One of the best ways to increase your chances of making more money is to move to a city that has a high number of high-paying jobs. Ideally, you should secure a high-paying job offer first before moving to one of these cities. Otherwise, it may be tough going given the higher cost of living in the highest-income ranked cities.
Even though working from home is more prevalent post-pandemic, if you're still early in your career, working from home is a career limiting move. When you're in your 20s and 30s it's best to be in the office networking so that you have more people pulling for you as they ascend.
Let's look at the latest income ranking by metro city according to the U.S. Department of Commerce.
City Metros That Pay The Most Amount Of Income
Below is the list of the highest income city metros as of 2021. The top five highest income city metros are:
- San Jose-Sunnyvale-Santa Clara, CA
- Bridgeport-Stamford-Norwalk, CT
- San Francisco-Oakland-Berkeley, CA
- Boston-Cambridge-Newton, MA-NH
- Seattle-Tacoma-Bellevue, WA
The top ten highest income metros are:
If you want to make a lot of money, you might as well look for jobs in one of these top 10 income metros.
Personally, I'm biased towards San Francisco since I've lived here since 2001. It's the metro many people, including the media, love to hate given its weather, high cost of living, and tremendous wealth creation over the years.
The amount of high-paying jobs are everywhere in San Francisco. In addition, with the artificial intelligence boom happening, there is going to be some serious wealth created in the San Francisco Bay Area over the next decade or two.
If I had had more money when living in New York City from 1999 – 2001, I would have enjoyed it even more. New York City is truly the best city in America for six months out of the year.
Strong Staying Power With Most Of The Highest Income Metro Areas
Six of the top ten highest income metros in 2021 were ranked in the top ten in 1980. Therefore, one could say high-income places 40 years ago were able to build upon its positive network effects. Meanwhile, low-income places 40 years ago are still relatively low-income today.
This might be akin to the rich staying rich and the poor having difficulty getting out of poverty due to structural issues. However, staying poor is not an inevitability!
The rise of Fayetteville-Springdale-Rogers, AR (from #107 to #10), Austin-Round Rock-Georgetown, TX (#55 to #9), and Boston-Cambridge-Newton, MA-NH (#31 to #4) are particularly impressive.
In retrospect, betting on the Boston metro in 1980 was pretty obvious.
I remember visiting in the early 1990s and wondering why Boston was so cheap compared to New York City, despite having the same dreadful winter. With its world-class universities and lower cost of living, it seemed like an inevitability Boston would one day catch up to New York City.
Here is the net worth required to be considered wealth in many cities.
What Are The Next Top Income City Metros?
The billion dollar question is which are the next metro areas to surge up the income rankings chart?
Northwest Arkansas, Provo-Orem, Austin, Nashville, Charleston, Milwaukee, and Raleigh look like some of the most promising city metros. Job growth and income growth are strong and their cost of living is relatively affordable.
Charlotte is already a finance center, why can't close-by Raleigh be one too? While tech seems to be growing rapidly in Austin. Once a metro has job growth momentum, the momentum tends to continue. More jobs attract more businesses. More businesses attract more infrastructure. Better infrastructure attracts more migration and so forth.
If you're curious, here are the incomes required to afford a median-priced home in the top 50 cities. There is a high correlation with high home prices and high incomes. Hence, if you can work remotely for a company based in a high-income city and live in a low-cost city, you're going to save a lot of money.
The Key To Higher Income Growth Is Technology
The chart below highlights which metros outperformed since 1980 (above the straight yellow line). Since 1980, the biggest driver of income growth looks to be technology followed by finance.
The best-performing stocks over the past several decades have mostly been tech companies such as Apple, Google, Microsoft, and Amazon, all of which are based in the San Jose, San Francisco, and Seattle metros.
The development of the finance industry was also key to boosting incomes in the Bridgeport, Boston, and New York metros. From leveraged buyouts to junk bonds to mortgage backed securities to the creation of enormous active funds, finance has made plenty of citizens wealthy since 1980.
Finally, with the ever-increasing size of the government, it is no surprise that the Washington-Arlington-Alexandria metro continues to be one of the top ten highest income metros for more than 40 years in a row. Like inflation, the government's growth is mostly unstoppable.
Logical Conclusions If You Want To Get Rich
The data from the U.S. Department of Commerce show that if you want to get rich, do the following:
- Get a job in one of the top-income metros even though the cost of living is higher
- Work in finance, technology, or for the federal government
- Work for as long as possible
- Invest in real estate in the top income metros as winners tend to keep on winning
- Look for real estate investments in up-and-coming metros (18-hour cities) with the highest job growth
- Relocate to a lower income metro with lower cost of living once you're experienced or want to retire
My Income Journey In Two Top Income Metros
I spent my first two full-time work years in New York City and the next twenty-two years in San Francisco so far. I am pretty confident that if I had stayed in New York City, I would have continually made a healthy six-figure income as my career progressed.
If I was still working in finance today, after twenty four years, I assign a 65% chance I'd regularly be making over $1 million a year. I also might have a pot belly, lots of grey hair, TMJ, and chronic lower back pain. But at least I'd be rich!
Although hard work and skill are involved in getting rich, putting yourself in the right place to maximize your chances of getting rich might be even more important. There are plenty of regular people in New York and San Francisco who have gotten incredibly rich just by joining the right firm and sticking with it.
You could be the smartest person in the world, but if the best company in your city doesn't even have a billion dollar market cap after 20 years, you might never get into the top 1%.
Reader Questions And Suggestions
What do you think will be the next top ten income metro? How important is it to live and work in a top income city metro if you want to get rich? What do you think is preventing people from moving to top income metros?
Making a high income and investing in real estate in a high-growth metro is a great way to build more wealth. Check out Fundrise, a vertically integrated real estate investor that predominantly invests in residential and industrial properties in the Sunbelt. The firm has over $3.5 billion in assets under management with over 500,000 investors.
Another great private real estate investing platform is Crowdstreet. Crowdstreet offers accredited investors individual deals run by sponsors that have been pre-vetted for strong track records. Many of their deals are in 18-hour cities where there is potentially greater upside. Crowdstreet is a solution where you can build your own select real estate portfolio.
Personally, I've invested $954,000 in private real estate since 2016 to diversify my exposure and earn more passive income. Both Fundrise and CrowdStreet are affiliate partners of Financial Samurai, and Financial Samurai is currently invested in Fundrise.
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I’ve been saving 60% of my income since 10 years ago. At age 29.5 I just moved out of my parents house. I’m having a hard time deciding if I save 50% or 40% of my income
Any advice? I make $200K a year before taxes living in the LA suburbs but now that I’m paying rent it’s much more difficult saving more than 50% of my yearly income.
Should I move to New York? Or San Fran? I work in corporate finance
Congrats for saving so much and moving out of your parents house!
I think you should go where the best job opportunities are, continue to save 50% or more by living frugally, and do things you couldn’t do while living with your parents. Enjoy the new adventure!
Related: The Bank Of Mom & Dad Strategy For Buying A Home And Having A Family
I’m so thankful for a living in San Francisco. It is the most beautiful city in America. San Francisco gave me the opportunity to accumulate my first $10 million before the age of 40. Only New York City can rival San Francisco in terms of income growth and opportunities.
But the fact that San Francisco also has the best food, the most temperate weather, amazing culture, and the best outdoor activities is just mounds of cherries on top.
Sure, San Francisco also has pockets of crime and poverty, like every city. But that’s just city living for you.
Now, with artificial intelligence booming and so many six figure job opportunities, a new crop of workers will likely get rich too.
San Jose is a boring town in comparison. It’s also got good income opportunities, but it’s so much more dull, you might end up bashing SF online and to anyone who will listen due to jealousy.
There’s a reason why people from all of the world come to visit, San Francisco, and not San Jose.
Yeah, San Jose has no character or personality. It’s just an urban sprawl.
I would not want to raise kids in San Jose.
Instacart IPO, another big win for San Francisco. $10+ billion market cap. Incredible!
The San Jose metro is without a doubt the best place to raise a kid in the country due to the combination of jobs, weather and a wide variety of mostly competitive and well staffed public schools. SF has way more private schools for a much smaller city because the public schools in SF are garbage. SF has been run by liberal aristocrats for some time with little focus on crime prevention whereas SJPD at least has the balls to crack heads as witnessed by their latest payout for roughing up some BLM demonstrators. San Jose has been run for generations of Bellarmine Prep grads (I am not Catholic nor did I or our kid attend Bellarmine). SJC city officials talk a big liberal game but govern very conservatively. SJC is by far the most well run large city in the country, with a great and convenient intl airport, and the only big city where a mayor took on public pensions directly.
Some of my friends who couldn’t afford to live in San Francisco moved to the San Jose area. But they all say it is really boring and sleepy city. All of them wish they could afford to live in a nice house in a good neighborhood in San Francisco.
Sacrificing lifestyle to save money is not something I am willing to do to go to SJ. But it’s true that if you can’t afford San Francisco and have to live in the worst neighborhoods, life is not that great. But that’s a much the same for all cities.
I’m glad SJ is more affordable for you to raise kids. But don’t worry about the many people who can afford to live in San Francisco. I’d just let it go if you can’t or try and get a better paying job if you long to live in SF so much.
Oh wow, I kept looking for NYC in the top 5 so I was surprised to see it at number 7. I totally get San Jose-Sunnyvale-Santa Clara and San Francisco-Oakland-Berkeley in the top 3. Number 2 Bridgeport-Stamford-Norwalk was a surprise to me, but I’m less familiar with the east coast nowadays. Great insights!
I agree with your estimates on Austin and Raleigh being the next up and coming hubs. Neither of those areas appeal to me in terms of lifestyle, but a lot of people love those metros and I know a lot of companies are already there or are in the process of relocating/expanding there.
We spent a week in the Fayetteville, AR area for vacation and had a lovely time. It is warm, green, college educated, full of lakes and under the radar of many people looking for sunbelt living. Northwest Arkansas is on our retirement destination short list.
Isn’t Fayetteville in the middle of nowhere? How does that work for 10th highest income?
Fayetteville is the hometown of the Walmart family and is probably responsible for the high numbers. It does feature a lot of outdoor activities that appeals to the younger, hip crowd, and is quite literally is the bicycling Mecca of America. They hold several events around the town and have a great participation rate. The other 2 towns are just North of Fayetteville along the highway and are quite beautiful. The entire state boasts of some beautiful camping, hiking and fishing spots in the country.
I think it’s the contractors and vendors to the federal government that are making the big bucks in the DC metro area, not the federal employees.
Contractors are derivative of the federal government as around half of the work of the Govt is contracted out. Defense contracting in particular is very lucrative. DC area also has tech hubs. You are correct that federal employees don’t get paid the same as tech jobs, but mid career pay is above average even for the DC area.