Cost of living in a bigger city

[RikaKazak]

I stumbled across this and thought it was interesting:

http://www.freemoneyfinance.com/2006...ave_money.html

Basically, big cities cost more to live in then in small cities. But it's generally accepted that in big cities, you get paid more to do the same job so your standard of living is actually the same.

Well this author shows how it's sometimes true, and sometimes untrue. And he shows his math to "semi" provide proof. Interesting non the less imo

[WhiskeyFish]

Interesting article.

Unless I'm missing something, he really should have been comparing salaries on an after-tax basis. That would have made the expensive cities fair even worse, since high salaries are paying a higher overall tax rate. Also, NYC gouges you with its own taxes...I'm not sure about the others at the top of his list.

I think he's right that for people with ordinary jobs, you're way better off financially not living in one of the expensive cities. But if you're a big mover and shaker, it may be worth the extra expense to be around where all the money is.

Having lived in NYC, I can tell you that most people who make less than 75K and are 30 years old or over live somewhere outside where the cost of living is more normal, and commute an hour or two into the city.
The people who are making that little and still choose to live in the city are usually young people who are willing to cram a lot of people in a small apartment in order to be close to where all the fun is...and it's definitely a lot of fun to live there.

[RikaKazak]

Originally Posted by WhiskeyFish

Unless I'm missing something, he really should have been comparing salaries on an after-tax basis. That would have made the expensive cities fair even worse, since high salaries are paying a higher overall tax rate. Also, NYC gouges you with its own taxes...I'm not sure about the others at the top of his list.

100% agreed

[tootiegootie]

just some info that is interesting.

at my old mortgage company, we were doing some loans for people in boston which has an extremely high cost of living compared to where i live in the midwest. we found that on average they had the same incomes as what we normally worked with but their houses were costing about 3 times as much. It was pretty nuts to see. A 300k house in boston won't get you much but if you had a 300k house when i live it would be pretty ridiculous and you'd be extremely baller.

we had no idea how they could afford their housing. on paper they certainly couldn't.

[hobiejuan1]

This is another reason why certain universities located in big cities like NYC or Chicago are always rated the best schools in the country. What is taught at Harvard, Penn or other schools is not that much different than what is taught at Univ of Tenn. The difference is that the students graduate and tend to stay close to their school with a high paying job in an area that is expensive while people who graduate from an SEC school live in a smaller town with a lower paying job and lower cost of living. Vicious cycle IMO

[RikaKazak]

Originally Posted by hobiejuan1

This is another reason why certain universities located in big cities like NYC or Chicago are always rated the best schools in the country. What is taught at Harvard, Penn or other schools is not that much different than what is taught at Univ of Tenn. The difference is that the students graduate and tend to stay close to their school with a high paying job in an area that is expensive while people who graduate from an SEC school live in a smaller town with a lower paying job and lower cost of living. Vicious cycle IMO

Very interesting point, I've never thought of it like that, but you're probably right.