Does LCOL or HCOL lead to more wealth?
In a HCOL area everything is more expensive but the salaries are higher. I’m married and we are both working. TC is $180K each so $360K household TC. If we moved to austin, everything is cheaper but salaries are lower. Since we are renting and have no kids, I suspect we can save more money by living here in sf. But in a few years we want three kids and a five bedroom house with a backyard in a good school district. In that case I’m thinking we’d save more money in austin. But the problem is, would we be able to get these same type of jobs in austin? I know austin is hot with tech but not many FAANG have Engineering offices out there. What do you guys think?
High COL are more prestigious. Having a mansion in Kansas is less cool than having a condo in Manhattan. So gotta factor more than just wealth accumulation
😂😅🤣 prestige. WTH cares how you live.
I’m not concerned with prestige because you can’t buy thing with prestige.
Austin isn't LCOL. Typical LCOL ranges from $70k to $150k. Its usually much much better to just go to the bay area, Seattle, etc to job hop for better pay
You can probably save more in high COL areas provided that there is a high concentration of similar minded companies in the area. As a quick reference. I'm in a medium COL and doing relatively well, like 130k at five years. If I could move to say the bay, I'd guess that I could double my TC. Which means that I'd get about 80k net more a year. My expenses would probably only go up 30k to 40k, so now I'm saving 50k more a year and my growth and opportunities are way higher pushing my ceiling substantially.
There’s an over concentration on TC on this app/site. IMHO, TC gets you to a comfortable retirement. It’s your investments (and I don’t mean stock market) that leads to wealth. I worked and FIREd in a MCOL area. Could probably put in another 10 years and build some solid wealth, but meh.
Elaborate on investments please, real estate?. Also, did you have kids?
All here: https://us.teamblind.com/s/jNKKtXVa
How much you save after taxes and expenses is what leads to wealth
Working in the bay/seattle to save up 500k or so will buy you that house in austin outright, at which point you won't mind the pay cut as much.
Seems like I would come out ahead initially. But would I still come out ahead over the course of 20 years with lower wages?
Too many factors to say for sure. Long term assuming your career is stable you may likely save up more working in HCOL. You may want to do some math on interest and taxes on 2+ million of house and see how much that would free up every year compared to how much you expect to lose in income. You'll also need more to retire in HCOL.