, but no loan forgiveness, relocation assistance, or signing bonus. There is a 401K plan, but no company match. This is a SDG, but no opportunity for partnership, there is a small pay raise after being full time for 3 years. Only required to work 12 nine hour shifts a month for full time. Thought maybe this would be OK if I moonlight in a rural area out side the city/state 3 days a month? I have a large student loan burden of 325K that I want to pay off in 3 years after refinancing immediately living a very frugal lifestyle.  Obviously my fiancé will be splitting living costs with me. This location would take all the badness of commuting in LA out of the equation as I would be able to ride my bike to work in 10 minutes every day.

Is this doable?  Could I do some locums in Texas or Nevada (with no state taxes) and make up a difference for the cost of living?

She really wants to stay in the area due to family, but I am concerned about being able to afford paying loans and saving for a house and retirement.  She will be pulling in around 500-600K after her fellowship in MFM. Am I irrational to think that despite our combined income once she finishes fellowship in a couple years?

 

[jhwkr542]

My favorite parts of these stories are when people refer to their housing as moderate, decent, average, typical, etc. I assume people from lcol and hcol areas have very different ideas. Here, an average home for even non physicians is 4 br, 3k sq ft on roughly 1/4 acre lot.

[Zaphod]

GorillaDO wrote:

I’m glad this post was brought here.  I am actually planning on moving to LA to join my fiancé doing fellowship there.  She is pulling in around 100,000 a year with fellowship and moonlighting.   We would be looking to rent in Santa Monica (around a 10 minute drive to both our hospitals), which is around 2500-3000 per month for a decent 1-2 bedroom apt.

I was offered an EM job in Santa Monica at a hospital I really like and was wondering if anyone else had info on what is considered going rate for jobs in CA.  I have seen some other jobs for $200/hr as independent contractor status seeing around 2.5 pph.  the specs of the job listed below.

The average RVU/hr billed is 7.18. This works out to an average bonus/hr is around $41 based on how they distribute the RVU’s. There is a night shift differential of $20/hr and additional $15 for weekends ($35 for weekend nights). The workload is pretty good at a mere 1.3 pph. It is in a pretty highly desirable area in West LA in a very nice hospital/ED. The ED director seems great and stresses avoiding burnout by lowering amount of shifts and patients seen per hour.  There is a full benefits package, but no loan forgiveness, relocation assistance, or signing bonus. There is a 401K plan, but no company match. This is a SDG, but no opportunity for partnership, there is a small pay raise after being full time for 3 years. Only required to work 12 nine hour shifts a month for full time. Thought maybe this would be OK if I moonlight in a rural area out side the city/state 3 days a month? I have a large student loan burden of 325K that I want to pay off in 3 years after refinancing immediately living a very frugal lifestyle.  Obviously my fiancé will be splitting living costs with me. This location would take all the badness of commuting in LA out of the equation as I would be able to ride my bike to work in 10 minutes every day.

Is this doable?  Could I do some locums in Texas or Nevada (with no state taxes) and make up a difference for the cost of living?

She really wants to stay in the area due to family, but I am concerned about being able to afford paying loans and saving for a house and retirement.  She will be pulling in around 500-600K after her fellowship in MFM. Am I irrational to think that despite our combined income once she finishes fellowship in a couple years?

 

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You guys will probably be fine, and Santa Monica is a really nice in general. Has some problems of course but very nice. You'd be able to stay W of the 405 and be gold for the most part. Your combined income is high, but balanced out by incredibly painful housing prices. Get a condo or rent for a while, it will obviously be harder/slower, but still totally doable on double MD income and not being crazy.

SM is crazy busy all the time, and that wears on me (we are there pretty often), but it is an excellent area. Life is all about tradeoffs. Seriously though, with your combined income it wont really matter as long as you plan.

[hightower]

It's posts like this one that always make me think twice about moving to a HCOL area.  I'm currently in the midwest and have been for my whole life.  Very LCOL for what we have and my salary is quite good for the amount of time off I get.  My wife and I travel a lot and I'm always saying when we're on vacation somewhere "boy wouldn't it be great to live here."  I'd love to be closer to mountains and/or the ocean, be surrounded by people with similar political views, more exciting entertainment options, etc.  But, when I really look at the costs and the lower salary, it makes me question whether or not it would really be smart right now.  It's pretty nice being able to travel as much as we do and I know we wouldn't be able to do it that often if we lived somewhere super expensive.  Right now I need to keep focusing on saving aggressively and just be happy with the traveling we get to do.  However, I'm not totally ruling out the possibility of downsizing to an apartment some day and moving to a more exciting place.  It just wouldn't feel right at this point in my life.

[hightower]

jhwkr542 wrote:

My favorite parts of these stories are when people refer to their housing as moderate, decent, average, typical, etc. I assume people from lcol and hcol areas have very different ideas. Here, an average home for even non physicians is 4 br, 3k sq ft on roughly 1/4 acre lot.

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There's certainly an almost comical difference in housing size and features between the HCOL and LCOL areas.  My sister in law in Brooklyn pays 1800/month for a tiny 1 br, 1 bath apt in a pretty shitty looking building near Bed/Stuy she shares with her BF, meanwhile my wife and I pay 2500/month for a beautiful behemoth of an old house in a downtown neighborhood of our small city and it's quite darn nice.  Plus we rent out a bedroom on airbnb and bring in 800-1100/month in rent, so really we're paying a fair amount less for our place than she is for hers.  She doesn't even have laundry in her building and has to pay to have that done at a laundry mat (which is normal in the city obviously).

Yet, even though we have a nicer home and a ton more space and all sorts of luxury conveniences, we don't even come close to getting what she gets in terms of location.  NYC has an endless array of the best restaurants, entertainment, shopping, cultural events, etc, etc, etc that the world has to offer.  And it's all at her finger tips any time she wants to indulge.  We have to get on a plane and leave town to get a taste of that.  Not saying one is universally better than the other, I'm just saying that the building you live in isn't everything.  There's a reason so many people flock to places like LA, SF, and NYC.  It's what you get from the surrounding area that people are actually paying for.

[RogueDadMD]

hightower wrote:

Yet, even though we have a nicer home and a ton more space and all sorts of luxury conveniences, we don’t even come close to getting what she gets in terms of location.  NYC has an endless array of the best restaurants, entertainment, shopping, cultural events, etc, etc, etc that the world has to offer.  And it’s all at her finger tips any time she wants to indulge.  We have to get on a plane and leave town to get a taste of that.  Not saying one is universally better than the other, I’m just saying that the building you live in isn’t everything.  There’s a reason so many people flock to places like LA, SF, and NYC.  It’s what you get from the surrounding area that people are actually paying for.

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Most high income people with kids don't tolerate living in a [crummy-moderator WCI] 1 bed apartment, because they are "doctors" (or whatever) and because they have kids and a higher salary, so they would want a bigger place (whether in the city or suburbs).  Paying that price in NYC makes you a broke doctor, and paying that price for the NYC suburbs means (i.e. New Jersey) means you don't get to indulge any time you want.

So there's a tradeoff either way.

I live in a medium size Midwestern city (in a suburb technically) and even where I am I do wish I had more immediate access to the restaurants/parks etc of our own city, but the poor school choice meant that wasn't going to work long-term for 3 kids since we aren't going to pay.

I do actually agree with you -- I like our nice house in the suburbs and many of the things it provides, but I miss out on other things.

[MPMD]

Very interesting piece.

My wife and I frequently talk about how easy our lives would be if all we ever wanted out of life was to move back to one of our hometowns -- both relatively small cities.

If you live in a HCOLA like we do, I don't advise you go on Zillow and look at houses that cost what you're paying for your condo in your hometown. Not good for the soul.   :lol:

[G]

GorillaDO wrote:

Could I do some locums in Texas or Nevada (with no state taxes) and make up a difference for the cost of living?

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Just to fine-tune your calculations, CA is still going to tax you on whatever you earn in TX or NV (undoubtedly, at the highest bracket).  For now, at least you can deduct that from your federal.

[PhysicianOnFIRE]

Money doesn't necessarily directly buy happiness, but it certainly is proficient at reducing misery.