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Say you have a job in Chicago paying $250K annually. Then you get a job offer in Los Angeles paying the same amount. All other benefits are equal. Would you relocate? Remember that LA costs roughly twice that in Chicago.
Well, according to this nifty tool I use, it says you'd need to make $307,758 in L.A. to compare to 250K in Chicago. It also says that L.A. is 23% more expensive.
Given that, your money doesn't go as far in L.A.
However, how much do you like the weather and lifestyle in L.A.? That's what it comes down to. Me, I'd take my $250K and stay put here in Chicago.
While twice might apply in most price brackets the real question is how comfortably you could live on the salary. I think that you could have a very comfortable life anywhere on that kind of income.
You might be giving up some things, and depending if you have a home to sell there might be some real "give backs" in appreciation, but even that come down to individual neighborhoods.
If you were considering salaries far closer to the norm it would be a different story, but once you cross a threshold as high as your are talking about the rules of thumb are not as meaningful.
250k is more than enough to live the life I want to live in Chicago, and I wouldn't want to be anywhere else (Plus I'd be able to afford those long winter vacays to somewhere a bit warmer! LOL!)
Single or family? LA region is prob 30-50% more expensive vs Chic to afford a newer house in a desirable area; LA region (unlike Chic NS/Hinsdale) has few competent public schools, so need to budget pvt schools.
But, if single, many cheap new condos avail for rent on LA's Westside, so COL is perhaps similar to Chic.
Where is office in LA region? Many who work in CenturyCity/BH and live on Westside can have astonishingly short commutes, akin to driving from GoldCoast to Loop.
Gotta value nr-perfect weather; fun driving rds/topography; nearby LV/SF for wkend trips; no need to pay for flts to "escape" weather, either winter cold/salt or summer heat/humidity....and LA Westside's eye candy is only rivaled by Manhattan, but w/less clothing, given the weather....
Don't forget, the state tax burden is differently approportioned in the two states. California (I think) taxes high income earners at 10% or so, versus a flat 3% in Illinois. On the other hand, property taxes will be a lot lower in CA than IL. It still probably works out to your financial advantage (even if you own a house) to live in IL.
A bit of an editorial here: The flat tax structure of Illinois allows high income earners to pay a much lower proportion of state tax revenue than in LA or NYC (Thank you very much!), which is great for me, but as a result property taxes have to be jacked up sky high to pay for the necessary services. A more equitable system would allow a moderate degree of progressivity (multiple tax rates) in the income tax and a reduction in property tax levies. On the other hand, I can sympathize with citizens who are so distrustful of government corruption that they don't want to mess with the current system for fear any changes will make things worse.
Yet another reason why state and local government corruption is bad.
^^I agree with this. I think people confuse the concept of "flat" taxes and "fair" taxes ... they're just not the same thing.
I'd probably be distrustful of government too if I had lived here as long as many of the regular posters on this forum, but I'm not sure that's why things don't change here - the people in power have worked very hard to solidify their place in power and keeping up the status quo - that can be very difficult or impossible for any one person (or even any one group) to change.
With a $250,000 salary, you be able live in Lincoln Park(which is one of the best neighborhoods in Chicago) but you wont be able to afford Gold Coast, Chicago
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