US economy is getting regional; the middle class income is now regional as well

[Singuy]

Just to put things into perspective.

The state income tax of CA for my income bracket is 11.3%. Hoping that it's progressive like the federal income tax, my effective tax rate is probably around 8%.

Just for me to set foot into any city in CA, I will end up paying 32k/year in taxes just to the state which I don't have to pay in FL.

After living in CA for just 18 months, the tax I pay is more than the cost of my car.

After living in CA for just 4 years, the tax I paid is more than my extravagant pool.

Staying in California for 14 years, the tax I paid will be more than my extravagant house.

Staying in Cali till my retirement age of 31 years from now, I would of paid over 1 MILLION dollars in EXTRA TAXES
If you add opportunity cost, at a 7% return on my 32k I SAVE instead of giving to the government, I would of made 3.5 million dollars over 31 years (3.5 million positive vs 1 million negative..which is a 4.5 million swing)

Perhaps you can tell me I am pretending to be frugal if I actually live in California because the numbers don't lie.

I am not even talking about the high cost of living.....

Just food for thought.....

[sv2007]

CA has progressive tax.

One of the reasons we moved to TX was no income tax. It's like getting a 10% raise immediately (job paid me same $); plus the overall lower cost of living allowed me to save a lot more.

But I couldn't do a lot of the things I take for granted in CA: surfing (there's Galveston but that's no fun and hours away); quick weekend skiing; no mountains for motorcycling; and too hot for me to do well on the racetrack (plus it's far).

Back to why I save money. I save money to enjoy life my way.
I can't do that in TX.

A few things I did pick up while in TX: guns and scuba.
I actually made money on my gun hobby!
It's only only hobby that ever made money.

[dawnwes]

Just to put things into perspective.

The state income tax of CA for my income bracket is 11.3%. Hoping that it's progressive like the federal income tax, my effective tax rate is probably around 8%.

Just for me to set foot into any city in CA, I will end up paying 32k/year in taxes just to the state which I don't have to pay in FL.

After living in CA for just 18 months, the tax I pay is more than the cost of my car.

After living in CA for just 4 years, the tax I paid is more than my extravagant pool.

Staying in California for 14 years, the tax I paid will be more than my extravagant house.

Staying in Cali till my retirement age of 31 years from now, I would of paid over 1 MILLION dollars in EXTRA TAXES
If you add opportunity cost, at a 7% return on my 32k I SAVE instead of giving to the government, I would of made 3.5 million dollars over 31 years (3.5 million positive vs 1 million negative..which is a 4.5 million swing)

Perhaps you can tell me I am pretending to be frugal if I actually live in California because the numbers don't lie.

I am not even talking about the high cost of living.....

Just food for thought.....

I am not going to argue. The numbers may or may not be that way for you. You definitely should not go to California.

I just don't understand why you need to be so visceral about it. You tend to take these things personally and I just don't get why.

I wouldn't want to live in Florida. Does it really matter to you all that much? We all live where we either want to live or have to live. Live and let live.

As for the other stuff, particularly the race arguing, it needs to STOP. I could say a lot more, but both sides need to just STOP.

[Singuy]

I am not going to argue. The numbers may or may not be that way for you. You definitely should not go to California.

I just don't understand why you need to be so visceral about it. You tend to take these things personally and I just don't get why.

I wouldn't want to live in Florida. Does it really matter to you all that much? We all live where we either want to live or have to live. Live and let live.

As for the other stuff, particularly the race arguing, it needs to STOP. I could say a lot more, but both sides need to just STOP.

I take things personally when people attack me personally.. From calling me pretending to be frugal to "I know Chinese people are such and such".. And all I have done here is pointing out a possible reason why certain people ends up living paycheck to paycheck or having a hard time meeting their savings goal.

All started because some of you guys are butt hurt from me equating living in HCOLA to purchasing brand name handbags.
Both are expensive beyond the norm, both have cheaper alternatives, and both have have a diminishing rate of return...and I am not even demonizing the decision by saying "hey I buy expensive things too that may not make sense to the frugal calculating people because I like it!"...but nope you guys can't handle it and start calling me this and that...

[Singuy]

The part I am trying to fight you guys is your attitude toward scaling down..and this is the biggest problem I feel that is causing people to be stuck financially. I don't think your decision to live in HCOLAs is smart or dumb..nor do I care. I don't want people reading posts from savingadvice gurus saying things like "oh I just can't stand bugs so I'll never live in a state that may be cheaper and more beneficial to my finances overall...but you know..them bugs!"

That's the part that annoys the crap out of me..it's that entitlement thinking..has nothing to do with HCOLAS as a place. You guys don't need to convince me why these places are awesome..I know these places are awesome..

You guys are convincing the readers why it's okay to live paycheck to paycheck because who wants to deal with humidity and bugs right?...This is why I am SMH....

[dawnwes]

The part I am trying to fight you guys is your attitude toward scaling down..and this is the biggest problem I feel that is causing people to be stuck financially. I don't think your decision to live in HCOLAs is smart or dumb..nor do I care. I don't want people reading posts from savingadvice gurus saying things like "oh I just can't stand bugs so I'll never live in a state that may be cheaper and more beneficial to my finances overall...but you know..them bugs!"

That's the part that annoys the crap out of me..it's that entitlement thinking..has nothing to do with HCOLAS as a place. You guys don't need to convince me why these places are awesome..I know these places are awesome..

You guys are convincing the readers why it's okay to live paycheck to paycheck because who wants to deal with humidity and bugs right?...This is why I am SMH....

You have really lost me. I am not sure now what all you are angry/frustrated/offended about.

But you make sure to include "You Americans" in your comments. Are you not American?

You say you don't care where people live, but you seem to spend a huge amount of time explaining why it does matter to you.

If this forum is causing so much angst, perhaps it is best to step away for a while.

Dawn

[dawnwes]

I take things personally when people attack me personally.. From calling me pretending to be frugal to "I know Chinese people are such and such".. And all I have done here is pointing out a possible reason why certain people ends up living paycheck to paycheck or having a hard time meeting their savings goal.

All started because some of you guys are butt hurt from me equating living in HCOLA to purchasing brand name handbags.
Both are expensive beyond the norm, both have cheaper alternatives, and both have have a diminishing rate of return...and I am not even demonizing the decision by saying "hey I buy expensive things too that may not make sense to the frugal calculating people because I like it!"...but nope you guys can't handle it and start calling me this and that...

Really, you can't let these things get to you like this.

I have been the biggest proponent of getting anything RACIAL off this board.

I have not said what race I am, nor have I mentioned the races of my husband and children. We are not all one race.

[Singuy]

You have really lost me. I am not sure now what all you are angry/frustrated/offended about.

But you make sure to include "You Americans" in your comments. Are you not American?

You say you don't care where people live, but you seem to spend a huge amount of time explaining why it does matter to you.

If this forum is causing so much angst, perhaps it is best to step away for a while.

Dawn

1. For that I apologize and I said it because my race was attacked for valuing materialistic goods vs lifestyle..so that got a little out of hand

2. If you read back, the first thing I said was..I don't find the value of living in HCOLAS but maybe YOU DO. You guys spend the entire time trying to convince me how the higher cost is fully justified because there's value and it's from a lifestyle standpoint which I don't share the same opinion..then went on attacking how I only want big houses and nice cars...it's utterly nonsense.

Honestly it's like talking to my co-workers living paycheck to paycheck making 250k/year..she claims there's value to her lavish living lifestyle...uhh sure...but this is a savings forum. We can't just tell people to cut their cable bills and "live below their means" without talking about root cause issues.

My discussion was...hey maybe there's an overly inflated perceived value to HCOLAS area like designer brands which traps middle class Americans into a financial hardship. I mean what's the difference between my foreclosed neighbor who moved into a neighborhood beyond what he can handle and someone moving to HCOLAS beyond what they can handle? Why is one decision a financial mistake and the other is fully justified?

[dawnwes]

1. For that I apologize and I said it because my race was attacked for valuing materialistic goods vs lifestyle..so that got a little out of hand

2. If you read back, the first thing I said was..I don't find the value of living in HCOLAS but maybe YOU DO. You guys spend the entire time trying to convince me how the higher cost is fully justified because there's value and it's from a lifestyle standpoint which I don't share the same opinion..then went on attacking how I only want big houses and nice cars...it's utterly nonsense.

Honestly it's like talking to my co-workers living paycheck to paycheck making 250k/year..she claims there's value to her lavish living lifestyle...uhh sure...but this is a savings forum. We can't just tell people to cut their cable bills and "live below their means" without talking about root cause issues.

My discussion was...hey maybe there's an overly inflated perceived value to HCOLAS area like designer brands which traps middle class Americans into a financial hardship. I mean what's the difference between my foreclosed neighbor who moved into a neighborhood beyond what he can handle and someone moving to HCOLAS beyond what they can handle? Why is one decision a financial mistake and the other is fully justified?

I never said that. I simply said that I personally love living in Los Angeles, my family DOES NOT, so here we are in NC and here we will stay. We have bugs! Does that make you feel better? I still hate them.

But the point is that it is a CHOICE of where to live is true to a large degree. You may choose it for a job or for family, etc....but it is a choice. There are SOME jobs where you don't have a choice, and I get that, but for most of us, it is a choice.

But I don't think anyone should have to live anywhere they don't want to live. I just don't want to be told I am an idiot who doesn't understand finances. I know how to do math and we have never, ever, ever just lived paycheck to paycheck.

Most of us who post more often do have a handle on our finances, FWIW.

[Singuy]

I never said that. I simply said that I personally love living in Los Angeles, my family DOES NOT, so here we are in NC and here we will stay. We have bugs! Does that make you feel better? I still hate them.

But the point is that it is a CHOICE of where to live is true to a large degree. You may choose it for a job or for family, etc....but it is a choice. There are SOME jobs where you don't have a choice, and I get that, but for most of us, it is a choice.

But I don't think anyone should have to live anywhere they don't want to live. I just don't want to be told I am an idiot who doesn't understand finances. I know how to do math and we have never, ever, ever just lived paycheck to paycheck.

Most of us who post more often do have a handle on our finances, FWIW.

You never said that but poster Nika did..sorry multiple people are attackibh me at once so you have to read the whole thing to understand...its me vs 4 here. Also I fully agreed to what you said..just doesn't share the opinion that the amenities you presented in a HCOLAs is worth 8x the house prices. (And that's just my opinion..it might be worth it to you)

Lastly I don't know why you felt that I called you or anyone an idiot. I am not even talking about anyone here in particular. Everyone here obviously live below their means, but 76% if the population don't and those are the people I am aiming at..but not calling them an idiot..but look at cost of living from a different perspective.

[LivingAlmostLarge]

Maybe but singuy you are the same person who won't pay for college unless it's a major you choose. It's the same thing. Do I believe it's easier to save in a LCOLA? Absolutely. I don't believe that proportionately incomes are lower in LCOLA.

But at the same time there are other reasons people stay where they are. For us we stayed in HCOLA because schooling then jobs. Then we moved to a LCOLA and it's better. It's not cheap but cheaper. It was a very conscious decision. We knew our salaries would not be proportionately cheaper.

However many of our friends who stayed more than a few made less than us where we lived but chose to stay near friends and family. And i can say that I get it. They have free babysitting, they have support if they are sick (cancer, etc), they feel comfortable and are happier. So they save less money. So they have a smaller home, drive a cheaper car.

One couple in particular are a teacher and city planner. They make barely $100k combined and yet they live in a very HCOLA. Stupid? Absolutely but it's not all $. Would I? I don't know I haven't been in that position of being in a HCOLA and have family around. Maybe who knows?

But the point is that there is a huge income discrepancy especially in major cities. And it's getting worse, where how many articles do we see about where do "working" class people supporting these "rich" cities like SF/NY probably even Bos, DC, LA/SD, etc where do teachers, admins, city planners, counselors, social workers, etc live if they work in communities they can't afford? Or the only place they can afford is 1 hr away?

It's not a problem easily solved but in SF, where should a teacher live? I read on MMM forum that a teacher in Boston is single and that's how she lives. But once a family comes and she can't bunk in a room in a house? Her $60k salary is crap and it is the "highest" in the country she wrote. hmmmm....now what?

And if you go on MMM forum those are hardcore frugalistas and they would say that no matter what you save, driving a BMW and Jag make you spendy. Many there have a lot in the bank and still don't drive that because they are about living a simplier life. Not me personally, but I am impressed at how many people are living with families of 4 on $20k or less a year.

So yes you can be frugal in comparison to your income. But really frugal? Not like those people. I don't think it's bad, but you just have to realize that your reality is not the same as someone whose budget is $20k/year and they are "frugal". I mean look at Mr Money Mustache. He retired with only $700k in assets but after the blog i'm certain he got 7 figures for it. And I'm also certain he's got a lot more in the bank now. And yet he has the same car and the same life. He'd argue that's frugal.

[disneysteve]

hardcore frugalistas and they would say that no matter what you save, driving a BMW and Jag make you spendy.

This immediately made me think of The Millionaire Next Door. In that book, the author interviewed many millionaires (and this was years ago when being a millionaire was a more significant accomplishment). The majority had modest cars, cheap watches, low key homes, etc. The true millionaires weren't the ones driving the imported luxury vehicles or wearing the Rolex watches. They were the ones driving the Ford pick up and wearing a Timex. The folks driving the flashy high end cars were the ones trying to look rich.

[dawnwes]

You never said that but poster Nika did..sorry multiple people are attackibh me at once so you have to read the whole thing to understand...its me vs 4 here. Also I fully agreed to what you said..just doesn't share the opinion that the amenities you presented in a HCOLAs is worth 8x the house prices. (And that's just my opinion..it might be worth it to you)

Lastly I don't know why you felt that I called you or anyone an idiot. I am not even talking about anyone here in particular. Everyone here obviously live below their means, but 76% if the population don't and those are the people I am aiming at..but not calling them an idiot..but look at cost of living from a different perspective.

To address the bolded......we purchased 3 homes in Los Angeles. The first was in 1995. It was $142K. We should never have sold that home. However, we made $75K on it when we sold it (after realtor fees, etc...). The final home we bought was in 2000 for $250K. We sold it for $600K, but we did put some work into it and I think we cleared about $200K after all was said and done with fixing it up, realtor fees, etc....

So, we really didn't have an 8x house payment......because we bought at the right time.

If we were to go BACK, that is when we would have the problem......going back to a HCOL would be far more problematic than being there from the beginning.

[Singuy]

This immediately made me think of The Millionaire Next Door. In that book, the author interviewed many millionaires (and this was years ago when being a millionaire was a more significant accomplishment). The majority had modest cars, cheap watches, low key homes, etc. The true millionaires weren't the ones driving the imported luxury vehicles or wearing the Rolex watches. They were the ones driving the Ford pick up and wearing a Timex. The folks driving the flashy high end cars were the ones trying to look rich.

I agree but it's all relative

Some people are willing to save up a million and live off 25k/year and that's retirement for them because they simply have a hard time saving 2, 3, or 5 million. The average income for those millionaire next door is around 100kish.

I feel that if you have a couple of mil in the bank before retirement with a passive income of 200-400k..you can't lie to yourself and say "it was my spendy way that got me there". I know people who makes 300k/year and blow every cent they have with a negative net worth.

Given our income level, we are pretty modest(my opinion). We have less car sitting in our drive way compared to my neighbors, and we always bought used, we always get inside cabins on cruises, we barely go out and eat, we don't have brand name watches/purses/clothing, our furniture is from ikea, and the list goes on and on and on.

It's all about ratio to us anyways. A tech I work with buys a new BRZ is equivalent to us buying a rolls royce...except we ended up buying a bmw that's cheaper than a new fully loaded honda civic.

My mindset has always been frugal. We never want to exceed 2x of our income when it comes to housing, and I actually really wanted a used Volt to save gas...or a Mazda 3 manual. But my parents decided to drop 38k cash on a Jag for me as a wedding present.

The other day we got into a fight because I was thinking about selling the Jag for a used BMW X1(which was 20k) and a used Volt...but the parents were not cool with that at all. And yes, my parents are those who practice extreme cheapstaking but willing to drop big cash on houses and cars.

[disneysteve]

The other day we got into a fight because I was thinking about selling the Jag for a used BMW X1(which was 20k) and a used Volt...but the parents were not cool with that at all. And yes, my parents are those who practice extreme cheapstaking but willing to drop big cash on houses and cars.

How old are you? Why are your parents dictating what kind of car you drive?