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I think the ultimate answer to the OP's question is you don't become "comfortable", let alone rich, by doing things the standard way. In one or more ways, you have to do things differently than what most people are doing.
I fogot to mention Jacob from Early Retirement Extrme. He retired in his 30s and lived in the SF Bay Area. He lived on a very minimal income. He did things just as:
--No kids.
--Shunned car ownership and rode his bike everywhere.
--Lived in a trailer park.
--Didn't eat out.
--Didn't have cable.
--Learned how to cook nutritious food at very low cost, defying the notion that eating healthy requires spending a lot on groceries or shopping at Whole Foods.
--Acquiring the skills to fix and maintain things on your own instead of paying someone else to do it for you.
--You must value creativity, efficiency, and independence over convenience and following the crowd.
I try not to be judgey about people who "are born, live, and die all in a small circle" but I admit I would never want to live that way. Boooooring. But as I get older, I do see that the cost of mobility is more social isolation and less of a sense of community, which leads to various social and health problems. It's not inevitable, but it happens that way a lot.
A valid point. It is possible to make it on a modest income in high cost areas. That generally means shared housing, though. Looking for alternatives as you did is also a necessity in high cost areas. But I think you are right. It's usually easier to retire early if you live in a lower cost area. To retire early (and by that I mean more than just a couple of years early at age 60 or 62) requires a high savings rate from a young age (more than 25% of income). Few people can save that much in high cost areas from the get go.
I have many friends who live here and never left our somewhat backward town in Tennessee. Many are incredibly sheltered and have no clue what it's like in most of America. I left and moved back, but am grateful to have lived in normal America.
Part of the benefit of living around here is that I have a lifetime of friendships and family to draw upon. I could use a truck, but I can almost find someone to lend me use of their truck for an evening. Things like that you can't always put a dollar value on.
I have many friends who live here and never left our somewhat backward town in Tennessee. Many are incredibly sheltered and have no clue what it's like in most of America. I left and moved back, but am grateful to have lived in normal America.
Part of the benefit of living around here is that I have a lifetime of friendships and family to draw upon. I could use a truck, but I can almost find someone to lend me use of their truck for an evening. Things like that you can't always put a dollar value on.
You aptly illustrate both the pros and the cons. I know I would never want to move to the ho-hum East Coast suburb where I grew up. Nothing wrong with it, but it doesn't fit my life. I didn't have many friends there, anyway, so not much to draw on if I moved back.
i have to say our location here in nyc has played a major part in our financial success . i doubt we would have done as well or been in the position we are had we lived somewhere cheaper .
the opportunity's were all around us , we had good jobs and many career paths to follow , if you take control of your life and don't drift to whatever job you fall in to . the investment opportunity's here in real estate were fabulous .
i can do consulting work here in retirement and work 1 day a week and make many many many days pay in pa. where we were going to move .
last month i finished up a 2-1/2 month project that took me 4 days a week and paid an extra 5 digits in income . my wife needs another 10k in dental work so it worked out great now i consult 1 day a week .
i can work whenever i want and as many days as i want or not at all because of the opportunity's here in retirement . i have the potential to work very little and earn more than we would save elsewhere .
for a retiree who ends up needing to work , cheapsville can be a poor choice down the road . nyc including the boroughs and long island has such an expansive public transportation system you can do fine with no car . my wife never even drove and still doesn't . . if the day came i couldn't drive we can do just fine here .
these are some of the reasons high cost areas are high cost . they are not just high cost in a vacuum .
Last edited by mathjak107; 02-26-2017 at 05:02 AM..
Well, if your income is low you are careful with finances, for example, you don't eat at restaurants 7 days a week, shrimp for dinner and breakfast out. You don't buy lottery tickers.
the problem is cost cutting is only the same as more income until it isn't . .
it only appears as such until expenses keep rising and you have nothing else to cut back on . you really need both a source of increasing income and the cost cutting working together .
personally i have put a lot more effort in to the increasing income side and not as much effort in to the cost cutting side as we do like our spending . but whatever works is fine , until it doesn't .
I had to go back to the OP and look at the questions again.
Quote:
Originally Posted by LowonLuck
How do people /families make it ... high housing costs?
For example someone that makes $15-$20 an hour ... rent is $1500-$2400 a month... in DC.
@$15-20hr. Call that $17.50/hr x 3000 hours clocked between family members.
That totals up to $52,500 in an area where the median income is $90,000
Even if one of those jobs includes good benefits like HI ... it's gonna be hard.
If they want to try to have the rest of a life... they can't afford to pay more than 25% for housing.
That's 25% of NET income and including utilities and any other expenses to be there.
(this ROT is true for everyone and everywhere btw... not just DC)
Allowing a minimum withholding (FICA etc) that gets them an $858/mo budget.
With $158 for utilities etc... that's just $700 available for "rent" each month.
Absent a serious increase in household income...
no less than the $800- $1700 per month and net of taxes implied above...
they CAN NOT AFFORD to remain there and pay the quoted Market rent rates.
Quote:
I know for me, moving is not an option because...
Your friend doesn't have that option.
Well, not without some sort of subsidy or maybe in some sort of public housing.
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I moved all over the place following jobs to places with decent wages and affordable housing. I never even considered places like San Francisco or NYC. I knew from the get go major metro areas on either coast would just keep me poor. Housing for me was always the cheapest I could get in an acceptable area. I never paid more than I had to and I was always looking outside the box for a better deal. Once I lived above a small factory. It was a great apartment and I got it cheap because I also provided a little security just by being there. I worked days and the factory worked days. It was very quiet at night but during the daytime it was quite noisy. But the rent was 1/3 of what the apartment would cost in a residential area.
It would never even occur to me that I had to stay home. Live in the same city as parents and relatives. To me moving away was a rite of passage and part of growing up. I had to learn to be on my own and take care of myself. It's hard for me to understand people who are born, live, and die all in a small circle on the map. I always wanted to see and do as much as possible.
Usually places with decent jobs and a low COL are never your top choice areas. That's just the way it is. I always had to compromise. I survived. 15 winters in Minnesota almost killed me but I made it out alive! Because I was willing to do what I had to do, I got to retire young, before I was all used up. To me, it was worth it!
True. Although another option is to live in NYC or SF and get your experience and skills so that you are marketable and have more choices on where you can move, while also having the better chances at a decent salary. You'll have to suck it up and live with roommates and/or be pretty broke for a while, but it is an investment in your future.
This is what I did. I lived and worked in NYC and was broke most of the time that I lived there. However, I had career opportunities there that I would not had in most other places. I built my experience and career and was able to move on to a great company and job with lots of upward mobility in a lower cost of living place (Southern NH).
And, even though I was pretty broke during all those NYC years, it was the experience of a lifetime in so many ways (just not financially). Just the diversity of friends I had has made me such a well-rounded person with a very wide perspective. I would not have had that had I stayed where I grew up. My NYC experiences has served me well in my life in so many ways.
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