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Old 06-26-2014, 12:52 PM   #21
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Also, wages are higher in CA to compensate for higher living expense.
I'm not sure if you are being sarcastic or not. Everytime I have been approached about a job in California it has always been for less money. The big selling point is supposed to be the opportunity to move to California. They must get some takers.

When I graduated back in the 70s, I interviewed for several positions. The one around LA touted their charter bus that took employees to where they could afford to live and it only was a 90 minute ride. One position around SF talked up their program that put 4 single engineers in a 2 bedroom apartment so they could afford the cost of the apartment.

I took a job in Houston for an extra $25/month (not totally insignificant in the early 70s) and got my own one bedroom apartment for less than what my share of the 2 bedroom apartment would have been. I also avoided state income tax and other higher cost of living issues. I moved from the Seattle area so I definitely moved to a dramatically different climate.

I've certainly been to various parts of California and had some nice times there. I haven't been so overwhelmed with what I've seen to make me want to live there. If I was wanting to spend time there, I'd probably avoid the income taxes by moving my residency out of the state and rent condos on a monthly basis. I do understand that there's a lot of attraction to staying where you're comfortable with friends and family near-by. That's why I'll never drag DW out of Houston.
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Old 06-26-2014, 01:00 PM   #22
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I was born in NoCal in the redwood country. I have lived in California for most of my life. I spent a few years living in other places - Pennsylvania and Michigan - during my "adventurous years." But, I was so incredibly homesick.... Today I live in the Sierra Foothills, in an Oak forest. The relationships with friends and family are priceless.

We live in a house we built ourselves, and our electricity bill has never been over $60.00/mo, even during the hot summers. That makes up for the land taxes of $3,000 per year. We grow and purchase much of our food locally.

But, really, I think I would be happy living in just about any state in the NW - Washington, Oregon, Idaho, Montana, Utah, Nevada. I thrive when there is a free exchange of ideas, etc. It seems to me that the entire northwestern US has a feel to it that I recognize as "home."
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Old 06-26-2014, 01:06 PM   #23
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Also, wages are higher in CA to compensate for higher living expense.
I am not so sure either. DW's income is tied to some regional cost of living index and when we moved from the south to California, her income only went up ~18%. Not enough to offset the higher cost of living. Of course, California is a big state. One can live on a lot less money inland.
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Old 06-26-2014, 01:14 PM   #24
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I have told this story about my brother.

A BIG company in Mountain View wanted him back. He did not say how much higher the pay would be relative to what he got, but there was a stock grant in the mid 6 figures if he would stay for a few years. After figuring out what it would cost for the McMansion he has now, and that he has spent $100K to update to make it perfect to their liking, he had to pass up the offer.
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Old 06-26-2014, 01:22 PM   #25
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We did it all wrong. When I quit working, we lived in a low-to-medium cost of living area (Southeast US) and had adequate funding for a lengthy retirement there. Then DW decided to pursue a job opportunity in California. We fully expected the move to be temporary. But after a couple of enjoyable years here, we would like to stay. That presents a big challenge, thanks to the "living in California surtax" as you put it. Even if were to sell our paid-for house in the south, it would barely provide enough cash for a downpayment on a -much smaller- house in California!
If you think the "living in California surtax" is bad, try Hawaii's!!!!!
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Old 06-26-2014, 01:31 PM   #26
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I've lived most of my life in the Bay Area.

Market price of my townhouse is worth about $500k more than the mortgage I have on it.

Property taxes are about $5k a year but the HOA fees are creeping up, $375 a month compared to $190 a month 18 years ago.

I can cover the living and housing expenses easily and can get good retirement "income" from financial investments, without trying to leverage the gain I could get by selling.

But if I sell and tried to stay in the Bay Area, I'd probably have to put money in, to move to a larger home and pay double, triple, or more on property taxes per year.

I haven't taken advantage of the outdoor activities as much as I could have. I guess once I FIRE, I could do more hiking, more trips to Tahoe or to the coasts.

I'm aware that there are many places in the country with lower housing costs, lower taxes. Haven't really looked that deeply into moving though.

The things that would get me to leave would be to get more space for less money and less congestion, because traffic around my neighborhood has increased a lot.

One idea I'm playing with is to spend a lot more time traveling, including possibly staying a couple of months at a time overseas as opposed to taking 1 or 2-week vacations.

For that, it might be easier to stay where I am. I could lower my housing costs but being an hour away from SFO airport would be hard to beat for international flights.
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Old 06-26-2014, 01:33 PM   #27
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I'm not sure if you are being sarcastic or not. Everytime I have been approached about a job in California it has always been for less money. The big selling point is supposed to be the opportunity to move to California. They must get some takers.

When I graduated back in the 70s, I interviewed for several positions. The one around LA touted their charter bus that took employees to where they could afford to live and it only was a 90 minute ride. One position around SF talked up their program that put 4 single engineers in a 2 bedroom apartment so they could afford the cost of the apartment.

I took a job in Houston for an extra $25/month (not totally insignificant in the early 70s) and got my own one bedroom apartment for less than what my share of the 2 bedroom apartment would have been. I also avoided state income tax and other higher cost of living issues. I moved from the Seattle area so I definitely moved to a dramatically different climate.

I've certainly been to various parts of California and had some nice times there. I haven't been so overwhelmed with what I've seen to make me want to live there. If I was wanting to spend time there, I'd probably avoid the income taxes by moving my residency out of the state and rent condos on a monthly basis. I do understand that there's a lot of attraction to staying where you're comfortable with friends and family near-by. That's why I'll never drag DW out of Houston.
I think part of the equation is also home appreciation. Zillow shows a house we once owned in Texas valued at only 50% more than we sold it for decades later, so the home value has not kept up with inflation. Our house here cost twice as much initially, but has increased in value at double the rate of inflation. And property taxes on both houses are almost identical currently because of Prop 13 in California.
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Old 06-26-2014, 01:48 PM   #28
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So many people tout Prop 13 for low RE taxes, but the other side of the coin is that newcomers have to foot most of the bills. Public workers in CA are not cheap, particularly when we count their pension. And there's Mello-Roos too.

How long and how much higher do these new home buyers will bear? It's mind boggling.
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Old 06-26-2014, 01:49 PM   #29
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If you think the "living in California surtax" is bad, try Hawaii's!!!!!


You make a good point. Many areas around the country command a high premium: coastal California, Hawaii, the areas around DC, NYC, Boston, Seattle, etc... The situation in California is far from unique.

So, W2R, since Hawaii is number 1 on your list, would you be willing to pay the Aloha premium?
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Old 06-26-2014, 02:00 PM   #30
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I've lived most of my life in the Bay Area.

.....

I'm aware that there are many places in the country with lower housing costs, lower taxes. Haven't really looked that deeply into moving though.

The things that would get me to leave would be to get more space for less money and less congestion, because traffic around my neighborhood has increased a lot.
That's what did it for us. Earlier this month, we closed escrow on our home of 31 years in the Bay Area and went back south, to southwest Riverside County, where we purchased a 40-year-newer house with twice as much space inside and out.

We now have a pool, which we enjoy nearly every day, and we have plenty of wide open spaces around us. We paid cash for our new house and also were able to put a goodly sum into various accounts with what was left over. My current plan is to invest those funds to pay for any increases we may encounter along the way.

Unlike Rodi, we're not in Coastal California, but we are about 25 miles or so from the coast, so we get some of the same morning coastal fog as well as a great afternoon offshore breeze that comes through our area, which really keeps our weather pleasant, so far. (I hear July and August are going to be horrible.)

We took our Prop 13 basic assessment with us, but we will still pay a bit more in taxes, primarily for the local schools, which we don't mind.

Quality of life has greatly improved. So far every day seems pretty much like we're on vacation -- despite the unpacking that remains to be done.
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Old 06-26-2014, 02:00 PM   #31
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You make a good point. Many areas around the country command a high premium: coastal California, Hawaii, the areas around DC, NYC, Boston, Seattle, etc... The situation in California is far from unique.

So, W2R, since Hawaii is number 1 on your list, would you be willing to pay the Aloha premium?
Absolutely not! It is just too expensive there for me and I am not willing to make that tradeoff. The cost of living there moves it WAY down my list ( which, as noted in my previous post on this thread, purposely did not take COL into account at all).

In contrast, I would not want to live in CA unless it was much cheaper than living here, as I remarked. If it COL was the same everywhere, I would avoid CA but I would live in HI.
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Old 06-26-2014, 02:08 PM   #32
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I will say, once you are here, it is difficult to move anywhere else...even knowing you are paying the aloha tax....when I talk with my friends from Reno in December it reminds me why I pay for this...
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Old 06-26-2014, 02:16 PM   #33
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All this makes me wonder... Why do we want to stay again? Then I stroll through the redwoods and all is forgotten.
I know how it feels and get the math, having done a similar calculation (and seeing similar differences) for staying in the NY area vs moving. Once I left my job, however, I knew inside that leaving NY was inevitable.

It is good to have options and the ability to understand the trade-offs you are making.
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Old 06-26-2014, 02:27 PM   #34
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All this makes me wonder... Why do we want to stay again? Then I stroll through the redwoods and all is forgotten.
I strolled through the redwoods too, on my last visit. But then, there are the Sequoias, the redwoods in Northern CA, in Kings Canyon...

I guess I can live in CA, if I had a lot more money to stay out of populated areas. Just now look on the Web at Palos Verdes Estates in the LA county, as I remember driving through the area and seeing some nice, nice homes. They are $10M+ mansions, and there's this one that looks nice for only $1.7M. Not a mansion, just a nice home, but it is still way out of my budget of course.

Told my wife about this "deal", and she said "we don't need it". I said "what do you mean need it? We can't afford it". And she said, "Even if we have money, we still don't need it". Oh well!
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Old 06-26-2014, 02:39 PM   #35
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It's not just housing. Food and gas cost more here in California. But I wouldn't live anywhere else.
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Old 06-26-2014, 02:40 PM   #36
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I know how it feels and get the math, having done a similar calculation (and seeing similar differences) for staying in the NY area vs moving. Once I left my job, however, I knew inside that leaving NY was inevitable.

It is good to have options and the ability to understand the trade-offs you are making.
I am not sure yet we will be able to retire in California. If we can't, we would not mind moving back to the south and vacation in California from time to time. Neither one of us is ready yet to make a commitment either way (staying vs. going back). At this point we just want to keep our options open.
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Old 06-26-2014, 02:44 PM   #37
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It's not just housing. Food and gas cost more here in California. But I wouldn't live anywhere else.
I feel your pain...over 8.00 for a gallon of milk here...and if you go to the resort area, Ko Olina just 4 miles from me it is 11.00 per gallon....
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Old 06-26-2014, 02:50 PM   #38
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When I graduated back in the 70s, I interviewed for several positions. The one around LA touted their charter bus that took employees to where they could afford to live and it only was a 90 minute ride. One position around SF talked up their program that put 4 single engineers in a 2 bedroom apartment so they could afford the cost of the apartment.
This sounds odd. I lived In both LA and later Bay are during this period. In LA apartment buildings had big banners out advertising free first months rent. When I moved to Berkeley it was more expensive, but still not expensive. Your group of graduates must have been very poorly paid.

It is only fairly lately that some CA places, especially desirable neighborhoods in SF have become much more expensive than other areas.

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Old 06-26-2014, 04:09 PM   #39
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I'm not sure if you are being sarcastic or not. Everytime I have been approached about a job in California it has always been for less money. The big selling point is supposed to be the opportunity to move to California. They must get some takers.
I wasn't being sarcastic. I was speaking in general term. E.g, my megacorp's wage for employees doing a same job is different for California employee vs others. Have you checked SF's minimum wage? It's in double digit. Sure, you can find counter examples. But in general, wages are higher (no comfort for some, no doubt).
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Old 06-26-2014, 04:29 PM   #40
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On the CA wage differential.... My historical perspective as a tech worker. When I left San Diego in 1990 - the joke was that San Diego paid less, the balance was in "sunshine dollars". Qualcomm was a startup, General Dynamics was shutting down.

Later in 2001, when I moved back to San Diego in a job transfer - I did, indeed, get a wage bump over my Pennsylvania wages. About 18%. The eliminated that differential 2 years later - much to the dismay of a friend who transferred and didn't get it.

When I transferred - the HMO offerings were different - and a LOT lower than what I paid in PA. Almost two hundred a month less for family coverage.

They kept the NoCal wage differential - but slowly lowered it. It's down to 12% above the rest of the country. Looking at healthcare premiums, NoCal definitely paid more than SoCal for the same Kaiser coverage. (The rates were the same, nationally, for Blue Cross Blue Shield through MegaCorp.)

My division was sold to miniCorp - they are continuing the erosion of the bay area pay differential. But it's much more secretive - salary scales used to be available on the internal web with Mega - but miniCorp doesn't make the salary ranges/scales available. But I have friends who work in NorCal - and they've said they have to give smaller raises because of the compression/lowering of the pay ranges. And yes, people are leaving for greener pastures. Tech folks have no problem finding well paid work in the bay area.

Finally - a friend recently left his director position at Qualcomm to go to Google. He thought the double the salary would be more than enough. Despite selling their home here for well over a Million - they can't afford a home half the size, even with a budget of $1.5M. The wife is going back to work to help pay for the expected mortgage. Part of that is by choice - since they are insistent on being in the Palo Alto school district - very pricey.
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