Originally Posted by Archimedes

Anecdotal and market timing luck. I bought in 1999, sold in 2016. Got a ridiculous price for a small house in a very good neighborhood. My 17 year compounded return on investment, giving consideration to the remodeling costs on the house, was just over 5 percent. Worse than if I had put the money in the market and rented. This is not atypical of the Bay Area. Over the long term, there is a return, but it's not like buying Apple years ago. Oh, and in California, the gain on your house is taxed as ordinary income, not at a reduced capital gains rate. California has no State capital gains tax rates.

Sure you can get lucky out here and happen to time the market perfectly, but it's no different than market timing with equities. Mostly luck. Over the long term real estate rises and falls significantly here, and the long term trend line is not a hockey stick. And given how dramatic the down trends can be and how extended they can last, I tell anyone buying here, you need to have enough wealth to be able to stay in your house for five years even if things go south, or you risk having to sell into a downturn and getting killed.

When I bought our current house last year, I went in assuming that 1/3rd of the value could easily disappear in the next 2-10 years.

Originally Posted by MerlinRS

This is turning into my favourite thread! I live in the Swiss mountains and am very grateful for all the perks we have here such as free education, high wages, high security, clean air, great roads and low taxes. With that being said, I'm very, very tempted to move the the USA once I finish university, as it would allow me to start my career with no debt and starting capital available. I feel that the American business culture is yet on another level and the vibes you get, especially in Arizona / California, are incredible. Also, we don't have proper cheerleaders here in Switzerland!! Then again, you guys don't have factory roll cages in your RS cars which is an equal pity!

I am going to try to do an exchange semester in the US in two years to gauge quality of life in the US. My family, girlfriend and friends are all living in Switzerland, plus my education is in finance, so I have a much better understanding of Swiss finance & taxation whereas in the US it seems to be much different. I quickly opened a tax calculator and saw that, if you earned 250'000$ in Arizona, (assuming single, no 401k / IRA contributions), your total tax rate would be around 33% (80'900$). Is this correct? In Switzerland, it would be between 20% and 25%, if you live in a good region. How much can you generally deduct from your yearly gross income in the US?

In school, we had an interesting comparison of median and average wealth per adult: In Switzerland, average wealth is 530'000$ per adult, in the USA it's 404'000$. Median wealth in Switzerland is at 183'000$, whereas in the USA it's at just 61'000$!

Factoring in COL differences, Switzerland's average purchasing power is still slightly above the US. However, it seems that the hard- and smart working ones are rewarded exponentially in the US, whereas in Switzerland, it's a little more even. Is my understanding correct that in Switzerland it's "easier" to reach high net worth but "harder" to reach ultra high net worth? Then again, say if you make 200k in Arizona, a lot is left over for a GT3 RS, whereas in California (or Switzerland) a lot would be lost due to higher COL.

I guess in the end it's about where your friends are and where one feels the happiest I'm very grateful for all the travelling opportunities we have in this day and age. Love the American culture.

Drive safely!

Originally Posted by ipse dixit

I love CA, especially Southern CA.

So for all those who have issues with CA, not going to argue with you. But please feel free to stay away. Permanently.

Originally Posted by Spyerx

Originally Posted by rodsky

Lol! Lord knows we dont need more people and more traffic.

There are days like today when i flew back into LAX from SFO and the ****ty traffic and poor roads and the LAX construction (roads have potholes from all the rain we just had), will drive you insane. Even though its only 30 minutes home. And then i go why am i f'ing here. I dont have patience for all of that. But thats the bad that you have to take. In 2-3 days we will have sunshine and 70+ degree weather for as many days out as my iphone reads. And lovely cool evenings. However, then there are the eye watering bills for private school and all the school cheating scandals because people are trying to keep up with the Jones. And then there are the great golf courses and year round playing. And the beach, ocean views. and then there are the high taxes. so back and forth we go. Good and bad. Nowhere is perfect. Tomorrow i go to work in Santa Monica - really enjoy it - young, energetic, vibrant, people - going for it. Fun tech environment - for sure. You can do well here, but You have to pay to play - and you get f'ed on taxes. You gotta take the good with the bad. You gotta like crowds - except on holidays when they leave and then LA is perfect. And at 6am on weekends - when everyone is sleeping. Get in the car and drive or go to the golf course.

Originally Posted by phow

My wife and I were discussing this thread yesterday and the way we see it is that you have to find a balance that YOU are happy with no matter where you live.

If you move somewhere that is too expensive for you to properly enjoy, you will likely have a poor experience. However, if you only consider cost of living, you will likely end up some where you hate even more.

We could move to Alabama and live like saudi royalty but we would also have a terrible quality of life. You have to draw the line somewhere. CA offers the best balance between what makes us happy and what we can comfortably afford without sacrificing how we like to live our lives. Everyone needs to find that balance for themselves.