Expensive_cities_pre_auphonic
00:00:00.000 | Hello everybody, it's Sam and Sidney from the Financial Samurai podcast.
00:00:12.120 | And in this episode, we want to talk about how the most expensive cities in America could
00:00:17.720 | actually be the cheapest.
00:00:19.840 | And frankly, the most expensive cities in the world could actually be the cheapest in
00:00:23.720 | the world.
00:00:24.720 | So, what the heck are we talking about?
00:00:26.960 | Well, Zillow came out with an interesting study that highlighted the top 50 cities in
00:00:34.080 | America and how much money you need to make to afford the "typical" house.
00:00:40.100 | We'll say typical house is the median house price.
00:00:44.440 | And at number one, at number one, can you all guess what city that is?
00:00:49.560 | Do you know, Sidney?
00:00:50.800 | I know because I saw the chart, but if I hadn't peeked at it yet, my guess would be New York
00:00:56.680 | City.
00:00:57.680 | That would be my first guess.
00:00:58.680 | Right.
00:00:59.680 | So, argh, you are wrong.
00:01:01.000 | New York City is not the metro or the city that requires the highest income.
00:01:06.600 | New York City comes in at one, two, three, four, five, six.
00:01:11.040 | Number six on the list of 50 requiring an income of $213,615.
00:01:18.040 | Number one on the list out of all the 50 is San Jose, California.
00:01:24.800 | What do you think about that?
00:01:26.120 | I would not have guessed that.
00:01:27.120 | I know the Bay Area is expensive, but I would have picked San Francisco above San Jose.
00:01:32.080 | I was quite shocked to see such a difference in the pricing.
00:01:35.640 | Well, San Jose, you know, the Bay Area, it's home to Cupertino, Apple, Netflix, Meta, YouTube,
00:01:44.440 | Google.
00:01:45.440 | So, San Jose, yes, I can see how it's expensive, but I've always thought San Jose and San Francisco
00:01:51.840 | were almost like neck and neck, you know, plus or minus $20,000 in terms of income required
00:01:57.680 | to afford the typical home price.
00:01:59.680 | And just to recap, Zillow's analysis assumes only a 10% down payment, and it uses the "Zillow
00:02:06.160 | Home Value Index" to account for each market's "typical home price."
00:02:11.240 | But with San Jose at $454,296, the income required to afford a typical home, that is
00:02:21.040 | a lot, $454,000, because at number two is San Francisco, our hometown, at only $339,864.
00:02:30.320 | That's a huge spread.
00:02:33.480 | That's a huge spread.
00:02:35.200 | We're talking $126,000 more to live in San Jose, which is about 15 minutes to an hour
00:02:42.040 | south of San Francisco.
00:02:45.040 | That's a lot, and that actually makes me quite happy.
00:02:48.720 | You know why?
00:02:49.720 | Why?
00:02:50.720 | Because San Francisco is way better than San Jose, and sorry for folks listening from
00:02:55.600 | San Jose.
00:02:56.600 | But come on now.
00:02:57.600 | I mean, the reason why San Francisco is an international city and the reason why people
00:03:02.640 | come from all over the world to Northern California is to come to San Francisco.
00:03:07.400 | They don't say, "I got to go to San Jose," right?
00:03:10.360 | Let's be honest here.
00:03:11.360 | I would agree with that.
00:03:12.360 | Yeah.
00:03:13.360 | And I've been to San Jose many, many, many times before.
00:03:16.960 | It's warmer.
00:03:18.480 | It's nice.
00:03:19.480 | It's clean.
00:03:20.480 | It's kind of boring if you're in your 20s or 30s.
00:03:25.200 | What do you think?
00:03:26.200 | I haven't spent enough time down there, but just of what I've seen and heard, I would
00:03:31.560 | agree with you that San Francisco is a more exciting place to live and hang out.
00:03:36.520 | Yeah.
00:03:37.520 | So here's an interesting anecdote.
00:03:39.940 | So our old house finally got tenants, and the four tenants all come from the San Jose,
00:03:47.240 | Palo Alto, Cupertino area.
00:03:49.960 | And they're all in their 20s.
00:03:51.120 | And I asked them, "So why are you all moving up here?"
00:03:53.680 | And they said, "Because it's really boring down there, and they want to experience the
00:03:57.960 | big city living and life."
00:04:00.720 | I think a lot of the big tech companies have seen this as well, which is why a lot of them
00:04:05.600 | were opening offices in San Francisco, pre-pandemic at least, because a lot of their employees
00:04:11.760 | wanted to stay up in the city.
00:04:14.000 | Yeah, absolutely.
00:04:15.400 | So now a lot of, well, our tenants are reverse commuting.
00:04:18.800 | They're going an hour south by one of those tech buses, and one is going to Stanford University
00:04:24.240 | for her PhD.
00:04:25.600 | And so, yeah, the proof is in the pudding.
00:04:31.000 | We've literally got tenants who are doing this reverse commute.
00:04:35.000 | And so a lot of people have made fun of my post in the past called, "Why Households Need
00:04:40.840 | to Earn $300,000 a Year to Live a Middle-Class Lifestyle in an Expensive City."
00:04:46.640 | If you look over at that post, you'll see tons and tons of comments saying how I'm out
00:04:51.560 | of touch with reality, I don't know what I'm talking about, how their reality is more real
00:04:57.800 | than my reality.
00:04:59.440 | So guess what, folks?
00:05:01.200 | It's really nice to see some external validation from Zillow and other think tanks out there
00:05:07.320 | saying, "Hey, well, San Francisco, $339,864 to afford a typical home, and I've been saying
00:05:14.600 | $300,000, so I think the numbers are justified."
00:05:20.360 | Do you find that number shocking, $339,000 in San Francisco city?
00:05:24.800 | I don't find it that shocking just because, I mean, I felt that the city has been expensive
00:05:30.200 | for a very, very long time.
00:05:32.760 | The biggest shock to me was what you've already mentioned, that San Jose came in first at
00:05:37.000 | such a huge spread above San Francisco.
00:05:39.880 | Yeah, and here's an interesting thing, because before San Francisco, I was living in Manhattan,
00:05:46.720 | and you got to differentiate between New York City and Manhattan, because Manhattan is like
00:05:50.720 | 30 to 50% more expensive than San Francisco.
00:05:55.520 | New York, again, it's only number six on the list.
00:05:58.560 | Let me just read the top 10 cities and the income required.
00:06:02.680 | So San Jose, $454,000, San Francisco, $339,000, Los Angeles at number three, $279,000, San
00:06:11.640 | Diego, $273,000, Seattle, $213,000, New York, $213,000, Boston, $205,000, Riverside, California,
00:06:22.680 | $173,000, and then Denver, Colorado, $172,000.
00:06:27.040 | Oh, and then surprisingly, Sacramento, $172,000, followed by Washington, D.C., at $166,000.
00:06:35.120 | So click over to the post.
00:06:36.120 | You can see the chart.
00:06:37.500 | It shows the top 50 city metro areas.
00:06:41.200 | And actually, the other surprise is Sacramento, rounding up, what, number 10 or so at $172,000,
00:06:47.880 | because for folks who live in San Francisco and San Jose, Sacramento is dirt cheap in
00:06:54.000 | comparison.
00:06:55.680 | So what are some of the things these cities have in common, besides requiring a high income
00:07:01.520 | to afford a typical home?
00:07:02.880 | What I see is weather.
00:07:06.460 | Weather looks much nicer in the majority of the cities, except for maybe New York, Boston.
00:07:15.840 | Sacramento gets really, really hot during the summer, and then Washington, D.C.
00:07:19.680 | Any kind of commonalities you see, Sydney?
00:07:21.760 | Nothing comes to mind.
00:07:22.760 | I agree with what you've said so far.
00:07:24.240 | Well, here's another commonality.
00:07:26.080 | The majority of these cities are all on the West Coast, and I have made an argument in
00:07:31.920 | the past to the gurr of people on the East Coast that the West Coast is a better lifestyle
00:07:39.440 | to live than the East Coast.
00:07:40.440 | Now, I know, come on, y'all on the East Coast are like, "Come on, give me a break, West
00:07:44.040 | Coast.
00:07:45.040 | It's terrible.
00:07:46.040 | It's crappy."
00:07:47.040 | But I've lived on the East Coast for 10 years.
00:07:49.520 | New York City and Virginia, Northern Virginia.
00:07:53.360 | And then I've lived in San Francisco since 2001.
00:07:58.980 | So I have a pretty balanced outlook here, and I feel that once I was able to go snowboarding
00:08:05.920 | in like two feet of powder on a Saturday and come back and play tennis with my shirt off
00:08:10.120 | in 70-degree weather on a Sunday, I was sold.
00:08:14.200 | And I felt that being able to enjoy the outdoors, the quality of life year-round, 12 months
00:08:19.360 | a year, was valuable, and as I get older, and time has become more precious because
00:08:24.960 | I have less of it, being able to spend 12 months outdoors and enjoy the city is more
00:08:32.280 | worthwhile than, let's say, sacrificing three to four months of really, really cold winters
00:08:39.000 | or extremely hot and muggy summers.
00:08:42.000 | You know, Chicago.
00:08:43.880 | Chicago is one of the best value cities in America.
00:08:48.640 | It's a huge city, and it is cheaper.
00:08:52.880 | It requires a lower income to afford a typical home than the national medium of $106,000.
00:08:59.640 | So in Chicago, you only need $104,000.
00:09:03.760 | That's pretty good because there's a lot of opportunity in Chicago, but I just can't
00:09:07.800 | do the three months of really cold winter.
00:09:11.300 | So what are your thoughts on weather, Sydney, and how much of an impact it has on quality
00:09:17.040 | of life?
00:09:18.040 | Well, I think weather does have a significant impact because if you look at the quality
00:09:21.720 | of life in places that are sunny, where people want to be outdoors, lifestyle is generally
00:09:28.720 | more balanced and people are happier.
00:09:31.040 | Yeah, there's an interesting study about what makes people happy, and there are three
00:09:35.920 | components.
00:09:37.720 | One was the weather, warmer weather, right?
00:09:41.920 | Two was friends and family, and three is just more activity.
00:09:47.520 | So if you combine those three items, you know, places like California, several cities in
00:09:52.640 | California, Denver, Colorado is also really nice.
00:09:55.640 | However, it gets really, really dry in Denver and Colorado Springs sometimes, and the cost
00:10:02.240 | of living in Denver is also quite high.
00:10:06.040 | It's about, looks like it requires $172,000 in income to afford the typical home.
00:10:12.560 | But weather is a big one, which is why I regret not moving to Honolulu, Hawaii pre-pandemic.
00:10:19.840 | We have been looking at homes in the area three consecutive years.
00:10:23.660 | You remember all those open houses we saw one or two blocks away from the beach, and
00:10:29.680 | they were awesome.
00:10:31.320 | They were truly awesome.
00:10:33.040 | And since we left, well, my day job in 2012 and your day job in 2015, we've been thinking
00:10:38.760 | about relocating to Hawaii, but why do you think we never moved?
00:10:43.600 | And do you have regrets that we did not move?
00:10:45.240 | I don't have regrets about it.
00:10:46.600 | I think moving has its challenges, and I think we were happy with our life here.
00:10:52.120 | We have, you know, networks established here, and I feel like we enjoy our freedom here
00:10:58.360 | as well.
00:10:59.360 | We are close enough to our parents, for example, we're not so close that we get bombarded with
00:11:07.240 | too much family stress, to be frank.
00:11:09.880 | I think that's one thought that we had.
00:11:12.240 | Out of curiosity, does Honolulu show up on your list from Zillow?
00:11:17.240 | Well, it's interesting.
00:11:18.240 | I was looking for Honolulu, and it doesn't show up on the list.
00:11:22.000 | So obviously, that's a huge oversight by Zillow.
00:11:25.160 | But if it did show up on the list, I would put the required income to afford a typical
00:11:30.240 | home in Hawaii.
00:11:31.600 | The median home price depends on who you ask.
00:11:33.920 | Zillow, it's like $780,000.
00:11:36.280 | According to another report, it's about $1.1 million, which sounds more about right based
00:11:42.080 | on all the homes that we've been looking at, and not just our homes.
00:11:44.680 | I mean, I'm talking to realtors locally on the ground and seeing what's out there.
00:11:49.160 | I would say it requires about $250,000 plus to afford a typical home in Honolulu, Hawaii,
00:11:59.920 | and raise a family of up to four, so two kids, relatively comfortably.
00:12:05.840 | So yeah, okay, folks in Honolulu, don't bash me.
00:12:10.720 | But we're looking basically objectively at the cost of homes, and mortgage rates, and
00:12:17.560 | the cost of living, and anybody who's been to Honolulu knows that it's expensive.
00:12:22.760 | But Honolulu is less expensive than San Francisco.
00:12:28.320 | Homes are about, similar homes are about 30% less expensive, or you get about 30% more
00:12:33.720 | home.
00:12:35.520 | So relocating to Honolulu, Hawaii would have saved us money.
00:12:39.200 | Isn't that funny?
00:12:40.480 | And so I do have regret not moving before the pandemic, because I heard Hawaii was amazing
00:12:47.240 | during the pandemic, because flights were really not allowed in, or people were encouraged
00:12:53.280 | not to come unless it was for like an emergency, right?
00:12:57.120 | So you'd have the islands to yourself, the beaches to yourself, less crowds, less traffic.
00:13:04.320 | But of course, the problem with Honolulu is that the number one industry in Hawaii is
00:13:09.080 | tourism.
00:13:10.080 | So when you cut off visitors to Hawaii, then you cut off income, and it makes it much more
00:13:16.280 | difficult for businesses to make a profit and pay their employees.
00:13:20.520 | So I do have regrets because the time to move to Hawaii was during the pandemic, and we
00:13:26.080 | just couldn't do it because we had our baby daughter, and we weren't about to move and
00:13:32.760 | change doctors and change environments after having a baby.
00:13:37.640 | And now that we have moved within San Francisco, do you see yourself staying here for another
00:13:45.040 | 10 years?
00:13:46.040 | See us all staying here?
00:13:47.040 | Well, we better, because I definitely don't want to be moving for a while after we spent
00:13:52.960 | so much money on this house.
00:13:54.460 | Ha ha ha, I have you recorded saying that now.
00:13:58.120 | I will put this in my files.
00:14:01.200 | Well, I guarantee you that I don't want to move, and I'm going to do my darndest not
00:14:08.040 | to move for at least eight years.
00:14:10.800 | And eight years, why that is because that's when our son will be 14, 14 and a half, and
00:14:18.080 | be eligible for the ninth grade.
00:14:20.760 | And his current school only goes through the eighth grade, so we have to reapply for high
00:14:24.520 | school.
00:14:25.680 | And so when we reapply for high school, I think that is the time when we apply to schools
00:14:30.880 | in Honolulu, Hawaii, because God willing, I hope my parents will still be around.
00:14:36.800 | And I think that's a perfect time, because I'll be in my 50s, right, ooh, 53, and you'll
00:14:43.400 | have just turned 50, so we're getting up there.
00:14:47.160 | And so...
00:14:48.160 | I won't be 50.
00:14:49.160 | What are you talking about?
00:14:50.160 | Okay.
00:14:51.160 | Okay, you'll be...
00:14:52.160 | 38.
00:14:53.160 | Either way, we're going to get older, and I think it's good to move to states and cities
00:14:58.040 | that are matching of your stage in life.
00:15:02.280 | And so for Honolulu, Hawaii, I think it's a little bit too early to try to make your
00:15:06.160 | fortune in your 20s and 30s there, because income is about 30 to 60 to 70% lower compared
00:15:13.720 | to the mainland.
00:15:15.680 | But in our 50s, I am pretty sure in our 50s, we're going to enjoy living in Honolulu, Hawaii.
00:15:22.200 | What do you think?
00:15:23.200 | I think so.
00:15:24.200 | It's obviously a much slower pace of life, and I think by that time, we'll be more welcoming
00:15:31.840 | of that, and it'll be a great goal to have.
00:15:36.120 | And I'm glad it's not so soon after we made this big move.
00:15:39.880 | I mean, ideally, how long would you like to live in our current house?
00:15:43.320 | I wouldn't put a date on it.
00:15:45.400 | I just don't...
00:15:46.640 | I want it to be so far in the future that I don't even have to think about moving.
00:15:51.160 | Okay, well, eight years is going to come quicker than we think, I think, because every single
00:15:56.440 | parent I talk to says, "Wow, the kids grow up quick, days are long, the years are short.
00:16:01.600 | They're going to be out of the house before you know it."
00:16:03.720 | Yeah.
00:16:04.720 | So it might be harder.
00:16:05.720 | It still might be harder to move than we realize, because we will have even deeper roots here.
00:16:11.000 | But who knows?
00:16:12.000 | We'll see.
00:16:13.000 | We'll see.
00:16:14.000 | I guess at the very least, what we're going to do once our daughter is five, when she's
00:16:18.680 | really strong enough and sleeping well and can hold all of her memories or most of her
00:16:24.160 | memories is that we just spend one or two or three months in Honolulu, Hawaii.
00:16:29.880 | We do the summer camps there.
00:16:31.400 | I'm sure there's cool summer camps like boogie boarding camp or surfing camp or hiking camp.
00:16:36.600 | I mean, how cool would that be?
00:16:38.300 | Or learning about Polynesian culture, local Hawaiian culture.
00:16:42.080 | I mean, that's so important, at least for me, because I'm part Hawaiian.
00:16:48.160 | So that is a good opportunity to try before you buy.
00:16:51.480 | And I don't think we have to relocate there.
00:16:54.240 | But if we love it so much after many, many years of staying there for two, three months
00:16:58.080 | a year, I think it makes it easier.
00:17:00.200 | Right?
00:17:01.200 | It's just kind of like moving to our current home.
00:17:03.720 | We visited this home over 10 times, maybe 15, 20 times, actually probably more than
00:17:08.000 | 20 times over an 18-month period when we first saw it.
00:17:11.260 | And then so when we finally got here and we finally moved in, it felt like destiny.
00:17:16.200 | It felt totally fine.
00:17:19.400 | What do you think?
00:17:20.400 | Right, right.
00:17:21.400 | Yeah, no, I completely agree with that.
00:17:24.240 | And in terms of talking about cities and relocating way down the road, are there any other cities
00:17:31.960 | outside of Hawaii that you would consider?
00:17:35.200 | You know, I would consider Taipei, Taiwan to get really good at Mandarin.
00:17:41.520 | I used to live there for four years and it really helped with my Mandarin in terms of
00:17:45.080 | accent, in terms of speaking more fluently.
00:17:50.240 | Language immersion is the best when you're in that country.
00:17:53.860 | So Taipei, Taiwan is not the prettiest or cleanest city.
00:17:58.300 | It's kind of chaotic and it's very hot and humid during the summer, but it's also really
00:18:02.640 | friendly people and some of the best food in the world.
00:18:06.160 | So Taipei, Taiwan would probably be number one on my list.
00:18:09.520 | China, you know, I lived there for six months during college.
00:18:13.580 | It's probably completely changed since I last been back.
00:18:16.120 | Well, I was last back probably eight to ten years ago, but I don't have any roots there.
00:18:21.280 | What about in the US?
00:18:22.280 | In the US, I love San Diego.
00:18:25.640 | San Diego is kind of like Hawaii.
00:18:27.680 | It's great for if you're 50 plus, slower pace, warmer weather, 68 degrees all year round.
00:18:34.360 | But if I'm going to do San Diego, I might as well just go to Hawaii.
00:18:37.400 | I love Honolulu, Hawaii.
00:18:39.480 | I've been going back every year for 46 years.
00:18:42.680 | How about you?
00:18:43.680 | Moving within the US is definitely easier for me to think about than moving abroad.
00:18:49.620 | But I do like the idea of utilizing our kids' time off during the summer to travel abroad
00:18:58.020 | or just to a different part of the US and stay there for a longer duration while we
00:19:03.980 | work remotely.
00:19:04.980 | I think that would be fun.
00:19:06.700 | Something where we get to enjoy a new environment, but still have our home to come back to.
00:19:13.580 | I like that kind of blend.
00:19:15.940 | You don't want to permanently relocate somewhere.
00:19:18.220 | It's harder for me to mentally get over that hurdle.
00:19:21.700 | Yeah.
00:19:22.700 | Well, I'll make it get over it in the future.
00:19:26.220 | We'll see.
00:19:27.220 | We'll see.
00:19:28.220 | I still have you on record that we're staying here for a long time.
00:19:31.460 | Yeah.
00:19:32.460 | Eight years.
00:19:33.460 | Eight years.
00:19:34.460 | It sounds about right.
00:19:35.460 | Are you sure you didn't say 10?
00:19:36.460 | No.
00:19:37.460 | I said until high school.
00:19:38.460 | Yeah.
00:19:39.460 | But going back to actually the original point of this podcast, how expensive cities are
00:19:44.020 | actually the cheapest.
00:19:46.980 | It's all about the opportunities.
00:19:49.020 | Expensive cities are expensive for a reason.
00:19:51.060 | And that reason is more high-paying jobs, better growth opportunities for your career,
00:19:59.380 | and for maybe investment opportunities as well.
00:20:03.900 | So one of the reasons why I couldn't pull the trigger, I didn't feel like it was right
00:20:07.980 | to move to Hawaii was because the homes, yeah, are 30% or so cheaper, but that's still a
00:20:14.780 | lot of money, right?
00:20:15.780 | The median home price in Honolulu now is about $1.1 million.
00:20:18.580 | And for some reason, any home you want to buy seems to always be more than the median
00:20:23.020 | home price.
00:20:24.020 | So it's probably more like $2 million or $2.5 million or $3 million home in Hawaii.
00:20:30.660 | And that's still cheaper than San Francisco by, let's say, 500 grand to a million.
00:20:35.740 | But the problem is, and this is probably simply because I didn't feel we had enough money,
00:20:42.380 | and that is if we bought a home in Honolulu and we got into financial difficulty, some
00:20:48.420 | accident, some medical mishap, something wrong, there would be fewer, much fewer opportunities
00:20:56.660 | to earn income that paid as much as mainland income.
00:21:01.340 | And so this was pre-pandemic.
00:21:03.380 | Maybe it's easier now because there's more from home opportunities, telecommuting opportunities
00:21:09.020 | are more ubiquitous now.
00:21:11.060 | But back then, I just felt, "Oh, the best job I could get might pay like 50 to 60, 70,
00:21:18.300 | 80 grand, but if you own a very expensive home, that's not going to cut it."
00:21:23.500 | Whereas here in San Francisco, it's much easier to find full-time work that pays six figures,
00:21:29.020 | multiple six figures, or part-time consulting work that pays six figures.
00:21:33.740 | What are your thoughts on that logic?
00:21:35.580 | I can agree with you that big cities tend to have a lot more job opportunities.
00:21:40.740 | That doesn't mean they're less competitive.
00:21:42.580 | I would think they're more competitive.
00:21:44.940 | However, you have a greater chance to build larger and deeper networks in areas where
00:21:51.500 | there's more people, especially if your industry is focused on an area where there's a lot
00:21:57.380 | of people.
00:21:58.380 | Yeah.
00:21:59.380 | The network effects are huge in bigger cities.
00:22:02.460 | But you're right.
00:22:03.460 | You're absolutely right on the competition.
00:22:04.900 | I applied to every single tech job I could in 2012, Airbnb, I think Uber was just starting,
00:22:11.940 | Google, Facebook, Apple, didn't get anywhere because I just went through the online channels.
00:22:16.260 | I didn't have any connections, but now I have connections and I feel now I might be able
00:22:20.600 | to get a job at one of those places if I wanted one, maybe.
00:22:24.980 | But the network effect is huge.
00:22:28.140 | Just for example, next week, Ben Miller, the CEO of Fundrise, he's coming to town to visit
00:22:33.540 | San Francisco.
00:22:34.540 | He's got some business and we're going to go grab a beer.
00:22:37.420 | That's cool.
00:22:38.420 | Awesome.
00:22:39.420 | That builds a relationship.
00:22:40.420 | I've been speaking to him for years, but we've never met in person.
00:22:45.700 | Having these relationships helps in terms of business, in terms of job opportunities,
00:22:50.720 | consulting opportunities.
00:22:52.620 | I know a lot of people from my days consulting at Personal Capital, now Empower, a lot of
00:22:58.900 | VCs, a lot of business CEOs.
00:23:02.740 | It's really cool to be in a bigger city because of that.
00:23:06.140 | If you're a normal person, you're a helpful person, you're a thoughtful person, you can
00:23:10.240 | gain a lot more opportunities.
00:23:13.780 | That fear of losing all that and going to Honolulu where I don't have a deep network
00:23:18.620 | and not being able to earn income to support the expenses, to cover those expenses was
00:23:25.860 | pretty difficult.
00:23:27.660 | For those of you thinking about building wealth, focus, I would say, on opportunities in big
00:23:33.120 | expensive cities.
00:23:34.260 | They're expensive for a reason because the income opportunities are more.
00:23:39.380 | If you want, once you've built your wealth, you can always relocate to a lower cost area
00:23:43.900 | of the country.
00:23:46.100 | You might discover that you might have made enough or so much that you don't really need
00:23:51.120 | to move to a lower cost area of the country or the world to save money because the income
00:23:56.780 | upside is so much greater.
00:23:58.960 | That's my main point.
00:24:00.240 | It's like playing offense to build wealth because income is unlimited, the upside is
00:24:05.500 | unlimited versus playing defense by saving your way to wealth.
00:24:12.340 | You can only save so much.
00:24:13.340 | You can only cut your expenses.
00:24:14.780 | It's kind of like using 25 times your expenses to say that you're financially independent
00:24:18.940 | versus using 20 times your income.
00:24:22.660 | It's much harder to do 20 times your income, but it also keeps you more honest about saving
00:24:28.300 | and investing more money as your income grows versus with expenses, you can just slash it
00:24:32.740 | to ramen noodle budget prices and you can say, "Oh, I'm financially independent."
00:24:38.560 | It's a different way of thinking, but again, I am also biased because my entire post-college
00:24:43.180 | career has been living in the two most expensive cities in America, New York City and now San
00:24:50.340 | Francisco.
00:24:51.700 | Take my experience for what it is.
00:24:54.020 | If you're looking for more wealth building opportunities, I would say don't let the cost
00:24:58.660 | scare you off.
00:25:00.620 | Try it out.
00:25:01.620 | Come to a big expensive city for two, three years.
00:25:05.020 | See if you can get some opportunities.
00:25:06.780 | You can gain some momentum, build a network of friends.
00:25:09.900 | Who knows?
00:25:10.900 | You might be able to reach critical takeoff and if you don't, you can always go back.
00:25:16.260 | All right, everybody.
00:25:17.840 | That's it for this episode regarding living in expensive cities and how they could actually
00:25:22.340 | be cheaper because you could make a lot more money to afford all the things you want to
00:25:28.100 | buy.
00:25:29.260 | It's not like a Honda Accord is going to cost less in Pittsburgh, Pennsylvania versus San
00:25:35.500 | Francisco, California.
00:25:37.700 | The pricing is pretty much the same wherever you go in America.
00:25:41.180 | If you enjoyed this podcast, we'd appreciate a positive review.
00:25:45.140 | Your reviews and shares keep us going and if there are no reviews and no shares, it's
00:25:49.900 | cool too because we'll just chill and do other things.
00:25:52.980 | If you want to keep in touch, subscribe to the free Financial Samurai newsletter at FinancialSamurai.com.
00:25:59.180 | Take care.
00:26:00.180 | Bye.
00:26:01.180 | Bye.
00:26:02.180 | Bye.
00:26:02.180 | Bye.
00:26:03.680 | Bye.
00:26:04.680 | Bye.
00:26:06.680 | Bye.
00:26:07.680 | Bye.
00:26:08.680 | [BLANK_AUDIO]