When you click on links to various merchants on this site and make a purchase, this can result in this site earning a commission. Affiliate programs and affiliations include, but are not limited to, the eBay Partner Network.
My general (and developing) thoughts on this subject after living and traveling in Europe and USA (almost evenly split)...
No better places than NYC/SF/LA to make the money, but that doesn't necessarily make them the best places to spend, enjoy, or manage them. The opportunity, grind, hustle, pretense, and elbowing there is second to none, but those get tiring after a while so, to me, staying there is only worth it if it comes with high enough rate of wealth accumulation (after costs and taxes). Not worth it if just treading water, paycheck to paycheck, regardless of income.
There are only a handful of places on the planet with a mild Mediterranean climate like in southern CA. One of them is the actual Mediterranean. Depending on personal preferences, plenty of small towns/villages or bigger cities (like Valencia or Barcelona) with CA weather, much warmer sea, more easy-going people, at a fraction of the CA cost and hustle.
Another thing to consider, as the US is becoming as regulated and as socialist as Europe with the size of its govt budget (as % of GDP). It becomes important whether or not a big chunk of that budget is spent on bombing random brown people half way across the world or other similar extravagances. The socialists not bombing others have much more money available to spend on services for their taxpayers, and judging from the deteriorating US infrastructure (airports, roads, etc.) this difference becomes increasingly obvious for anyone traveling in/out of the USA.
Just my $0.02
Interesting data. To compare these places we need to look at a lot more variables. For example, when we compare Hong Kong with Los Angeles, we have to consider all costs, not just housing. A big one, and a huge difference between the two, would be healthcare costs. My wife and I spend $1200 per month for healthcare. What is the cost of healthcare in Hong Kong? What about car insurance? Do you even need a car in Hong Kong? In Los Angles it is a must. Home insurance? Property taxes? State and federal income taxes? You also have to compare like to like properties, locations, etc. So equalizing all of these variables and tons of other variables (life expectancy, safety, weather, etc.) need to be evaluated to figure out which place might be best. It is also so individual driven.
You could live in one place, where pretty much everyone lives in 1 or 2 bedroom 600 sqft condos, make way less, yet you are so much happier because the pressure to get ahead is minimal, and the work life balance is totally skewed toward life. In another place you could be working your *** off, stuck in traffic all the time, yet you are making more and live in a much better home. Are you "happier?"
Interesting data. To compare these places we need to look at a lot more variables. For example, when we compare Hong Kong with Los Angeles, we have to consider all costs, not just housing. A big one, and a huge difference between the two, would be healthcare costs. My wife and I spend $1200 per month for healthcare. What is the cost of healthcare in Hong Kong? What about car insurance? Do you even need a car in Hong Kong? In Los Angles it is a must. Home insurance? Property taxes? State and federal income taxes? You also have to compare like to like properties, locations, etc. So equalizing all of these variables and tons of other variables (life expectancy, safety, weather, etc.) need to be evaluated to figure out which place might be best. It is also so individual driven.
You could live in one place, where pretty much everyone lives in 1 or 2 bedroom 600 sqft condos, make way less, yet you are so much happier because the pressure to get ahead is minimal, and the work life balance is totally skewed toward life. In another place you could be working your *** off, stuck in traffic all the time, yet you are making more and live in a much better home. Are you "happier?"
It is complicated. That is what I am saying.
That's probably true with any type of data or graph to look at. Though with Hong Kong, from what I have heard and or seen, their definitely is not any type of work life balance. They are workaholics....... over there.
Ask him why he's here if life is so great in another country. I never get any responses when I ask people that and tell them that there are plenty of Americans who would love their job if they were to leave.
Here's a valid answer (and whether it's correct or not is a different debate): when Americans see a chance to make our own country better, we work for change here, instead of trying to subvert the process or running away to some other country.
Nationalism: "My country, right or wrong."
Patriotism: "My country can do better."
Trouble is, there will never be a consensus on what if anything should be done to "make the country better."
Here's a valid answer (and whether it's correct or not is a different debate): when Americans see a chance to make our own country better, we work for change here, instead of trying to subvert the process or running away to some other country.
Nationalism: "My country, right or wrong."
Patriotism: "My country can do better."
Trouble is, there will never be a consensus on what if anything should be done to "make the country better."
I was specifically talking about that guy who said something about how great it would be if California turned into Singapore, without realizing what makes Singapore, Singapore, is the Singaporeans, not policy. I would never want to live in a place like that either but if he thought it was so great there why is he here? Go buzz off to Singapore from whence he came then. The US isn't a cow that the whole world gets to milk with impunity.
..........No better places than NYC/SF/LA to make the money, but that doesn't necessarily make them the best places to spend, enjoy, or manage them. The opportunity, grind, hustle, pretense, and elbowing there is second to none, but those get tiring after a while so, to me, staying there is only worth it if it comes with high enough rate of wealth accumulation (after costs and taxes)........
Agreed. Each year the CA legislature ramps up the existing, and adds new taxes, fees, and costs (when was the last time they reduced anything?), and of course the 2018 Federal tax law effectively means that top CA earners are paying +/- 50% of their income in state and federal income taxes, so.....rate of wealth accumulation.....not what is used to be.
Originally Posted by hf1
..........There are only a handful of places on the planet with a mild Mediterranean climate like in southern CA. One of them is the actual Mediterranean. Depending on personal preferences, plenty of small towns/villages or bigger cities (like Valencia or Barcelona) with CA weather, much warmer sea, more easy-going people, at a fraction of the CA cost and hustle.....
Mediterranean / CA climate not the end all be all. Many people prefer healthy green forests and actual fertile soil as opposed to brown dusty dirt with single digit humidity, santa ana winds and bigger mega fires every year.
We are left with nice views of the ocean (past all the desiccated brush) and grind, hustle, pretense, and elbowing.
There are only a handful of places on the planet with a mild Mediterranean climate like in southern CA. One of them is the actual Mediterranean. Depending on personal preferences, plenty of small towns/villages or bigger cities (like Valencia or Barcelona) with CA weather, much warmer sea, more easy-going people, at a fraction of the CA cost and hustle.
I LOVE Costa Blanca and Costa Daurada!
And you're right, as a lifelong SoCal resident, it's the only place in the world that has weather similar to ours. If I didn't have a hairbrained idea to start a family in my early 50s, I would've probably bought a place there, either south of Tarragona or Girona. Lazy days, sangrias and paellas.
In the 90s I remember hearing about people leaving California, and my first thought was that they left because they couldn't make it. I think this is a very common perception. But the more you live and learn, the more you realize that there are other reasons why people leave a place like California. In our case, we owned our home 2 miles from the ocean, owned a good business, and really had no financial pressures to leave. A big part of it was because we felt that our daughter was on the fast track to junior college, as she was unable to get AP courses in HS. I guess we all think our kids are special, but we really felt like she was being held back in California. Evidently Google agreed. So leaving was much more about the lack of opportunity than anything else.
If we were to move back, which we can afford to do, the decision would be a lot harder. If you are thinking about this move, consider the following:
1. A decent home in a decent area is going to cost you over $1 million. If you want a nice home in a nice area, plan on $1.5 to $2 million minimum. And that $1.5 million dollar home is not going to be anything to write home about. These are going to be places within a few miles of the ocean. I don't see any reason to live further away than that, because it is too hot and boring.
2. Property taxes on a place like that are going to run you $15k to $20k per year, if not more. Your ability to deduct those taxes on your federal return is going to be severely limited. See below.
3. You can only deduct the interest on the first $750k, so if you get a loan above that the interest in not deductible on your federal return.
4. To afford a place like that you better be making over $250k. The state is going to hammer you to the tune of about 13.3% state income tax, the highest in the nation. But it is graduated, so on $250k maybe you are paying 10%. If you make over $1 million add another 1%.
5. On your Federal return you can only deduct a maximum of $10k on state and local taxes. So assuming the situation above, you are going to have at least $20k in state income taxes, plus $20k in property taxes. Of the $40k, only $10k is deductible. Plus the mortgage interest on that loan is partially non-deductible. The bottom line is your tax bill is most-likely going way up, unless you are coming from NYC.
6. Next, you are going to have to send your kids to private school unless you live in a really good area. Plan on another $20k to $60k per year per student, starting in elementary school. This only gets worse as you get to High School. You will need suitcases of unmarked bills to get into an elite university.
7. Speaking of that, you now know the games that have been played in California regarding higher education. I read that 4,000 applicants with perfect SATs and 4.0+ GPAs were turned away from Stanford last year alone. So if you are planning on your bright kid getting into one of the top schools, good luck with that.
8. If for some crazy reason you have to commute to work, and you don't live within a few miles, god help you. Los Angeles has the world's worst traffic 6 years in a row. How bad is it? Your blood pressure is going to go up considerably. You could be nicer than the Pope, but you are going to learn about your darker side after spending 2 hours in your car. Make sure you have a really good car too, because you are going to be living in it. The last time we visited northern California it took us 4 1/2 hours to go the equivalent of a 1 hour drive. The good news is traffic is pretty light at 3am most of the time.
9. I hope your Spanish is good, because more people are fluent in Spanish than English in the state. In 1980 when I moved to California the non-Hispanic white population was 80%. Today it is 38% and dropping like a rock. You have lots of choices for Mexican food though.
10. A recent study found that the top 1% of taxpayers in California pay 50% of the taxes. If you are one of the 1% don't expect any sympathy from the other 99% of voters, many who illegally immigrated from south of the border. Of particular concern is something called Prop 13. This proposition limits the amount your property tax can go up each year, and it has created a real distortion. On the same street some people pay a few hundred in property taxes while others pay over $10k. As California's financial situation deteriorates (see below) the money is going to have to come from somewhere. Raising property taxes is going to be an obvious target. Now you might think that they would raise the taxes on people paying hundreds and cut the taxes on people paying $10k, but that isn't how California works.
11. California is extremely mismanaged, financially. How mismanaged is the worlds 5th largest economy? According to a January 2017 study, California state and local governments owe $1.3 trillion as of June 30, 2015. On top of that the Bay Area Council Economic Institute pegs the cost of California's unfunded infrastructure needs at up to $737 billion. Why does this $2 trillion matter? Well, with the top 1% paying half the taxes, money will need to be raised to pay for these obligations, and the 1% are the ones with money and very little political power. With so many poor people coming to California from socialist countries south of the border, their attitude is to take from the rich to give to the poor. And yes, even illegals can vote in California. If you belong to the 1%, you officially have a target on your back.
12. The state is prone to earthquakes. In the 30 years that I lived there we had a few big ones, but overall I would say it is an overblown concern. It shakes for a while, but I would personally rather deal with an occasional earthquake than annual hurricanes. But if you are going to sink $1.5 to $2 million into real estate in the golden state, understand that earthquake insurance is brutally expensive. In fact, unless the fault line runs right under your house the chances of you getting any payback from that earthquake policy are slim and none.
13. The weather is really good. The women are even better.
You might think I am joking, and this post is nothing but an exaggeration. So yes, California has some positives. And it has a cool factor to it. All the big tech companies are there, and it has entertainment to boot. But a lot of people find some of the above reasons too much to handle, and that is why they leave. It isn't because they cannot make it. They simply decide that living in a place like California is just not worth it. It is all personal choice. Hey, if you can deal with the above and are happy, more power to you.
So, after all this time, I have to wonder what cbrett has decided to do? Did we scare you off of California or are you still looking? Maybe still holding off on trying to catch that falling knife that is the current state of the CA high end real estate market?
12. The state is prone to earthquakes. In the 30 years that I lived there we had a few big ones, but overall I would say it is an overblown concern. It shakes for a while, but I would personally rather deal with an occasional earthquake than annual hurricanes. But if you are going to sink $1.5 to $2 million into real estate in the golden state, understand that earthquake insurance is brutally expensive. In fact, unless the fault line runs right under your house the chances of you getting any payback from that earthquake policy are slim and none.
I would rather deal with a natural disaster that can be predicted and evacuated.
Just escaped SoCal after 22 years, split between San Diego and all over the la area.
It’s a great place to consider, if you’re already extremely wealthy and don’t need to drive anywhere M-F.
if youre any kind of middle class, *NOTHING* about southern California is worth the expense and aggravation. Bay Area is even worse.
central coast or north of Sacramento are good places, still pricey but much more tame than the metropolises...but you had better already be retired or work remotely because there’s no work in those places.
Just escaped SoCal after 22 years, split between San Diego and all over the la area.
It’s a great place to consider, if you’re already extremely wealthy and don’t need to drive anywhere M-F.
if youre any kind of middle class, *NOTHING* about southern California is worth the expense and aggravation. Bay Area is even worse.
central coast or north of Sacramento are good places, still pricey but much more tame than the metropolises...but you had better already be retired or work remotely because there’s no work in those places.
So true. My exit plan is within the next 5-7 years. Will keep property here but live elsewhere, like Hawaii.
05-31-2019, 02:37 PM
So yes, California has some positives. And it has a cool factor to it. All the big tech companies are there, and it has entertainment to boot. But a lot of people find some of the above reasons too much to handle, and that is why they leave. It isn't because they cannot make it. They simply decide that living in a place like California is just not worth it. It is all personal choice. Hey, if you can deal with the above and are happy, more power to you.
