Millionaire in high cost area vs millionaire in low cost area

[JonathanLB]

Yeah real estate is fantastic overall but absolutely can be loooong term. I have a substantial stake in a high rise apartment downtown but it hasn’t netted me a dime in 7 years, actually coming up on 8, and that will continue for the next 2-3 years making for almost a decade. It’s rather ridiculous but since the building is older, it needed elevators replaced, lobby redone, fire suppression systems added, rooftop patio / hangout area created, windows redone for energy efficiency, siding redone for looks, and now each individual unit as they become available are being remodeled with granite countertops and nice cabinets and flooring, etc. They have to keep up with the market downtown but it greatly increases the value of the building. Despite no cash flow for this time to me (the building makes money, which pays for the remodels), the building has at least doubled in value and outpaced the larger market substantially because of the rising rents, prime location, and renovation work.

Then finally at the end of this 10 year journey, it’ll start actually paying me again, something that last happened so long ago it’s hard to remember haha. Many real estate investments I’ve had are 3-7 year waits for profits or cash flow but they end up being great deals.

[JONOV]

Assuming one is working for their living and the term "millionaire" is a code word for someone that works and saves and invests to grow their net worth:

My .02? The guy in a high COL area is less likely to feel "wealthy" than a guy in a low COL area. The reason isn't greed, or envy, but rather that he has less disposable income at the end of the day. I can say this as someone that grew up in a nice area with a lot of people that earned good money and would qualify as the 2% in terms of income, if not always net worth (though most of them were getting there with net worth.)

They spend money investing in their kids; they buy a house that often is rather modest, but in a good school district in a neighborhood that has a history of appreciation; that isn't cheap, and it often comes with high taxes. They save for their kid's college, hoping that they have the luxury of paying for an education at a private or out of state college if that's the best choice for their kid. They invest for retirement. When its all said and done, that family is unlikely to "feel like" they are inherently better off than 98% of the country.

Whereas the guy that owns four Car dealerships in Greenville, North Carolina has a different reality. He can buy one heck of a nice house at $100/sf. His property taxes are 1%. The boat and vacation property are much more achievable.

What everyone seems to miss is that its a lot harder to get have that kind of income in Greenville, NC. And, if you've spent your life in a higher COL area, you most often like the things that come in a higher COL area. There's usually a lot more things that make it desirable.

Some areas are expensive with comparatively little value returned. But most aren't.

[mathjak107]

It really depends on the ratio of income vs cost of living . I live in queens and we had a house in the poconos .. we could save about a third of our costs living in pa . But salary’s for what I do we’re half..

High cost of living areas are usually high cost because they have an abundance of high paying jobs ... if you have a good job you may very well be in better shape.

You really have to look at individual situations