For the past 10 years, traffic for the post, West Coast Living: Yes It Really Is Better, has been increasing. In the past, people landing on this post would come mainly from the East Coast. However, this year, I’m seeing more people coming from the Midwest and the South. Migrating to California is picking up steam now that the end is in sight for the pandemic.
The topic of migrating to California from the Midwest or the South is not a common topic in the mass media. Usually, it’s people from more expensive California trying to see whether it’s worth migrating to a Midwestern or Southern state to save money.
However, when the weather gets cold and people are locked inside for longer periods of time, it’s natural to long for warmer places to live. Instead of enjoying the great outdoors for only 7-9 months a year, why not enjoy the outdoors in California for 12 months a year?
When you can go skiing three hours away after a major powder dump and then play tennis in sunny 68-degree weather a couple of days later, perhaps spending more money living in a place like California is worth it.
Further, migrating to California sounds more appealing when there are more career opportunities that pay more money. After all, there’s a reason why the most number of billionaires live in California. Billionaires can live anywhere, which means living in California must have a special appeal.
Thoughts On Migrating To California
Although I am long-term bullish on the heartland of America, I’m noticing a slight change in sentiment happening due to the pandemic. Here is some feedback from readers living in Austin, Sioux Falls, Des Moines, and Jackson. They are all considering migrating to California for a better life. I’ve edited the feedback they gave during the heart of the pandemic for better flow.
The reasonings revolve around job opportunities, weather, diversity, children, and politics. With Joe Biden and Kamala Haris as President and Vice President for the next four years, more people want to live in states that are politically aligned with their philosophies. The same is happening in reverse.
California is the #1 state economy in America. California is also the fifth-largest economy in the world, outperforming Japan, Germany, and the U.S. GDP growth rate over the past five years. With so much opportunity in California, no wonder why more people are considering migrating to this western state.
Why I Want To Leave Austin, Texas
Sam, I’m currently living in Austin, Texas. I’ve been here for 10 years. I think it’s time for me to go. I make $170,000 as a software engineer and my wife works in sales. We can work remotely and we only have a dog. We are considering migrating to California for the following reasons:
There are only two months a year in Austin that are nice: April and October. Every other month is either uncomfortably hot or too cold. The humidity here is a killer!
Back in 2012, we broke a record with more than 69 days with a temperature of 100 degrees or higher. Your one or two-week “heatwave” of 80+ degrees a year in San Francisco would be a dream.
The traffic in Austin has been getting worse. Further, the cost of living is rising a lot due to the number of people moving to Austin from places like San Francisco. And most of the people coming here from The Bay Area are rich, white, men.
I figure, if I’m going to live in a more expensive city with lots of traffic, I might as well move to San Francisco or Los Angeles where I can get paid much more! In San Francisco, I should be able to make $250,000 a year.
Finally, Austin is still Texas. Texas is a conservative state with harsh drug laws and strict views about marriage and abortion. Such views go against our family values.
I Don’t Feel Safe In South Dakota
Although one can buy a really nice house in South Dakota for $350,000, my family and I don’t feel safe. South Dakota Gov. Kristi Noem (R), has vocally opposed mask mandates. She thinks masks are not effective against the spread of the virus and we clearly disagree.
If we can’t feel safe due to deeply ingrained beliefs about personal freedoms, then we feel it’s kind of pointless to live in South Dakota. Wearing a mask when we’re out in public is not a problem for any of us. Even our 4-year-old happily complies.
But when we see so many people out and about mask-less, it’s infuriating. We’re so close to getting a vaccine, I don’t understand why so many people are acting so carelessly.
I think it would be nice to relocate to a state like California where its citizens have a mask mandate and seem more respectful. It just seems like common sense. I make $150,000 a year and can work remotely. My husband is a stay at home dad to our two boys. But he does some handyman work here and there to bring in an extra $20,000 a yar. My boss says I’d get a 20% salary increase if I were to relocate to San Francisco.
Finally, it is not unusual for the summers here to climb above 100 °F several times a year. Winters are the worst with January high temperatures averaging below freezing and low temperatures averaging below 10 °F in most of the state.
The Downsides of Des Moines, Iowa
My family and I have lived in Des Moines, Iowa for 25 years. Go Hawkeyes! We like it here, but we’re thinking about moving to California for our daughter. I make about $120,000 a year and we have an office in Santa Monica, California.
But it’s hard to leave because the education system here is great with a 99% literacy rate. We also have the highest high school graduation rate in the country at about 90%. Bet not many people know this.
However, the winters often get below freezing, especially when you take the wind chill into consideration. You can get a lot of great steaks here, but not much else. It’s kind of a bummer if you are a foodie like Gavin Newsom.
The thing that makes us wonder whether it’s a good idea to stay in Des Moines is the lack of diversity. We are a white family living in a predominantly white city.
The racial makeup of Des Moines is about 82% white, 8% Black, 0.35% American Indian, 3.50% Asian, 3.52% from other races, and 2.23% from two or more races. We feel like we’re in this bubble.
We’re afraid the world will pass my two girls by given how competitive and diverse it has become. America doesn’t look like Des Moines. I wonder if it’s better to relocate to our office in Santa Monica.
Oh, and my wife and I are both Democrats. With Joe Biden winning the Presidential election, we thought it would be nice to move to a city and a state where we can openly celebrate for the next four years.
Des Moines is a quiet and inexpensive place to live. But we’re looking to change things up.
The Mississippi Governor, Tate Reeves (R) Is An Idiot
As a Mississippi resident, I’m shocked and dismayed Reeves along with Texas Governor Greg Abbot (R) would drop the mask mandate and fully open up the state as of March 2021.
We are only two months away until every American adult who wants a vaccine will receive a vaccine. To fully open up our economies right before full vaccination is completely irresponsible!
I had never though about migrating to California until I heard the announcement. Although California has plenty of issues and higher costs, the way state is balancing safety and economic is more pragmatic.
With roughly 40% of Republicans unwilling to take a coronavirus vaccine, even after all the testing and data, I’m not comfortable living in a Republican-dominated state any longer.
Arkansas Has The Lowest Vaccination Rate
In Arkansas, which has one of the lowest vaccination rates in the nation, with only about 33% of the population fully protected, cases, hospitalizations and deaths are rising. In fact, more than 99% of COVID-19 deaths are coming from unvaccinated people as of summer 20021.
The Good And The Bad Of California
Although COVID-19 cases and deaths have come way down in all regions in 2021 thanks to the vaccines, many people are still scarred from the experience. They won’t soon forgot how their politicians governed during the height of the pandemic.
I’ve lived in San Francisco, California since 2001. For the most part, I think the city and state provide for a high quality of life. If it didn’t, California wouldn’t have the largest population in America with ~38 million residents. I would have also voted with me feet and moved long ago.
Before migrating to California from the Midwest or the South, here are some pros and cons about California you should know.
Pros Of California
1) More career opportunities
2) More opportunities to make more money
3) Better weather in coastal cities
5) Sunsets and beaches
6) Well-regarded public universities, e.g. UC Berkeley, UCLA, UCSD
7) Plenty of professional sports teams, e.g. GS Warriors, LA Dodgers
8) Blue state if you are a Democratic who supports Joe Biden
9) Plenty of nature that’s well-protected, e.g. Big Sur, Lake Tahoe, Muir Woods
10) Nice variety of easily-accessed landscapes: deserts, mountains, coasts, farmland, rolling hills, giant misty forests, and volcanoes.
11) Entrepreneurial culture: general embrace of new ideas/tech without a lot of dogma or soul-searching, an openness to experimentation, and a willingness to fail.
12) More immigrant-friendly
13) Closer to Hawaii and Asia
14) Much lower coronavirus positivity rates
15) More networking and investment opportunities
Cons of California
1) High housing costs
2) Higher taxes
3) High energy costs (gas and electricity)
4) Bloated and poorly-run government with frequent examples of corruption and hypocritical politicians
5) Lots of traffic pre-COVID due to bad urban planning and a large population
6) Blue state and identity politics if you are a Republican
7) Poorly funded infrastructure
8) Natural disaster threats like wildfires, droughts, and earthquakes. Please make sure you have the appropriate amount of homeowners insurance, especially since prices have also increased dramatically.
9) Farther away from Europe
11) Densely populated in the major cities
12) More stress and faster pace of life in the major cities
13) Harder to live a normal middle-class lifestyle and raise a family
14) Stricter lockdown restrictions during a pandemic
15) Crime and homelessness in the larger cities
Things To Do Or Know Before Migrating To California
If you’ve made up your mind about migrating to California, here are my recommendations.
1) Come with a job.
If you are considering migrating to California, I encourage you to first have a job opportunity lined up. Unless you’re single with no debt, don’t just come out here with no job and expect to find something relatively quickly.
Competition is fierce in every California city. Despite the perception of a laid back atmosphere, many type-A people from great universities like to come to cities like San Francisco and Los Angeles for the best jobs. With so much competition, life can become unpleasant.
Without connections or a star-studded resume, it’s very difficult to just land a high-paying job you enjoy. Due to the high cost of living, what savings you come with will quickly be exhausted if you don’t have a job.
If you do have a job opportunity in California and are coming from the Midwest or the South, I recommend you accept. Despite the higher cost of living, you will likely have a greater chance to make more money and build more wealth in California.
Once you’ve made your fortune, then considering leaving if you no longer enjoy the state. Even if you don’t make a fortune in California, you can still go back much sooner if you don’t like it out here.
Most people leaving California are lower income and middle income people due to the higher cost of living in California. The people who are migrating to California mostly consist of higher income people.
2) Know the median rent and home price.
The biggest shock for folks coming from the Midwest or the South is the cost to rent or buy in California. San Francisco ($1.6M median home price) is the most expensive city in California followed by San Jose ($1.1M), Los Angeles ($788K), and San Diego ($650K).
Before buying, rent for at least six months to test things out. Renting is often cheaper than buying in the bigger cities, which means renting is also better value in the short-term. Once you’ve rented a place, spend some weekends driving around and visiting open houses in your ideal neighborhoods.
So long as you can spend less than 30% of your gross monthly income on housing costs, you are good to go. Spend any more and you’ve got to really be bullish on your income growth.
People migrating to California from the Midwest or South are the perfect candidates for my favorite real estate investing strategy: BURL. BURL stands for Buy Utility, Rent Luxury. The idea is to rent in an expensive city and buy in a cheaper city to earn higher cap rates. If you know you’d eventually like to move back to your cheaper city, BURL is the best strategy to follow.
3) Know your key state tax rates.
The California sales tax rate is 7.25%. This rate is made up of a 6.00% state sales tax rate and an additional 1.25% local rate. However, the San Francisco sales tax rate is 8.5%. The high sales tax rate is one of the reasons why I hardly ever buy anything in California. Buy things elsewhere and bring them over.
The average effective property tax rate in California is 0.77%, compared to the national rate, which sits at 1.08%. But don’t be fooled. You’ll likely have to pay a property tax between 1.25% – 1.5% a year on a much higher home price than in the Midwest or South. The San Francisco property tax rate is 1.25%.
Below are the latest California state income tax rates. The median Californian income-earner is paying roughly 6% in state income taxes each year. The threshold for paying a 9.3% marginal state income tax rate is quite low at $57,824 for singles and $115,648 for couples.
4) Learn about Hispanic and Asian culture
Roughly 39% of the California population is Hispanic and 15% of the population is Asian. The percentage of Asians is 36% in San Francisco.
To better assimilate, it’s worth learning as much as possible about various Hispanic and Asian cultures. Try to learn some Spanish, Cantonese, and Mandarin. If you do, you will make instant friends and have a better experience.
5) Learn about the history of California.
If you can read this Wikipedia page on California in its entirety, I’m sure you will be more knowledgeable than 90% of the population. Wherever you migrate to, it’s always a great idea to learn as much about the place’s history as possible.
Knowing a state’s history shows you care. You’ll be able to better understand where people are coming from and what drives people to do what they do.
I also encourage you to become familiar with our NBA and NFL teams. Californians are very proud of our championship heritage.
Focus On Income Growth To Get Rich
People have been coming to California since the 1849 gold rush to get rich. I don’t expect this trend to stop, despite the growing work from home trend. The desire to live in a big city will always be around. I fear how bonkers things will get again in places like San Francisco and Los Angeles after there is herd immunity from the coronavirus.
Migrating to Los Angeles or San Francisco is like focusing on growing income to get rich. Staying in a smaller city like Sioux Falls or Des Moines is like focusing on savings to get rich. It’s easier to grow your income to achieve financial freedom.
Of course, you can still significantly grow your income in a smaller city. However, there are simply fewer opportunities to do so.
What people who don’t live in California constantly get wrong is looking at housing costs in a vacuum. The main reason why housing costs so much is because incomes are so high.
If you are a college graduate who is offered a $120,000 a year job in California, take it! You can control your cost of living and save a lot of money if you’re willing. As a San Francisco landlord since 2005, I’ve seen plenty of six-figure income applicants willing to just rent a room for less than 10% of their annual gross income.
Just be careful. Once you make or have enough money to afford living in California, you may never want to leave again.
Migrating To California For More Opportunity And Lifestyle
Before migrating to California for a job opportunity in 2001, I spent 10 years living on the East Coast. Four years were in McLean, Virginia for high school. Four years were at an in-state public school in Williamsburg, Virginia at The College of William & Mary. And two years were in New York City for my first job in banking.
Once I got to San Francisco, I realized there was no way I wanted to go back to the East Coast. I even turned down a big two-year guaranteed pay package to relocate to New York City in 2010. I loved San Francisco for all the things I mentioned above.
However, if there was no job opportunity for me in California, I would have grinded things out in New York City, a city I also love. If I remained in NYC, I probably would have gained 50 pounds, lost the majority of my hair, and suffered from intense allergies every year.
In a big way, California saved my health and my sanity because the work life balance culture is better. With less stress and better health, perhaps I may even live longer. Who knows for sure. The one thing I’m sure of is that California gave me a better life.
Thinking Leaving California For Hawaii
However, after 20-years of paying California taxes, we’re thinking about relocating to Hawaii by 2023. We simply long for even warmer weather year-round and a slower pace life. I can run Financial Samurai from anywhere in the world. Honolulu is also cheaper than San Francisco. Most importantly, my parents live in Honolulu.
I’m tired of the California hustle. Everywhere I go, even at my weekly softball games, people are telling me about how much they’re making in XYZ stock. Just last week, a fellow softball player told me out of the blue he and his wife are making $700,000 a year, which is why they are buying a $2.6 million house. Cool. I’m trying to focus on fielding, not finances.
The YOLO Economy post-pandemic is real. I think the majority of us are tired of being cooped up. We want to spend more of our money on living a better life. We also want to spend our precious time more wisely.
If you’re very focused on making money, come to California. California is where dreams are made. However, once you’ve made your fortune, perhaps it’s time to leave.
Real Estate Investing Suggestions
If you’re considering migrating to California from the South or Midwest, you may want to hedge your bets. Come to California for the employment opportunities and lifestyle, but invest in the South and MidWest using my BURL investing methodology. BURL means Buy Utility (cheaper areas with higher rental yields), Rent Luxury (rent in high cost of living areas).
My favorite two real estate crowdfunding platforms to invest in the heartland of America are:
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eREITs. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most people, gaining real estate exposure through an eREIT is a smart way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. For those with more capital, you can build your own select real estate fund with CrowdStreet.
Both platforms are free to sign up and explore. I’ve personally invested $810,000 in real estate crowdfunding to diversify my holdings away from San Francisco real estate. Further, I want to earn as much 100% passive income as possible as a father of two young children.
I’m surprised at the number of comments related to California’s handling of the pandemic and praising it as opposed to that of other states. The response in the United States has been horrific everywhere. One only needs to look at China, Taiwan, Australia, and New Zealand to understand how pandemics can be controlled. If your primary reason for moving to California is to feel safer during a pandemic, then you are simply fooling yourself. You should be trying to relocate to parts of the world that truly have mastered pandemic responses. California’s response continues to be horrific as daily flights continue to arrive from India; the state has done nothing more than recommend quarantine for 14 days but with zero enforcement. These passengers are bringing the Indian variants to the state; an Indian friend of mine living in San Jose, just had distant relatives arrive in the US and after 3 days they tested positive for covid. When a flight arrives in Australia from India, all passengers face mandatory quarantine. There are many reasons for moving to California but pandemic response if not one of them. It would be like moving from the Bronx to South Chicago because the murder rate is lower.
Gee, higher taxes AND a bloated, incompetent government that wastes that money. Sign me up.
Being concerned about COVID is one thing. Making a serious decision to move, based on mask-wearing? Has this person been out and about lately? We just completed a multi-state trip through Arizona, New Mexico, Missouri, Illinois, Indiana and Michigan. Based on what we saw, I can tell you that South Dakota is not the only state that isn’t that thrilled about mask-wearing…
Even Fauci is talking about wearing masks seasonally — in great part to combat flu and other diseases besides Covid…
news.yahoo.com/mask-wearing-could-become-seasonal-150341963.html
At least California recorded a $75 billion budget surplus today. That was quite a surprise. Maybe the money will be used to support public schools, help the poor, and keep tax hikes at bay.
I knew I wanted to move to California when I was 18. I’ve been here ever since college and couldn’t be happier. So it doesn’t surprise me that more people want to move here too.
As always very interesting perspective. There was one lie that seems to be repeated from the left at this time. As an independent voter, both the right and left have been getting their vaccines. So to claim its political issue when its not is a lie. You have no data to back that up only repeating the media which is left. Please stop encouraging politics on the issue on vaccines.
Its tearing our country apart.
Data is from Johns Hopkins University and the CDC.
I think it’s always healthy to look at different perspectives. Just like it’s very healthy to travel internationally and speak another language.
We shouldn’t discredit the experiences of others. And if you’re willing, please share your background and where you live. That’s the goal. Thanks
Sam is showing actual graphs of opinions of people who said they wanted to be vaccinated or not. I hope that everyone gets vaccinated, but most Republicans at this time are of the type that followed Trump, and the folks at Fox News have not exactly been encouraging or talking about the importance of public health.
theguardian.com/us-news/2021/apr/27/tucker-carlson-fox-news-masks-biden-cdc
Hey Sam, great post man, thanks for all the effort you put in! So Austin is totally not worth it anymore – it’s honestly not substantially more expensive for housing in SoCal than Austin currently. Additionally, Austin is honestly so similar to California in terms of how people act and political ideology, the density of tech employees, ect. So you’re essentially paying almost as much as cali (but not state income taxes) and getting a similar type place without the great weather and scenery. I wouldn’t do it.
But other parts of Texas are really great. I moved 2 years ago from Orange County CA to Fort Worth and it’s been the best decision I ever made. I lived in the east bay also in the past. Part of my bias is that I’m a business owner with a warehouse and employees. I rent a warehouse for 2500 a mo here and the same space in Cali would cost twice as much. So that’s 30 grand right there. Income taxes for us if we had stayed in Cali would have been 65000. So just between office space and taxes, that’s 95k for the privilege of being in Cali.
I asked my wife, do you think california is worth 260 a day in extra costs? She said heck no. However, she does miss California and felt like she fit in better there since she’s a workaholic and a director at a company and here in Fort Worth, there’s not a ton of insanely motivated career women here. It’s a lot more traditional overall than California. But I happen to like it better here. The weather isn’t as good but that’s the only downside for me. I like the people better here – they are infinitely more laid back and less type a.
Everyone is a little less self absorbed and selfish (men and women always hold the door open for you) and superficial here than they were in orange county. Plus it always rubbed me the wrong way going to the store in California and at least half the cars in there are Teslas, Mercedes, BMWs, with a handful of bentleys or ferraris sprinkled in. That just seemed like a bazar world to me. I’ve made a ton of friends here and I just feel like I fit in better.
My wife has made a lot of friends too but she still slightly prefers California in terms of the people. Lastly, we both really like that we don’t have to be closet republicans any longer. We are both very moderate republicans and are not die hard at all. But in Cali, it feels like you get social shaming if you’re not a democrat. Anyway, all of that has just been my experience. I grew up in Irvine in Orange County and have moved around to a bunch of other places then spent 8 years in Cali as an adult. For employees who don’t earn more than 300k a year, I think Cali can be very appealing.
But if you have a business or make much more than that, you better be hiking in the mountains or going to the beach several times a week otherwise the cost ($260 every single day of the year for us) just isn’t worth the benefit. But there is less diversity here which I don’t like for once we have kiddos. But the people are less superficial which I do like for kids.
Thanks for sharing! Glad you and your wife like Forth Worth. Being able to make friends and plant some roots is what makes anywhere better.
$300,000 is an interesting household income. It’s something I’ve written about in the past: Why Families Need To Earn $300,000 To Live A Middle Class Lifestyle Today.
Texas does seem much more business friendly. But what about property taxes in Texas? As a real estate investor used to Prop 13 in California, paying more than 1.2% in property taxes a year that adjusts rapidly would be a bummer.
I think California is really laid back. The weather makes it so. But there are plenty of agro people in SF and LA for sure. Just got to choose who you hang out with.
Very interesting discussions! I remember when I was in the military, I went down to CA for 30 days for schooling. The weather and food were amazing and there was so much to do! The beaches were beautiful. But everyone complained about how expensive it was and how high the cost of living was then, just as they are now, 14 years later. While there is so much talk about people leaving CA due to politics, high cost of living, poorly run government, and quality of life (homeless people, traffic, crime), I am interested in how the Tax Cuts and Jobs Act has affected people’s decision to move, specifically the provision that SALT deduction is maximized to $10,000. As I understand it, this means people from higher tax states will be “double taxed” on any state and local taxes over $10,000 whereas before there was no cap on SALT deductions. I am surprised not more people are talking about this and was wondering about Financial Samurai’s take on this! I am an Oregon resident and this year I will surpass the $10,000 max deduction due to state income tax and my property taxes. As I understand it, CA is a higher tax state so this SALT provision of the Tax Cuts and Jobs Act will greatly increase tax liability for people. Again, I’m no tax expert but just wanted to point out the SALT max deduction does not make any sense to me!
Hey Sam –
“If you do have a job opportunity in California and are coming from the Midwest or the South, I recommend you accept. Despite the higher cost of living, you will likely have a greater chance to make more money and build more wealth in California.”
That is me! I just accepted an offer in San Diego, moving from Midwest. I used to earn 140k in midwest and am offered 170k in SD now. For a single guy, is this move few steps backwards in earning potential? The increase in base pay will partially cover the rent. But not other utilities and taxes.
I need to know how much gross pay is a great benchmark to live stress-free daily life in SD? Is it 200k? or 250k? I am far from it!
Again, 40 yr old single guy, no kids or GF etc. wanting to increase net worth from 0.4M to 2 M at least.
Thanks!
I’d say a big part of it is how big of a place you rent and what the new rent cost will be. As long as it’s not insane you should be ok in SD on that salary. You def won’t be high on the hog and you will be exposed to plenty of people earning a lot more but SD is pretty amazing. I’d say try it out and see how you like it. Even if you only stay a year or two, then 170k is your new benchmark which you can leverage to get a diff job somewhere else making a little more than that. Seems like a good move.
I lived in SD for over 10 years and I moved away from it in a heart bit. I’d rather take 140k in midwet than 170k in sd. 1. your state income tax will be around 10%, also federal taxes increased. 2. property taxes!, I’d rather take 1.4% on a 300k house than 0.8% on 650k house in SD. 3. you don’t get much land for your property, and often you’ll need to pay HOA (for life) and mello roos (30 years.) for new constructions. 4. Traffic is getting bad because most people from LA and SF are moving down for jobs, and people in Mexico or US are moving to Tijuana across the border for cheaper living and work in SD or shops there. 5. Gas, electricity, gas, water prices are all through the roof. Even if you buy electric vehicle, your electricity price will go up, and the state will always come up with ideas such as making you pay higher registration fees for Car battery, etc.
Rich people live in california because they can make more money compare to living in other states and they can write off on their taxes.
we are paying for the weather (ransom from the state), like SAM said, I’d only consider california if I have much higher than normal salary, or business opportunity or young and wants to party. California will always be a place to visit and not to live.
Were you able to profit from the San Diego housing market boom?
My wife and I have thought about migrating to the coast. For us, it would be Vancouver instead of San Francisco the only reason is to stay in Canada. However, San Francisco is a beautiful place we love to visit (was actually stoped there on our HoneyMoon). I actually went to University in Vancouver and then moved to Edmonton to get experience and planned to move back. As it appeared it would be easier to get experience in Edmonton and then go back and get a really good high-paying job in Vancouver. While I was getting the experience in Edmonton I met my wife and we are happy where we are now.
One item I found very interesting was how many times politics was referenced in reasons to move. I know there is a division but if people start to move due to politics it will have further repercussions. Think about how Trump already used red states vs. blue states. With that being said, I do hope Biden can start to bring everybody back together.
Vancouver is nice, however, I wonder about the job opportunities? The median house price is similar to SF’s, but the pay is much lower. I can’t name a single company that pays six figure for new graduates. Whereas making $100K+ is common here in SF for new graduates.
What would you guys do? And will you get bigger pay?
I don’t know of a single company that pays six figures for new graduates in Vancouver either, that is unless you have connections but it is not typical. That was one of the main reasons I moved to Edmonton after university.
If we moved to Vancouver I would continue to work in finance/IT and my wife would probably look for some sort of municipal job around legislation. I might get better pay, as there HQs there that will pay good money, but that isn’t even guaranteed and if I did it would not be significant. While my wife would probably be on par for salary but the house prices are much more expensive. So it isn’t something we are pursuing but it is something we like to think about.
What is intriguing to me is how people purchase real estate in Vancouver or San Francisco and have plans to retire there. That is something we may do as that makes sense financially and even if our plans change it is a great investment.
One thing I have looked at was how Edmonton has both cheaper houses and higher salaries, on average, compared to both Vancouver and Toronto. However, I have not run the numbers on if the appreciation of your house would more than offset the pay cut or perhaps your pay being on par. Have you done any analysis or have any thoughts on the appreciation of a house vs. salary? Of course, there are many downsides but it is an interesting perspective.
Sam, I’m glad you posted the marginal tax rates in CA. What are your thoughts on the very large gap between those earning $57,824 and $295,373? I have been making between $150k – $200k for the past several years in CA and I find this heinously punitive.
Born and raised in Los Angeles, live in Pasadena, just turned 40. This state is going to hell.
1. High crime, specifically robberies. Recently enjoyed a drive-by shooting and police chase in my “safe” neighborhood.
2. Homeless situation is out of control.
3. Let’s get back to taxes. Anybody in CA who lives in an area with more renters than owners knows all about voter-approved indebtedness. My property taxes far exceed the 1% of the value of my estimated property because renters keep voting for bonds supported by home owners like me. The public schools are among the worst in LA County and are dangerous, anybody with any money sends their kids to private school. So what am I paying for?
4. Lockdown BS – movie studios can still film and have catering but local restaurants can’t have outdoor seating? Give me a break. My gym of 20yrs had to close down. Also, thought about going to Death Valley to camp/hike this holiday. CAN’T because of state “stay-at-home” orders. In LA County, public libraries have been closed since March but Best Buy can operate successfully. Schools are completely locked down, teachers refuse to go back. Most pertinent to my life, HIKING TRAILS are closed because of the state/county claiming that they are “too narrow to enforce social distancing”. So Walmart can stay open but I can’t go HIKING OUTSIDE BY MYSELF?!
5. CA is anti-small business. Great if you have a tech job but what if you are a personal trainer or a hair stylist or a retailer, you are barely making it (and in Covid, you aren’t making it at all).
6. The most corrupt politicians outside of possibly NYC and Chicago. Most don’t even live in their districts (talking about you Maxine Waters!!!). Also, extremely strong unions (see above: why kids are still at home, because of the teacher’s union).
I truly hate this state now. Pre-lockdown I could justify the BS with a lot of the points that Sam made: great weather, can go to the beach/mountains/desert, lots of diversity (food, culture), great education opportunities (night classes at UCLA, Art Center, etc…), world-class museums but now, in lockdown, YOU CAN’T DO ANY OF THESE THINGS!!! And haven’t been able to do so since March. So I’m stuck at home writing angry responses to blog posts and playing video games. I can play video games in a lower cost of living state just as well as I can here in this hellhole…
You may say that lockdown is a once in a lifetime event but I could see this happening again and again. Whether the virus was natural or man-made, I think it is overly optimistic that this won’t ever happen again. And California has displayed such an appetite for authoritarian measures and the sheep that live here haven’t fought back so I could easily see them arbitrarily locking the state down for whatever reason. Why stop at covid? Why not lock things down if fire danger become too high? Poor air quality? {insert reason here}?
Sam, I love your blog and have recommended it to everyone I know but I can’t help but wonder if your (hard-earned) wealth provides you with a vastly different Californian experience than the vast majority of Californians…
I’m an optimist overall. Instead of focusing on the negatives this year, focusing on the positives. I think by the second half of 2021, things will be almost back to normal again.
As more people move out, the livability improves, which is really great. And maybe taxes will start going down if more big corporations leave.
I have really always been an optimist, whether I’m a Virginia, NY, or growing up overseas. There are so many opportunities every day. And so many people show me that so many things can be done.
I plan to take it easy for the next couple of years in California, pay less taxes, enjoy life more, and then hopefully moved to Hawai’i.
And yes, The taxes paid have been painful. But I think about it as a form of giving back.
IC and Luis have good points. I too am an optimist but – I am worried that California lawmakers double-down. Also, a lot of California voters think that the state is full, or two populated, so they like seeing people leave (but, they don’t think more broadly about what that means for budgets, etc). Also, many of the people leaving probably would vote for more business friendly and financially viable policies, so the departures might make more extreme views more mainstream.
But, I do hope cities like SF, which are going to lose a huge amount of revenue, realize they need to change.
Indeed. Everything is rational in the end.
Hi IC,
Bullseye regarding your comments. I’ve lived in SoCal since I was stationed in Camp Pendleton for three years and then when in the Reserves also drilled there for five years.
In my opinion, (due from being raised by parents who fled communism and had family members jailed as political prisoners – one for over 25 years) your penultimate paragraph. Forget the politicians, but look at what I call the “tiny tyrants” of state, county, and local health officials who now have the power to bring their respective population to their literal knees and all in the name of “safety.” With my family being from a communist country, I find the parallels striking with how Covid is being weaponized against the populace. I think you’ll find the Barrington Declaration a good read:
gbdeclaration.org/
Again, just like the communist “five-year plans,” the multitude of “tiny tyrants” will maintain lockdowns. Just remember that the lock down was to be in place for a couple of weeks so the hospitals would not be overwhelmed – look where we are now.
Oh, and the vaccine, some “issue” will occur to negate lockdowns from being lifted.
Best of luck IC.
Semper FI
Hi Luis!
Thank you for your service! I have never posted on any blog before but this article lit me up! Thank you for sharing your family’s experiences and for sharing gbdeclaration – I signed it immediately. I truly believe Newsom intends to extend lockdowns well into past the 1st part of 2021. I know a lot of people thought that if Biden won the election restrictions would miraculously be lifted but I thought the opposite- as you rightly say, the “tiny tyrants” have had a taste of absolute obedience and they like it. Looks like I was right as LA County just mandated a complete closure of all outdoor dining, again!
Back in April, they shut down the Rose Bowl loop because the city was concerned about social distancing not being observed (and all gyms were closed so a lot of people took to the outdoors). Pasadena PD actually drove around with bullhorns and would ticket people running BY THEMSELVES. One of my favorite hiking trails was closed early on during lockdown because the trail itself is “narrow” and leaders felt that social distancing couldn’t be observed. Additionally, more trails have been closed due to the severe fire damage we experienced this past Fall thanks in large part to California’s mismanagement of the forests.
Hiking is one of my true passions and I truly do not understand how small groups/individuals are at greater risk outdoors than at BestBuy. Somebody explain it to me, I don’t get it. Surfers have been arrested as well- explain to me how somebody on a surfboard is more pestilent than 2 people filling up at a gas station next to each other. The cynical part of me wonders if this is a cash grab by state employees who are now paid to sit at home. And within the private sector, there are egregious abuses of federal and state money where companies are allowed to bill without performing any services- a cost which is passed down to taxpayers!
Just remember how many “temporary” taxes you may or may not have voted for in the past which soon become permanent. And as you rightly state, weren’t we told “3 weeks to flatten the curve”? Yeah right. The government rarely reduces their power voluntarily….
Get outside, go surf and hike–pretty sure no one is going to stop you. Politicians can say what they want on TV and put policies out there, but very few local jurisdictions are going to interfere with your outdoor activities.
The random surfer or hiker arrested by some bone-headed enforcement agency isn’t the norm. Trust me, there are thousands of us out surfing and hiking all week long.
I wouldn’t let these few random cases and temporary rules deter you from your true life passions.
Really? I’ve been turned away (thankfully not ticketed) three times. Once in the forest, once at the beach, and once at a local park. I guess I’m just unlucky…but I really want to go snow shoeing so I’m planning my next civil disobedience. ; )
And I have a final comment. So people can “protest” in large numbers but it’s not safe for me to hike or for my Mom to go to church? Give me a break!
Power corrupts and absolute power corrupts absolutely…
Let’s be honest. You are never going to leave California. All you like to do is complain. 10 years from now, you’ll still be in California enjoying all the state has to offer, but complain.
Complainers are never happy and satisfied with what they have. Deep down, you know this, but yet you refuse to do anything to change your life for the better. That is sad.
You don’t know me and I find your post highly insulting and rude which, let’s be honest, was your intention. Plus I pay extremely high taxes for the “privilege” of living here, I have few deductions as a single non-parent, and subsidize many state/local initiatives that I do not personally benefit from. CA will miss my tax dollars and if they are able to pass their latest brilliant idea of taxing people up to 10 years after they have left the state, well obligations be damned I will get out of here before that law is effective.
I’ll be happy to write a guest post here once I’m satisfied my elderly parents are taken care of and I can move on (or CA successfully finds a way to tax people after they have left the state in which case I will accelerate my timeline).
What is the benefit to state governments to shutdown? Name a single benefit economically? Less income, means government pension losses and government furloughs and layoffs eventually. They need those sales tax dollars and business property taxes to keep the books balanced.
Sure, those who think it’s all about control can say it makes sense. But what does control really get you? Newsom might get recalled because of these lockdowns… I’m sure he doesn’t want that headache.
I’m not for extending lockdowns if it’s no necessary. But they aren’t going to be able to plug state budget holes with higher taxes on an out of work population. So your logic that they want to extend lockdowns doesn’t work..
I agree with your statements- you’re right, it doesn’t make sense. However, I’ve lived in California long enough to personally experience many of the nonsensical, short-sighted positions that CA politicians take that end up costing the state dearly in the future. I remember when Gray Davis was recalled and one can argue he didn’t do nearly as much damage as Newsom. Also, I really don’t think CA politicians make any decisions with the long-term in mind but they do so love control….
Sam mentions in his article that people leaving the state could result in higher quality of living for those who remain. Well, I suppose if you are retired and live off of your investments that could be true but people/companies leaving are taking their tax dollars with them. I think CA will experience a massive budget shortfall in 2021. I wonder if they expect to make up the difference via tax hikes on the rich/middle-class and corporations? But at some point, there won’t be any money left to tax.
I don’t believe that shutting down benefits state governments economically and I am not proposing that politicians are even considering the economic catastrophe they are courting with continuing to extend lockdown. Why did AOC discourage Amazon from having an HQ in NYC? Do any of these people think about economics or the future? Doesn’t seem like it to me. All of modern American governance has been about robbing the future to pay for the present.
Having said that, you said my “logic that they want to extend lockdowns doesn’t work”. I didn’t say it was logical.
What are some states you think will have a budget surplus in 2021 after the pandemic is over?
Not sure- where do you think? I’m highly interested! Possibly Texas with so many companies moving there. I like good weather just as much as anybody but I work 60hrs+ a week so honestly, I can work and play video games in Dallas just as well as I can in LA. And perhaps retire earlier so I can just camp/hike all of the time, all over the world, wherever I please. : )
Unless of course lockdown becomes a recurrent theme…
Got it. I’m excited that you are taking action and moving! So many people just complain and years later, end up doing nothing about a suboptimal situation.
Do you have kids as well?
I’d love to get some feedback once you make the move. What is the ETA for relocation? A guest post about the logistics of moving etc would be great too.
I am single, no kids but unfortunately I have elderly parents that I must take care of so I will be stuck here for a little longer. Most of my friends have already left CA to go to Texas, Colorado, and North Carolina and they are all happy with their respective choices (and these are people who were born and raised here like myself). I like the beach but I like the mountains even more so my fantasy list in descending order is Montana, Wyoming, Utah (would be ranked higher but I like to drink and I’m not religious), Idaho, Nevada, and Colorado (would be ranked higher but the state seems to be following CA into the abyss). Oregon used to be on my list but I don’t want to live anywhere that has autonomous zones.
One of the things that I would have to overcome would be missing Asian culture. I studied Chinese and Japanese in college, grew up in the San Gabriel Valley, and home to me has always meant signs in Chinese + mountains. I think I would have to move to Vancouver, Canada to get that same feeling. Also, I would miss the international exposure I currently get in Los Angeles. I recently took a road trip to Las Vegas with some colleagues and I was the only person in the car who was born in the US. I’ve found that people who have immigrated here often have a valuable perspective on various things.
My job is location-independent but I must live in the US and live close enough to an airport as frequent travel is required once Covid-restrictions are lifted. I’m a little tempted by Georgia as I have many colleagues there and they love it but I’m not a fan of humidity. The only state that I immediately discarded was Washington DC, because screw those people. : )
I’ll let you know if/when I finally escape and would be happy to write a blog post. The most interesting thing to me would be how much I would financially come out ahead because my base pay would likely be reduced by a geographic move but the bonus potential would remain the same. I had a colleague who was paid his CA wage in CO with state income taxes at 2%! He was able to buy a very nice house, wife could stay home, and support small children- something even with his good salary he could not do in LA…
Well, I suppose the grass is always greener but covid has really made me question stubbornly staying in CA…
Hi Bluestater,
Travel to countries, if you can, that are socialist/communist. The bureaucrats in charge don’t care about budgets, government furloughs and layoffs. They have the power so they don’t need the tax revenue.
As for the lockdowns, in my opinion it was a trial run that wildly exceeded their expectations in how pliant we’ve become as a people. More to follow…
Another motivation of the tiny tyrants is their obsession in punishing their perceived enemies. I think part of the reason for the lockdowns was to annihilate the small business owner – the ones that can’t work from home. Those individuals don’t need local government, in most cases, the local bureaucrats are an impediment. And, many of government employees know in their heart of hearts they could never make the kind of money or run a business. Their government job (23 million and counting of federal, state, county, and city employees) will be the pinnacle of their professional development as compared to the small business owner – most who built something from nothing. In short, Envy is at the root of these punitive dictates.
Again, just look at history. A classic example was the Stalin’s decimation of the Kulaks – the wealthy peasants. Or, the Khmer Rouge in Cambodia
I recommend you read Camp 14, Harvest of Sorrow or if you want to watch a movie, see “First they killed my Father.”
I hope I’m wrong but history bears otherwise. However, all is not lost. There are many things you can do in case the situation deteriorates. Just a couple of suggestions, first be in the best physical condition possible and don’t be in debt. Also, avoid danger – don’t poke the bear.
Well, I hope this gives you an understanding regarding man’s lust for power and how it’s manifesting itself like never before here in the US.
Semper Fi!
Spot on Luis- great post! These people don’t care about budgets- they can tax/borrow their way out of trouble (although I suppose eventually you end up like Venezuela). You explained expertly what I was attempting to convey in my original post and thank you for the book recommendations.
I have been reading this blog for a long time and I find it funny the author listed Joe Biden as a positive. The high income earners will have to pay more taxes, however, it is politically popular to raise the taxes against the extremely wealthy!
taxfoundation.org/joe-biden-tax-plan-2020/
Why wouldn’t Joe Biden be considered a positive for California if 65% of the California voters (~11 million) voted for Joe Biden? Kamala Harris is from California as well. These are just facts as California’s electoral votes went to Joe Biden. What am I missing?
It’s similar to saying Joe Biden is a negative for residents in Texas, South Dakota, and Iowa.
All politicians, but especially Democrats, have learned how to get people to vote against their own self-interests. Even high earners don’t necessarily understand math. I’m a high earner but I do my own taxes so I really understand how much I am paying (only deduction I get is mortgage interest). In CA, every dollar over $48k for a single filer is taxed at 9.3%. The effective tax rate for people earning $70k in CO is 3.82%. Also, gasoline and energy are taxed heavily in Los Angeles and restaurant food costs more than the equivalent in a place like Nevada. Lastly, vehicle registration for my 2016 SUV is $320 (and insurance is high!). I used to wonder how people in Alabama could own like 10 cars and then I found out car registration was $23…
Frankly, REALLY wealthy people (like Bezos, Trump, etc) don’t pay high taxes in comparison to their overall wealth. The tax code is extremely punitive towards high earners, which is why people like Joe Rogan moved to Texas and Tiger Woods moved to Florida. They still have to pay high federal taxes but clearly moving to a state with low/no income taxes is highly beneficial.
Even in hell, I mean LA, you only have to go 1 county over to pay 2% less in sales tax. Sales tax is north of 10% in most of LA County but you can go to Ventura County and pay 8%. They’ve cracked down on people buying cars in Ventura but you can still go buy a big screen TV, save a couple hundred dollars, and spend 45min more in the car.
Speaking of drive-bys, I was almost shot in the head by an AR-15 a couple of years ago while in a business meeting in Arcadia. I was sitting next to a window facing Great Oaks Blvd. when I heard a truck rumble up to the light, then the shot came over my shoulder. The bullet went 1 foot directly above my head. 1 foot lower and I would no longer have a head. The bullet went across the room and lodged in to the wall. 7 LA County Sheriffs came out and questioned people around the area but it was too little….too late. Now, 4 years later, with Communist DA George Gascon now in place….they would not even bother coming out.
Fk LA. I am out of this Socialist Hell Hole in less than 60 days after 20 years here.
Glad you’re fine. When and where do you plan to go?
I worked my way from growing up in Tulsa, Oklahoma to living/working in the Bay Area. Growing up in the middle of the country, the success dream for many includes living on the coasts. I dreamed of some day living in California.
I moved to Colorado Springs for college. Married a girl from the Bay. Mostly love; a little strategic knowing where the family roots lead to. After graduating, we moved to Denver to start our careers and we bought a fixer upper in 2011 which exploded in value. Then last year, we finally rolled that equity into a new build in California.
I couldn’t be happier out here. The increase in income has significantly made up for the cost increases. I’ve never felt more well off. We’ve never invested more in retirement accounts. Nicest house we’ve both ever lived in. I bought a convertible and visit the beach twice a month. We drive or take cheap short flights to other parts of the state for three day weekends. Prior to the pandemic, my commute wasn’t any worse than my Denver commute. Both my wife and my main negative of living out here has been people seem very close minded compared to Denver. At work, people talk over each other and don’t listen to each other’s ideas. People disregard others very easily, both at work and in public daily tasks. Hold the door for someone at a store so that it doesn’t hit them in their face after your entrance and they will be very confused by your basic kindness. Also the racist comments people are willing to make to each other feels even worse than it was in Oklahoma. However, I was young in Oklahoma so I wasn’t privy to adult conversations. Still a shock though.
Denver my negatives were jobs expected so much for what felt like too low of pay for the increasing costs of living. I’d get the winter blues every January through end of March. Hailed all the time in the summers damaging our vehicles. Traffic is bad. Nobody will zipper merge or let anyone in front of them. Commuting is mostly along i25 and took an hour and a half to get home every day just across town. Add another hour when it rains and another two hours if it’s snowing. Traffic to and from the mountains to hike or ski is also stop and go. Becoming very California in politics. So felt it was time to stop living in “Calirado” and move to the real deal. I’d still buy a retirement second home in Vail, but Denver is not a place I’d want to spend my working years.
I am having a tough time with this article and, more so, the commentary/inconsistency with previous articles.
My husband and I make a bit over 1 million/year with only the potential for growth and have considered a move to California for the weather, hiking, proximity to close travel. Though we cannot work completely remotely and it would require some travel back to where we work it would be doable. Even on a 1million+ income per year we cannot justify how much housing is and feeling house poor. If I remember correctly, you once posted an article about living in NYC on a 1million+ salary and how much it didn’t make sense if you wanted to save money. Why would this be any different if your compensation can’t even come close to 1million+ a year.
After watching the housing market for sometime, even with the current low mortgage rates, a house that we would consider decent, which is a 1500 square foot fairly redone 3 bed shack, is 2million+. Of course the areas I am speaking of are on the coast. Something that would be around 2500-3000 square feet easily puts you in the 3million+ range.
How on earth can someone who makes 300-500k a year afford anything remotely close to this on the coast when decent 1 bedrooms are +/- 1million? Even if they could swing it, why would this even remotely be a smart financial move? Could we afford a 3+ million house on our salary, yes. Would it make any financial sense, most likely not.
Would truly like to hear your thoughts on this.
Most hiking trails are closed because of Covid. I haven’t been able to hit my usual mountains/trails since February. Was planning on going to Death Valley for Christmas to hike/camp. All campgrounds and RV hookups are closed due to the governor’s “stay at home” mandate. Covid may be a once in a lifetime event but it may not, so keep that in mind if you enjoy the great outdoors- because you won’t be enjoying them here during lockdown.
IC – I hit the send button to fast. The penultimate paragraph of your original article is on the money. Good luck to you. You seem solid. Semper FI
Love all your articles. I find this post interesting that all the replies were moving for political reasons, not necessarily financial reasons. They all quoted weather or traffic and then let the cat out of the bag. They want to live in CA, as the epitome of their Political beliefs. Seems contrary to all of the financial Samurai articles I have enjoyed reading over the years.