The cost of living lie

[rooster]

I was actually thinking along those same lines when I retire. Alot of people would frown on Appalachia but in a place like SE Kentucky you can buy a nice home with 20 acres and a barn for 80k-100k depending on condition. I could sell my home buy one there and put 100k in the bank. And live in a very beautiful part of the country. I know of the drug problems there and your neighbors may have 6 cars and only 1 actually runs but there are also genuinely good people there also. It all depends on who you associate with. I just always wondered how people there respond to people moving there from cities up north. Kinda like I might if my new neighbors had California plates..probably with some apprehension. Anyone have opinions? I would like to hear them

This exact thought is what led me to this conclusion. I was looking at buying 300 acres in South east Kentucky for I think 200k in 2019 just before covid. Sell my place in indianapolis for a hefty profit and move from 1/3 acre to 300 for the same price.

 

[rooster]

A. Person B has been spending more money to do the same along with more taxes. To pay that $19k in property taxes will take over 1200 hours of that extra $15/ hr. But you won’t be taking home that money because of the local income taxes, the higher gas prices, the yearly vehicle inspections, higher registration costs etc.

I’m using the wage examples of 35 and 65-80 as an example because I know for a a fact that’s the on check pay rate for a union carpenter

Not 15 an hour.

 

[armalitesheepdog]

This exact thought is what led me to this conclusion. I was looking at buying 300 acres in South east Kentucky for I think 200k in 2019 just before covid. Sell my place in indianapolis for a hefty profit and move from 1/3 acre to 300 for the same price.

Exactly...how much would that cost in say southern Indiana? Probably a half million

 

[rooster]

Exactly...how much would that cost in say southern Indiana? Probably a half million

Zillow saw over a million

4000 S County Road 1175 W, Medora, IN 47260 | Zillow

4000 S County Road 1175 W, Medora IN, is a Vacant Land home.This home last sold for $51,000 in June 2022. The Rent Zestimate for this Vacant Land is $1,200/mo, which has increased by $6/mo in the last 30 days.

www.zillow.com

 

[Leadeye]

Living in the deep woods is relatively cheap, and fun if you enjoy it. It's like a perpetual camping trip. I can understand though if it's not for some people.

That Zillow price sounds pretty steep for a woods that looks like it was logged a year ago or so.

 

[armalitesheepdog]

Zillow saw over a million

4000 S County Road 1175 W, Medora, IN 47260 | Zillow

4000 S County Road 1175 W, Medora IN, is a Vacant Land home.This home last sold for $51,000 in June 2022. The Rent Zestimate for this Vacant Land is $1,200/mo, which has increased by $6/mo in the last 30 days.

www.zillow.com

Wow. Nice but very expensive.

 

[BigRed]

The solution is pretty simple. Don't like what you're being paid? Go work somewhere else that pays more. Or get a second job. Or start your own business.

Ten years ago I was in a dead end career being paid a base salary of under $30k annually. I quit to start my own side hustle and worked four jobs to get it off the ground. I looked for clients that would allow me to build up my own skill set. Eventually I started getting corporate contract work and built up my skill set even further. Within about two years I had more than doubled my annual income. Since then I've taken a full time corporate job because I found a company and gig that I love, but my salary is up close to four times from where I started.

Well done.

 

[bobzilla]

I’m using the wage examples of 35 and 65-80 as an example because I know for a a fact that’s the on check pay rate for a union carpenter

Not 15 an hour.

Fine, 30/hr difference is still 600 hours to JUST PAY THE PROPERTY TAXES. That’s almost 4 months of work to just pay those taxes. The mortgage will also be higher and so will the income taxes. CoL is a bitch on the east coast. I know several families that have moved from the greater NYC area and dropped to single income because they can afford the same life they had before on one income and the other can take care of the children.

You can bury your head in the sand and pretend it doesn’t exist but it does. It’s not so much a problem for people still working. It’s the fixed income people that it hurts.

Also, you will be taxed another 30-40% on real estate if you move out of state. In-laws dealt with that. Sold their house in jersey moved to Florida and lost about 30% of their profit because they were leaving the state.

 

[BehindBlueI's]

I think many of you are missing the point.

If person A lives in indianapolis area in a modest home in the 250k range (buys in 2021) working a trade ~$35 an hour or so

And person B lives in CA, NY,NJ (take your pick) working the same trade in the same type of modest suburban home for 500-800k (on a 50 year note bought 2021) making ~65-80 an hour.


In 20 years person A and person B both move to a small rural town in southern indiana. Who has more wealth?

If CA, NY, or NJ was so great they would stay there when they retire.

Go back to Adam Smith. The base wage for a man is his replacement cost. Basically what it costs him to live and to raise the next generation to replace him. Of course now that women tend to work as well, that replacement cost is split and we have tax money subsidizing non-living wages but we'll keep it simple for now. Let's just call the base wage X.

To rise above wage X, some factor must be present that makes the job either difficult to fill (ie, a training requirement as a barrier to entry) or the job must be unpleasant or dangerous. Nobody will mine coal for X if they can sweep floors for X because mining coal is dangerous and unpleasant work, comparatively. Doctors make more than X because not many people have the ability and opportunity to become doctors. Smith talks about a lawyer's wage including the potential wage of all the potential lawyers who failed to actually become lawyers.

So, what are the barriers to live in the big wage metropolitan areas on the coasts? Consider housing availability. If you can't afford to move there, you can't afford to go get a job there. If you have a family, does the local infrastructure include a public school that you're willing to send your kids to? If not, the costs of a private school will be factored in, or the opportunity costs of a parent home schooling vs doing something else with that time, etc.

Then, what's unpleasant or dangerous? Sitting in traffic for hours is unpleasant. Living cheek to jowl with your neighbors is unpleasant. Dealing with homeless people defecating in front of your house and stealing anything not nailed down is unpleasant. Etc. Some people don't mind, just like some people don't mind living in a tumbledown shack in the woods with no electricity, but to attract a large enough workforce you'll need to compensate potential workers to deal with that unpleasantness.

Basically, if an electrician in Mayberry RFD pays as well as an electrician in Dystopian City, nobody goes to Dystopian City to be an electrician until incentivized to do so. A wage above X is how that's generally done.

 

[BugI02]

Basically, if an electrician in Mayberry RFD pays as well as an electrician in Dystopian City, nobody goes to Dystopian City to be an electrician until incentivized to do so.

I approve of your plan to solve the problem of what to do about large cities. We absolutely need to keep the SALT limitation in tax structure

 

[HoughMade]

It is discrimination. If the cries are to pay man and women the same, then how is it any different that paying someone more because of where they live?

Um...because more government control generally isn't a good thing?

I read threads like this and them marvel when people wonder why socialism is so attractive to many. It's all central control.

 

[AtTheMurph]

We moved here from Northern Virginia about 11 years ago.
Wages are significantly higher there than here.
I find that my SS, and Half my pension give me the ability to live very well here.

Should SSI be based on location of the recipient?

 

[AtTheMurph]

Um...because more government control generally isn't a good thing?

I read threads like this and them marvel when people wonder why socialism is so attractive to many. It's all central control.

Central Planning has been an abject failure whenever and where ever it has been tried.

 

[Magyars]

Should SSI be based on location of the recipient?

I sure hope not.
Currently it's based upon your earned income over the years.

 

[AtTheMurph]

I sure hope not.
Currently it's based upon your earned income over the years.

So the flyover states are subsidizing the SSI payments from the coast states.

 

[Route 45]

Here's a fun calculator.

Cost of Living Calculator - Cost of Living Comparison Index Tool | Bankrate

Use this cost of living calculator to compare the cost of living between U.S. cities and determine if you will be able to maintain your current standard of living in another city.

www.bankrate.com

 

[Magyars]

So the flyover states are subsidizing the SSI payments from the coast states.

Negative. SS is paid for by the individual employee and the employer.
It's supposed to go into a fund and interest accrued.
Unfortunately our congress critters considered it a slush fund and pissed it away.

 

[Leadeye]

I can't imagine living in a big city now, I avoid them as much as possible.

 

[DoggyDaddy]

I can't imagine living in a big city now, I avoid them as much as possible.

Even as a kid I hated going "downtown" with Mom and Dad. Just didn't like all the buildings and concrete. Still don't. I'm not in the country, but at least I'm not "in the city".

 

[KLB]

So the flyover states are subsidizing the SSI payments from the coast states.

You pay SSI on your income up to the cap for that year. Anything over the cap doesn't count.

Each year, the federal government sets a limit on the amount of earnings subject to Social Security tax. In 2021, the Social Security tax limit is $142,800, and in 2022, this amount is $147,000.