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The question usually isn't today's compensation in the new job in the new location; it is potential and expected career growth over the next 5-10 years. If you stay put, what do you expect your career to be like over the next 5-10 years? If you move, what do you expect your career to be like over the next 5-10 years?
Agree that is one dynamic to consider as well. For my career being “mobile” in my 20’s was critical. Now in my mid 30’s its less important. My expected wage growth from 35-45 was be about even in Seattle vs SLC from a % perspective aside from the one time 30% bump.
Moral of this thread: MOVE TO LOW COL area. It is not as glamorous as high COL but you can afford to take vacation to those high COL & enjoy your money in low cost area
I disagree. It’s actually better for her to stay where she is than move to a lower COL. Alabama is not going to offer the same lucrative investment opportunities.
Moral of this thread: MOVE TO LOW COL area. It is not as glamorous as high COL but you can afford to take vacation to those high COL & enjoy your money in low cost area
Well that's some broad brushes. My job is in finance. My job only exists at the company HQ or in places like LA/OC, SF, NYC, Dallas, or Chicago with fewer in metro areas like Seattle, Miami, Atlanta, DC, Boston.
I'm not giving up this paycheck and career trajectory just so I can save some shekels to live in Tumbleweed, OK.
Well that's some broad brushes. My job is in finance. My job only exists at the company HQ or in places like LA/OC, SF, NYC, Dallas, or Chicago with fewer in metro areas like Seattle, Miami, Atlanta, DC, Boston.
I'm not giving up this paycheck and career trajectory just so I can save some shekels to live in Tumbleweed, OK.
There are corporate HQs with large finance departments that aren’t in high COL areas. I’m a millennial and I don’t live far from “Oklahoma” and I make what I would consider to be a DC/LA income, but have half the cost of living. I know plenty of people in finance for the fortune 100 company I used to work for that I live 10 minutes from their HQ that easily clear $150k/yr that when you plug into COL calculators says would be the equivalent of like $250k+ in DC/LA, etc.
In my experience unless your goal and skillset sets you up to literally be top 3-5% of all talent in your field you’ll almost always be better off with a job in a medium to low cost of living area. If you are top 3-5% income in those high COL areas shouldn't be more than a minor inconvenience for very long.
There are corporate HQs with large finance departments that aren’t in high COL areas. I’m a millennial and I don’t live far from “Oklahoma” and I make what I would consider to be a DC/LA income, but have half the cost of living. I know plenty of people in finance for the fortune 100 company I used to work for that I live 10 minutes from their HQ that easily clear $150k/yr that when you plug into COL calculators says would be the equivalent of like $250k+ in DC/LA, etc.
In my experience unless your goal and skillset sets you up to literally be top 3-5% of all talent in your field you’ll almost always be better off with a job in a medium to low cost of living area. If you are top 3-5% income in those high COL areas shouldn't be more than a minor inconvenience for very long.
There is a major risk factor in all of that in that you're potentially derailing your career, temporarily or permanently by doing the move. You wouldn't move to a LCOL area to essentially lateral to the same living standard. The guy that would be making $150k in boonesville likely is already making $250k in DC/LA, so it makes no sense to make the move to take the lower salary. At the very least, you'd need to make the move for the same amount of money, resulting in higher income in real terms. Ideally you'd move for a pay increase.
There is a major risk factor in all of that in that you're potentially derailing your career, temporarily or permanently by doing the move. You wouldn't move to a LCOL area to essentially lateral to the same living standard. The guy that would be making $150k in boonesville likely is already making $250k in DC/LA, so it makes no sense to make the move to take the lower salary. At the very least, you'd need to make the move for the same amount of money, resulting in higher income in real terms. Ideally you'd move for a pay increase.
So you don't think that a guy making $200k in DC couldn't make a move to Kansas City, MO and make $150-$175k? I've honestly found the exact opposite. Whenever companies from DC, Boston, Seattle, etc. reach out to me my first discussion with them is on pay. I don't want to waste anyone's time and I typically put the difference in a COL calculator and take 75% of the pay that the average COL calculator says (as a starting point) and I almost always get laughed at by the recruiters. So, in my experience, I'd be heavily under-compensated in those cities, not the other way around.
This is also why I mentioned having a skillset that puts you in the top 3-5% in your field being important as well. The person in DC making $200k or Kansas City making $150k that is in the top 25-35% of his field as far as skills goes has likely close to topped out. Not a lot further up he/she can go. Maybe some small jumps over the rest of their career, but they don't have the skillset that allows them to go to Google and make $5-$600k/yr. So, would you rather live where your money goes further or take the chance that you can get into that $4-$500k+ income bracket typically reserved for the elite in your field? I know what my answer is. I already make more than enough, I work from home, and I love what I do. More money isn't a motivating factor for me. Time, hobbies, etc. that's what motivates me.
So you don't think that a guy making $200k in DC couldn't make a move to Kansas City, MO and make $150-$175k? I've honestly found the exact opposite. Whenever companies from DC, Boston, Seattle, etc. reach out to me my first discussion with them is on pay. I don't want to waste anyone's time and I typically put the difference in a COL calculator and take 75% of the pay that the average COL calculator says (as a starting point) and I almost always get laughed at by the recruiters. So, in my experience, I'd be heavily under-compensated in those cities, not the other way around.
This is also why I mentioned having a skillset that puts you in the top 3-5% in your field being important as well. The person in DC making $200k or Kansas City making $150k that is in the top 25-35% of his field as far as skills goes has likely close to topped out. Not a lot further up he/she can go. Maybe some small jumps over the rest of their career, but they don't have the skillset that allows them to go to Google and make $5-$600k/yr. So, would you rather live where your money goes further or take the chance that you can get into that $4-$500k+ income bracket typically reserved for the elite in your field? I know what my answer is. I already make more than enough, I work from home, and I love what I do. More money isn't a motivating factor for me. Time, hobbies, etc. that's what motivates me.
Not really my point is very few people even in DC, San Fran, etc. make it beyond that $200-$250k threshold and that's where you want to be if you are in those cities. According to most COL calcs $250k in DC is equivalent to a little under $150k in places like Kansas City. Is it that unreasonable that someone making $250k in DC couldn't find a job making $160-$175k in KC and in fact raise their relative income while taking a real pay cut? Again, if they are superstars in DC, of course don't do it, your trajectory could easily take you to $350-$400k+, but in reality most aren't and they'd likely be more comfortable taking the $175k in KC.
It's been my experience with people in my cohort (professional millennials) they want to live in the big cities or at least the burbs of the big cities and the excuse is always these are the only places that pay well. I have friends in LA, DC, NYC, Chicago, etc. They all say those are where all the good jobs are. But, most just couldn't be bothered to live in smaller cities regardless of whether or not the pay as it relates to the cost of living would likely be a boost. For some, it's family (I moved away from family for good jobs), for others it's "culture". But I guess in my opinion....if you have to live where you have to live then don't complain about money. As the stupid saying goes...."It is what it is". But know there are certainly other options that could give you a relative boost in purchasing power in less expensive cities across the US.
Just to put it in perspective everyone I know and work with near me that are professionals clears $150k+ as millennials aged 30-36. If I put $150k in my area in the COL calc that's equivalent to just shy of $300k in DC.
Yes, so-called Adulting can be expensive, Jenny, if you make stupid choices. Welcome to being a grown-up.
100K is just not that much money these days.
Start with taxes.....then with health insurance. Since most areas have no good transit, said family (two incomes) needs two cars.
If they want to move to a low cost area...well, they will have to make less too!
Throwing some numbers out.....family of 3.
100K
-20% state and local and car and sales taxes
-------------
80K net
-20K health insurance, dental, etc, etc (actual USA health care is 11K per person per year)
-----------
60K
Let's say they rent a hour for $2K per month (that's a ranch house around here) plus avg. $250 utilities (including cell phones, heat, water, etc.) per month).
-$27,000
------------
$33K left
Two cars, gas, insurance at average cost (mid-budget range) = $8,000 per year
25K left
Food including both eating out and in = $10K per year (includes household supplies, soap, etc.)
15K left
So, they have 15K for savings, gifts, college funds, IRA's, clothing, furniture and anything I haven't thought of.
Let's put it this way. They cannot afford to go on a real vacation.
I'm not crying for them but it's not exactly like the Belgians, French or Germans I meet at Club Med who are there for 3 weeks (probably 15K total).
So you don't think that a guy making $200k in DC couldn't make a move to Kansas City, MO and make $150-$175k?
This is also why I mentioned having a skillset that puts you in the top 3-5% in your field being important as well. .
Well, if you have the math skills you display, you know you can take
1. The percentage of people who might have or be capable of that skillset (let's put it at 10%).
2. The percentage who are in the top 3% of that.
3% of 10% = .3%
So when you say "you don't think that a guy?" - my answer is NO.....99.7% of "guys" can't do this.
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