Study Confirms San Diego Fairs Poorly For Wealth Building (Los Angeles: best cities, sales)

[USDefault]

No secret to regulars: Study: The best cities to get a job and save money (Hint: Not San Diego).

Best places to build wealth were Phoenix, Seattle, and Charlotte. However, Los Angeles, dead last. San Diego fared poorly. Key reasons California cities were lousy for wealth-building are cost of living, housing, taxes, etc., all of which rapidly chew up your take-home pay. "Just looking at take home pay, San Diego ranked the second-worst in technology out of the 30 cities, and fourth-worst in finance and health care," according to the piece.

And if you want to work in tech, the article is clear: move to a no-income tax state like Texas or Washington. The article says tech workers in San Diego "can expect to retain $2,772 (second-lowest of all cities) a month," whereas in "Seattle, which also has high home prices, workers hold on to $5,493 a month." That is an enormous difference, basically doubling the amount of money left in your pocket after taxes and your cost-of-living expenses.

I've carped about how, from a financial point-of-view, Southern California and California's large cities are terrible for young adults and young families. I didn't need a study for confirmation, as a rudimentary understanding of math and finance inexorably leads to this conclusion. Though when I bring up San Diego's (or LA's or SF's) sky-high housing costs, outrageous state income taxes, close to highest-in-the-nation sales taxes, gas prices, water prices, energy prices, insurance rates, all manner of government fees -- some would say, "oh, the taxes aren't too high unless you're earning $500k a year." No. All of these costs, fees, and taxes matter, and matter a lot, for your financial strength and independence. Because every single dollar taken away from you by the parasitic California state government is a dollar you lose forever, and it won't be there, working for you in productive investments for the rest of your natural life. Meanwhile your fellow citizens working and residing in lower cost-of-living locales, and especially low or no income tax states, are pocketing money hand-over-fist. They can direct those resources to productive investments which will redound for the rest of their lives, earning and earning and earning, until death. And this study confirms earners in the lower cost-of-living, low-tax states are leapfrogging California residents by leaps and bounds.

It was said best in the other thread about leaving: don't come to San Diego if you are young, or a young family, salaried, and want to achieve financial independence. Come to San Diego as an early retiree -- after you have achieved financial independence in a low-cost locale that protects you from the California government's voracious appetite for your money. The sun, beaches, and people will still be here.

[Opt_10]

Originally Posted by USDefault

No secret to regulars: Study: The best cities to get a job and save money (Hint: Not San Diego).
It was said best in the other thread about leaving: don't come to San Diego if you are young, or a young family, salaried, and want to achieve financial independence. Come to San Diego as an early retiree -- after you have achieved financial independence in a low-cost locale that protects you from the California government's voracious appetite for your money. The sun, beaches, and people will still be here.

I guess you meant Florida which is where the retirees go. I would take California any day over Florida (except for the warm beaches which you can always vacation at). and Charlotte? No way. North Carolina is often in the news and not for good reasons. I do get your point about the high cost of living though. 10 cents a bag? Really? It's lame.

[USDefault]

Originally Posted by Opt_10

I guess you meant Florida which is where the retirees go.

I meant San Diego. Meaning, if you want to live in San Diego, do it as an early retiree -- after you make money hand-over-fist in a low-cost, low-tax state. Instead of the other way around, working for a long time in San Diego (or LA or SF), forking over tens, and quite possibly hundreds, of thousands of dollars in excess state taxes, fees, and skyhigh cost-of-living expenses during your prime earning years.

[Opt_10]

Originally Posted by USDefault

I meant San Diego. Meaning, if you want to live in San Diego, do it as an early retiree -- after you make money hand-over-fist in a low-cost, low-tax state. Instead of the other way around, working for a long time in San Diego (or LA or SF), forking over tens, and quite possibly hundreds, of thousands of dollars in excess state taxes, fees, and skyhigh cost-of-living expenses during your prime earning years.

That's confusing. Only rich retirees will move to San Diego. Poor retirees move to Florida. Unless I have this wrong? Cost of living in Florida is way lower and no state taxes. But Florida has hurricanes, humidity, flatness, crocodiles, snakes, and a 1960s attitude. California and San Diego doesn't have those issues except for the high cost of living, occasional earth quakes, and cold water beaches. Honestly I can't decide which is risky. Hurricanes or earth quakes? But they had hurricane andrew recently but we have not had recent earth quakes.

But I get what you are saying. SD is where I will retire for sure or may be LA. Definitely at the top of my list. Save your money by living else where and then move to SD to enjoy. I didn't know SD had a huge retirement community. Does it? Bigger than Miami or Tampa?

[expatCA]

Originally Posted by Opt_10

That's confusing. Only rich retirees will move to San Diego. Poor retirees move to Florida. Unless I have this wrong? Cost of living in Florida is way lower and no state taxes. But Florida has hurricanes, humidity, flatness, crocodiles, snakes, and a 1960s attitude. California and San Diego doesn't have those issues except for the high cost of living, occasional earth quakes, and cold water beaches. Honestly I can't decide which is risky. Hurricanes or earth quakes? But they had hurricane andrew recently but we have not had recent earth quakes.

But I get what you are saying. SD is where I will retire for sure or may be LA. Definitely at the top of my list. Save your money by living else where and then move to SD to enjoy. I didn't know SD had a huge retirement community. Does it? Bigger than Miami or Tampa?

Maybe:

Aging and Independence Services

[someguy10]

I agree with US Default. Opt10, my opinion (and I suspect USD would agree) is that you work your prime earning time somewhere inexpensive where you can save (invest) as much money as possible. There are two components--both important--to how much you can save. The obvious is how much you can make. The other is what your mandatory expenses are and these include fees and taxes. San Diego is tough on both fronts -- i.e., you can make more for the same resume elsewhere and San Diego has much higher than average housing costs and literally the highest state income taxes of all 50.

The difference in what's available to save between San Diego and other nice lost-cost places to live is substantial. Over say 20-25 years of prime earning time, if you invested that difference in a simple 70/30 equity/bond type portfolio, your money would have tripled or more. Now you options. If things went well, maybe you have enough to move to CA, possibly paying cash for a place. Or maybe they went okay, so you can either retire now outside of CA, or work a few more years and then retire to CA.

Here's a quick and dirty example.

Assumptions:
-Married filing jointly couple
-Both work; $300K combined gross income
-Federal income tax expense: $70K/year (standard deduction)
-Housing in CA: $3000/mo; Housing in LCOL alternative: $1500/mo
-Living expenses (excluding housing and state income taxes): $75K/year
-Savings yields 6% real return per year

San Diego - Working
300K - 70K - 36K - 22K (CA state income tax) - 75K = 97K/year to save

LCOL - Working
300K - 70K - 18K - 0K (no state income tax) - 75K = 137K/year to save

At the end of 25 working years of the above, you would have an EXTRA $2,200,000 from the LCOL option. You could pay cash for a $600K CA house and the leftover $1.8mm would generate roughly $64K/year forever -- nearly enough to cover your $75K/year base expenses! Now check out the CA expense situation: you need $75K/year "income" for expenses. CA state income tax on $75K/year is $2K or $20K/year less than working in CA.

[1AngryTaxPayer]

Florida has more gators than crocs and the crocs are usually only found on the Southern tip and the keys.


Differences Between Crocodiles and Alligators


But they have a strain that is larger and meaner than the american croc, the nile croc has been found. It probably escaped during a hurricane.



We've made good money here in SD and will sell and buy something with cash in probably NC or a cabin in a colder state and spend winters here traveling in an RV.

[payutenyodagimas]

Originally Posted by someguy10

I agree with US Default. Opt10, my opinion (and I suspect USD would agree) is that you work your prime earning time somewhere inexpensive where you can save (invest) as much money as possible. There are two components--both important--to how much you can save. The obvious is how much you can make. The other is what your mandatory expenses are and these include fees and taxes. San Diego is tough on both fronts -- i.e., you can make more for the same resume elsewhere and San Diego has much higher than average housing costs and literally the highest state income taxes of all 50.

The difference in what's available to save between San Diego and other nice lost-cost places to live is substantial. Over say 20-25 years of prime earning time, if you invested that difference in a simple 70/30 equity/bond type portfolio, your money would have tripled or more. Now you options. If things went well, maybe you have enough to move to CA, possibly paying cash for a place. Or maybe they went okay, so you can either retire now outside of CA, or work a few more years and then retire to CA.

Here's a quick and dirty example.

Assumptions:
-Married filing jointly couple
-Both work; $300K combined gross income
-Federal income tax expense: $70K/year (standard deduction)
-Housing in CA: $3000/mo; Housing in LCOL alternative: $1500/mo
-Living expenses (excluding housing and state income taxes): $75K/year
-Savings yields 6% real return per year

San Diego - Working
300K - 70K - 36K - 22K (CA state income tax) - 75K = 97K/year to save

LCOL - Working
300K - 70K - 18K - 0K (no state income tax) - 75K = 137K/year to save

At the end of 25 working years of the above, you would have an EXTRA $2,200,000 from the LCOL option. You could pay cash for a $600K CA house and the leftover $1.8mm would generate roughly $64K/year forever -- nearly enough to cover your $75K/year base expenses! Now check out the CA expense situation: you need $75K/year "income" for expenses. CA state income tax on $75K/year is $2K or $20K/year less than working in CA.

good on paper but the reality is, when Californians moved to other states to cash in on their over inflated houses, they pay cash on their new homes with plenty to spare to buy new toys. don't know if a Texan can cash in his savings and buy cash a new house when he decide to move to Boise

[elchevere]

I made my money working for a bellwether tech firm living in OC and SD for 33.5 years. I could have very easily afforded to stay in SD but have opted for Miami for the lifestyle. I also have an offer in on an $850K luxury building on the water with killer amenities that would have cost $1.25M in SD ($1.8M in Santa Monica) and been 20% smaller.

[payutenyodagimas]

Originally Posted by elchevere

I made my money working for a bellwether tech firm living in OC and SD for 33.5 years. I could have very easily afforded to stay in SD but have opted for Miami for the lifestyle. I also have an offer in on an $850K luxury building on the water with killer amenities that would have cost $1.25M in SD ($1.8M in Santa Monica) and been 20% smaller.

could you have made your wealth if you had lived in FL or Idaho or Texas instead of SoCal?