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Everything else equal, if you had to pick, would you choose a higher income in a place stereotyped to have a high cost of living or choose a lower income in a place stereotyped to have a low cost of living?
Personally, I'll choose high cost of living + high income (i.e. California, NYC, Hong Kong, Switzerland, Dubai, etc.)
Most places with high cost of living are mainly due to the high cost of housing. Since housing isn't a particularly important part of my life other than having a roof over my head, it's a place I could easily cut back on. Plus, a high cost of living presents a more formidable personal challenge in pursuit of frugality with bigger potential rewards and savings (if you can find a way to live on less while raking in a fat paycheck.)
but then you have higher income taxes as well. i also dont like the traffic and stress that comes with some of the high cost of living areas, so i would probably choose the low cost of living area with low income if everything was relatively even financially
but then you have higher income taxes as well. i also dont like the traffic and stress that comes with some of the high cost of living areas, so i would probably choose the low cost of living area with low income if everything was relatively even financially
"Everything else equal".. there's no major traffic problem in Switzerland (taxes are another issue)
I generally associate higher cost of living with more job opportunities so I would probably lean in that direction. But certainly there are pros and cons of each one.
Low cost of living. I like rural areas, every place you mentioned made me shudder. Traffic, noise, crowds, forget it. I actually took a pay cut to live in a low cost place, and yes, my rent is cheaper, so is everything else. I don't have to dress like a high fashion model here, with a Juicy bag, Blahnik shoes, and an outfit that costs half a paycheck. I can wear jeans and boots to work, priceless.
Although I'm now retired, it sounds pretty much like a mathematical question. If you make $20K per year more to live in an area that will cost you $10K per year more .... you would be much better off than taking a job paying $10K per year less, in an area that costs you $10K per year less.
If/when you choose to leave the higher paying/cost job/area, you can always return to a lower cost area ... and still work off the baseline of your previous salary. (Young people coming out of college would do very well to recognize this principle ... and go for the job/area with the bigger bucks early. -- The residual effect will follow them throughout their working career!
On the other hand, a low-paying job in a low-cost area, is likely a dead-end situation. Where do you go from there? Plus, when you go to another job, they will make a lot of determinations about your value in the market (and to them) ... from what you were paid at your last job.
Of course, all of this assumes that you have a choice, ... unlike many folks these days who would be thrilled to have any kind of a decent job in either category.
In the Washington DC area there are more high wage jobs and as a result the cost of housing is sky high. The high wage jobs really don't help you unless you are highly skilled and educated. The Sears store in Fairfax is going to pay a cashier pretty much the same hourly wage as the Sears Store in Little Rock Arkansas. But in Little Rock you can purchase a nice home for a mortage of $1000 a month at today's interest rate. If both people work at Sears in Little Rock and earn $8.00 an hour they can afford that house. In Fairfax VA that $8.00 an hour job isn't even going to get you a one bedroom apartment. But if you are an executive type there is little job opportunity in Little Rock in comparison to Washington DC.
Where is the cost of living low and there are plenty of office jobs that pay well?
It totally depends on what you want to achieve and do. I live in a state with a low cost of living in general compared to a lot of states, albiet a bit more on the boring side. Given the opportunity once to leave for employment elsewhere and more active with a higher cost of living I turned it down. At the time, I loved what I did and travelled a lot for my job and for fun and wanted to do it a lot. Therefore, a lower cost of living fit my interest at the time because I was hardley ever home and it was cheap to live there. Now, I'm not talking poverty level, but I lived in a very nice place which would have cost twice as much somewhere else.
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