How smart are they if they trade a 20% increase in pay for a 100% increase in cost of living?
1) The median household income in Denver CO is $64,000. That's around 77% higher than in Altoona PA. Two locations specifically referenced in the article.
2) The opportunities that pay a lot more than that gap, do not exist to begin with in Altoona. Software, Internet, misc engineer jobs - the locations that people are fleeing from are death zones economically. Denver and Boulder are quasi boom cities; the Altoona's are the exact opposite; that means, over the next ten years your income will very likely expand nicely in those CO locations, whereas you're very unlikely to see meaningful improvement in Altoona.
3) Lifestyle is important for most people and likely that much more so for people willing to move across the country for better opportunities. Boulder and Denver are both incredible by comparison to Altoona PA, when it comes to lifestyle upgrade.
To answer your question, the people desperately fleeing from all those dying economic zones, seeking a vastly superior future, are extremely smart indeed.
The tradeoff is that quality of life is terrible. The cities are full of petty bug people. And COL makes living standards precarious for all but the wealthy and the extremely poor (government programs). The precariousness also inhibits the formation of stable IRL (as opposed to chat group based) friend groups.
That said, after half a decade of this I've saved enough money to go back home and use stocks, real estate, and side hustles to put down roots with a decent quality of life.
Sometimes I feel like Odysseus on Ogygia. It's easy to be trapped in one of these hubs so long that you miss out on the chance to exit young-adulthood gracefully. (Very sad the number of friends I have who decided to start a family too late and couldn't quite make it work out).
What does that mean?
Also what does this even mean?
> The tradeoff is that quality of life is terrible. The cities are full of petty bug people. And COL makes living standards precarious for all but the wealthy and the extremely poor (government programs). The precariousness also inhibits the formation of stable IRL (as opposed to chat group based) friend groups.
> That said, after half a decade of this I've saved enough money to go back home and use stocks, real estate, and side hustles to put down roots with a decent quality of life.
> Sometimes I feel like Odysseus on Ogygia. It's easy to be trapped in one of these hubs so long that you miss out on the chance to exit young-adulthood gracefully. (Very sad the number of friends I have who decided to start a family too late and couldn't quite make it work out). --- Good luck making it to where you want to be!
It's good to remember that different people have widely varying preferences of quality of life - urban/rural, ocean/mountain/plain, wet/dry, tropical/temperate/less-temperate, etc. I'm glad not everybody wants to live in the same place!
Enjoy being retired in SV 2.0
Definitely not Longs. I guess you could drive to the top of Evans or Pikes Peak :)
The model in which masses of migrating people are too dumb to consider their own interest is less plausible than one in which a snarky internet dismissal might be failing to consider everything.
Let's say you're living in Topeka, making $75,000, you happen to own an average home with a market value of $150,000. Amazon Seattle offers you a job for $130,000. Is taking the job a better deal when the average home in Seattle is $700,000? Your $1,000 Topeka mortgage payment will quadruple consuming 50%+ of your take home pay.
Not to mention, after saving similar (or more) you'll own a home 5x in value.
You need to save when you are young to take advantage of compounding interest. Don’t get caught up in the rat race.
My ideal is to directly have ownership in businesses with strong cash flow, good real estate value, citizenship and property in another country or two, and most importantly, to have the human capital of knowing the right people in government/medicine/law/etc to be able to lean on the right people when I need them.
I'm lucky enough to have a stable family so that I can afford to take risks to try to make the above happen (some of which I have made significant progress in), but I definitely don't plan on depending on my 401(k) other than as a worst case scenario.
It's not rocket science.
Also, consider what happens to your asset value when your 150k home in Topeka grows at the normal rate there vs a 700k home growing at the rate home values are in Seattle. You could build a very nice amount of equity in the expensive market, sell it and then buy a gigantic/perfect/<insert your reqs here> house back in Topeka in cash and have no mortgage. These markets (Seattle, SF, Denver, ect.) have their appeal even if you don't care about the city life or mountains or whatever.