Pay Differences in Job Salaries Between Cities - Not Big Enough
16 September 2006CNN has a short article on a comparison they did between several jobs that earned a national median of either $60,000 or $90,000. They were trying to find out if a person with that job in an expensive city, such as New York, would make much more than a person in any of the cities around the U.S. with inexpensive cost of living. As you might expect, they don’t - but the extra money people make in New York was surprisingly low to me. It’s nowhere near enough to compensate for the higher cost of living. For example, in jobs with a national median of $90,000, they only pay a salary of about $100,000 in New York. For comparison, the article points out that you’d need about $200,000 a year in New York to afford the lifestyle $100,000 will get you in a smaller city. I know some people love the lifestyle of the big city - but you are giving up a lot to live there.
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2 Responses to “Pay Differences in Job Salaries Between Cities - Not Big Enough”
September 27th, 2006 at 3:19 pm
[...] A lot of people think this doesn’t matter - but it can be the single biggest personal finance decision you make. Your house is going to be your biggest expense, period. It’s usually around one-third of your income. If you get similar pay in a cheap city, you can cut your monthly expenses, big time. Let’s say you’re picking between D.C. and Houston. That’s $800,000 vs. $155,000. In D.C., at 6% interest, that’s $4,800 a month. In Houston, you pay $929 a month. In reality, you’d probably just live in a tiny apartment in D.C. versus a house in Houston. But let’s assume you’ve got a real choice - same house in either city. How much could you save over time by picking the cheap city? $3,871 a month - at 9% a year - or about $2.4 million at the end of twenty years. So if you do it soon enough, pretty much all you’d need to do to retire is move off to a cheaper city. Most people don’t make anywhere near enough to afford a $4,800 mortgage, but they also don’t need $2.5 million in retirement, either. [...]
October 13th, 2006 at 6:25 pm
[...] of living to me. Discuss this in the Free the Drones Forums. Posted in Real Estate | Trackback | del.icio.us | Top OfPage [...]