I may not leave her a lot of inherited wealth, but she may also not really need any to have options.
(That said, my personal frame of reference for why this is better and wonderfully stress-free is years lived in South Korea--that ultra-low fertility rate has reasons--, not so much the US.)
Folks here expect and trust the state to provide for the future, private provisions are easily dismissed as unnecessary. As a result of this the median household wealth of the area I live in is 5x lower than my home country of Australia, despite incomes (adjusted for purchasing power) not being drastically different.
Whether that trust is wisely placed we'll have to wait and see[1]. However I do need to narrow that down a bit, it's not the whole EU, mostly France/Germany. There are other nations moving ahead with private pension schemes etc and much higher household wealth (Denmark, Sweden, Netherlands).
1. My main concern is government investment is inherently slow, politically charged, and pathologically risk averse vs the private sector. This means in the aggregate, over the long term, private household investments will out perform.
Probably explains a good chunk of Germany's and the EUs anemic growth. Simply put, that's 127B EUR that can't be spent investing in the future and growing the economy.
What is a decent pension and where it will come from? I'm projected to get a decent SSA pension (bigger than a median income in top tier EU countries), but I am not counting on it. What gives you confidence that government will be able to support you through retirement?
Laws that obligate the country to do so
I understand why you would want higher net income to enjoy a wealthy life, but for "investing in the stock market"? I also understand why you would want to earn more so that your kids can have a better life, but why "after you die"?
If anything, the latter can be turned into an argument for the EU way. Your kids don't need you dead, they need you to be alive and caring. So you have vacations so you can spend time with them, public education so that they have the skills to help themselves, so they don't need your inheritance, and healthcare to keep you alive even if your "stock market investments" are at a low point.
The U.S. is filled with homeless people. Even Italy, which was doing economically terrible when I visited, didn’t even have a fraction of the homelessness problem as in the U.S.
Italy is much lower at 8/100k.
45/100k would be an incredible improvement.
Though looking up Paris, it is ~200/100k, which is still half of Seattle's rate!
The definition of who is homeless and how they are counted varies dramatically between countries to the point where comparing headline numbers is largely useless.
Except Finland and Danemark[0]
Interestingly, these are not unrelated. Italy's housing prices are very low because of how badly it's doing economically.
And also... no -- homelessness is one bad problem, but there are other problems. Bad economies cause a myriad, including declining healthcare availability and reductions in life expectancy.
The city just dismantled its gifted program for schools, so if your kid is a high achiever plan on another 40k a year for schooling.
Even swim classes have a huge waitlist and are expensive. Any type of children's activity is absurdly expensive due to the high cost of living.
Housing is absurd, if you have a couple kids plan on spending 4k a month on rent for a place in a nice neighborhood.
Most Americans have around a thousand dollars in savings and that is it. Americans are, by and large, not even able to save up for retirement, with zero hope of leaving anything to their kids.
Tech worker salaries are a small bubble in all of this.
Per the US government's own BLS, the median household has >$1,000 leftover each month after all ordinary expenses. Americans may not save much but it isn't for lack of available income.
America is full of people who are working a job and a half (with a good chance both are 30hr a week jobs that offer no benefits, and may have "flexible" scheduling where the employee is called in to work different computed selected shifts each week), and people who are working in offices earning good money.
In the middle you have some people working trades still.
We switched over from a manufacturing economy that made things and gave people stability and enough money to raise a family to a "service" economy, and then we started telling everyone working service jobs that "those jobs aren't real careers, so of course you are being treated and paid poorly!"
I would suggest, though, that if you didn't grow up in the bay area and have family property here, as a relocation target it should be considered similar to gold mining. You're moving here for work because of the amount you can save [as a result of ludicrous tech compensation] and then use elsewhere, not because it makes sense financially to actually be living here.
I'm third generation here. Although I'm remote, my wife's job is tied to a location here. We both want to live someplace with a strong international community, access to an airport with lots of overseas flights, and that is a reasonably large population center. (IMHO Seattle is still small, and we are lacking many things for it, although that has gotten better over the last decade or so.)
The only other locations that meet our criteria have either garbage politics or garbage weather. (not that I'm happy with Seattle's politics, but at least our city council is mostly incompetent and a little bit malicious, as opposed to mostly malicious and a little bit incompetent!)
Best of luck to you on your endeavor.
I don't want a super low CoL, but I realize that housing prices have gone up in excess of what they should have due to restrictive housing policies.
Seattle used to be 1/2 the price of the Bay Area, or less! Engineers here earned less than in the SF, but we were OK with it because the QoL was great at a much lower cost.
But the city and surrounding areas refused to upzone, to such a degree that the state legislature finally had to force the issue, but even then the laws passed are too little too late.
The reason for the high CoL is lack of construction, plain and simple. Getting simple residential permits can take half a year or more, environmental regulations have limited what even homeowners can do with their own houses, and the majority of the city is still zoned for only single family homes.
The high price of building means that daycares can't open (too expensive to justify), and workers in all fields demand ever higher pay just so they can afford rent, which drives up the cost of everything.
For the last decade we've built 1/2 as many houses as we've had people moving to the city, and a large percent of new dense construction is rental only, which means money leaving the city and residents not building up any equity (or long term stake) in the city.
Bad policies lead to bad outcomes.
If your kids appreciate your money more than your time is when you know you screwed up.
he should spend every penny he’s got to spend every minute he can with his kids - especially while they are young. and his kids will say the same.
not noble at all - naive, dangerous and downright stupid thinking
Not if you do the slightest bit of planning.
If you will have under $7M in your estate, the slightest is literally nothing. You will not owe a penny of federal estate tax.
If you have over $7M in your estate, it's worth consulting an estate planner, but the basics look like gifting and establishing trusts while you are alive (and ideally while the exclusion amounts are high).
The current exclusion is $13.61M per person, or 2x that per couple and set to drop down to $5.6M in 2017 dollars on January 1, 2026.
If there's a chance that you'll have over $7M and die in 2026, the slightest is gift some of it now [directly and/or via trusts or 529 plans] while the estate tax exclusion is still $13.61M and file form 709.
Raising your kids to be able to stand on their own and deal with the harshness of the world is far more important in my opinion.
We start with 19 + 7 days and get 1 extra day per year of service until 5 years. (We also get a 4 week contiguous block once every 5 years.)
Therefore that's 5 less weeks with the kids each year — or about 1.6 years total by the time they leave home for college.
I have 4 weeks of vacation plus 11 federal holidays, which is close to the norm in nearly every professional job I'm aware of.
I use it and make a very healthy wage when I'm at work.
I could consider going to the US to earn some money while young but never to start a family.
If Americans give up on home ownership and luxury items, they too can enjoy a European quality of life; living in an 800sqft rental and enjoying a rich social life.
Like personally I'm doing great, and so are a lot of people I know, and I'm sure you as well. But I think a lot of Americans are struggling badly with their social lives.
The largest contributor according the book's surveys and studies (and I love saying this) is television outcompeting in-person fun. Car dependency is a factor, but IIRC was factor #2 or #3. While this ranking was true at the time of publication, I would wager that time spent on "screens" is likely factor #1, #2, and #3 now.
Please read the version with the 20 year update: https://www.amazon.com/Bowling-Alone-Collapse-American-Commu...
I would wager that many people are fleeing their hometowns to socialize in cities not because they're walkable, but because the density of people increases, allowing you to have better odds meeting real humans who haven't been lost to the allure of the indoors.
I don't think you can have a realistic conversation about American physical or mental health without centering this fact
Americans are much lonelier than their European counterparts.
In addition, lifespans in the U.S. are declining even post COVID relative to their European counterparts, largely due to increases in “deaths of despair” (drugs, suicides, etc).
The idea that Americans have a “rich social life” is not true relative to Europeans. Even the church going etc. is for most people forced upon them as opposed to something they want to do, as evidenced by the increasing number of people saying they’re faithless but onto church anyways.
That doesn’t mean that people with rich social lives don’t exist or even that the lack of such a rich social life is a problem for a majority of people.
What it means is that the U.S. broadly isn’t doing as well as Europeans and further things are getting worse.
It's easy to make a study that shows that the US has more X than some number of European countries—you just compare the entire US to all European countries and then cherry pick the ones where we do worse. But the US is a big place with a lot of variety in living conditions—even if you just broke down the results by broad geographic region rather than state, you would get dramatically different results than taking the US as a whole. What happens if you compare loneliness in the South with loneliness in Denmark? Or what about loneliness across the entire US with loneliness across the entire EU?
This is the cultural aspect.
I have a lot of friends who went the opposite direction of you, and chose a cheaper but more fulfilling life in Europe.
Instead of making 200k a year in the us, they make modest salaries and rent 100-year-old farmhouse flats that Americans would call a slum. They drive economy cars and spend their ample time socializing or outdoors.
My personal opinion is that Europeans simply place a higher priority on social interaction and incorporate it into their daily lives. Many of them have more modest financial aspirations, and don't expect to ever own a house, vacation property, or boat.
I basically explain this by comparing my life (US of A) to my sisters (EU). My sister makes great money - my sister spends ALL of this great money. she lives paycheck-to-paycheck which in US would mean she is poor, in EU she is living large (just came back from UAE, heading to Kenya in a couple of weeks, January Macedonia and Austria…). I make 789x what she does and put away 60+% - been doing this for 25 years now, almost done with working though
My take is that Americans like to make infrastructure an excuse for everything when it really boils down to priorities and preferences.
10 km is a 20 minute bike ride if you're not too obese to fit on one. 10 minutes if you pick a coffee shop, pup, or Park that is halfway. Unfortunately, most people prefer Netflix and the fridge which is even closer
e-bike ? otherwise you have to be riding race type bike with really good dedicated bike lane
However, this kind of whataboutism illustrates my point. There's a near infinite number of places humans can congregate to enjoy each other's company. It can be a park or a coffee shop or a pub or your kitchen table for tea.
The fact that none of these are suitable demonstrates that the desire to get together is not there.
downtown Denver can house minuscule part of the population of the Denver metro area - only those affluent enough to afford it. America (again) is not downtown Denver or downtown SF or downtown anything...
Also, a lot of american homes seem to need space for luxuries which are simply weird for many europeans.
A bathroom per bedroom for instance? Why not share a bathroom with the entire household,and have a seperate small toilet instead?
American kitchens also seem really large compared to most european one's i have seen, but they also seem to have a more social function then what kitchens are used for normally. (preparing food)
Why would you if you don't have to? It's great to have space.
There's a special "retirement plan by actions" (PEA) with lower capital gains tax, and the reason why most French people don't invest in the stock market is mostly lack of education around it. For most, real estate is the main way of investing/saving money. The stock market is dangerous and you can lose everything, and many have personal references (their parents/themselves bought stock from efforts such as the Eurotunnel that failed, financially) to that effect.
What's the point of inheriting a life in a corporate hellscape (presuming you live in a tech city).
Did a charity work for my money? No. They just supposedly will (but possibly not) use some of it for something aligned with my interests. Just like giving my money to my children.
If parent’s work beyond what they can spend in their lifetime is not given to the children, who would continue to choose to work? Already in Canada you can exceed 50% tax rate and many adults who could see more patients, write more books, take more cases, do more work, choose not to as the marginal benefit decreases.
Then, your family will have a choice as to whether to spend that money on you/your spouse or to not spend it on you and to rely on Medicaid.
No one actually pays $50k out of pocket for surgery. Most of it is covered by insurance.
I've watched both my parents go through this, with significant chronic health issues. They had good private insurance on top of Medicare, they routinely had $10-30K annual itemized deductions for health related expenses that were not covered by their insurance. And that was with a daughter who is an MD who invested a massive amount of time and effort to get insurance to cover as much as possible.
Older kids will only have virtual needs. They'll have a job and health insurance.