I'm not sure I follow. Assuming the $1 million is post tax, it equates to $250,000 post tax and nearly entirely disposable income. Compared to, say, someone making $200,00 post tax and spending only 25% of that on rent it is strictly better. The point that the above commenter is making is that if the percentage of income spent on rent is higher, but the purchasing power adjusted income is higher it can cancel out.

I'm not sure what transportation has to do with this. Someone could increase their commute time to reduce rent, but that's the case regardless of income.

I think he's saying that as absolute incomes get higher, commuting cost as a percentage of income drops, because commuting cost is largely fixed regardless of income. And so it makes more sense to live in a low-COL region and commute to a high-COL region.

For the average person, flying to work every day is unrealistic. If you are making $1M/year, it suddenly becomes very realistic. Same day roundtrips between SFO and Seattle via coach are about $200 when purchased 3 months out. Times 200 workdays/year, that's only $40K/year. You end up way ahead financially buying in Seattle and commuting by plane to your job in SF, if you're willing to stomach the ~6 hours/day of commuting time.

Then if you don't want to spend an hour and a half in the terminal, you can fly private jet. Private jet time apparently runs about $5k/hour. At ~600 hours/year, you're looking at about 3 million a year to commute by private jet from Seattle to SFO. Still out of your price range at a million in salary, but quite doable if you were making say $10m, and your commute time isn't much worse than sitting in traffic on 101 between Google and the Marina.

Replace Seattle with Las Vegas and all 3 of (housing, flight time, expense) get better. Round-trip to Vegas is about an hour and a half; coach prices go as low as $59 and private jet prices would be about $1-1.5M/year; and houses can be had for $200K, freeing up lots of money for flying.

There are a variety of private jet subscription offerings popping up, including Surfair: https://www.surfair.com/us/membership-pricing/ That one is only $2k/month for unlimited trips between a few locations in California. I don't know how restrictive their scheduling options are, though (i.e., could you actually commute daily with the service?).

Yes you can do daily. Although they've recently reduced their flights by quite a bit so now some days/location combinations are no longer available.

If you don't mind missing a flight now and then, you can shave down the time waiting in the terminal quite a bit. Flights run constantly, so you can just take the next one. Uber is a big timesaver too, as you can walk out the terminal and get picked up / dropped off and no futzing with parking/renting.

Why would you commute for 6 hours for $200 when you could stay in a hotel during the week? What's the point in going "home" to sleep?

The thought-experiment that started this thread assumes that rent in SF would reach $750K/year if salaries were $1M/year. Hotel rates are unlikely to stay at $200/night if rent is $750K/year. If they rise proportionally, expect hotel rates of ~$4000/night at that price level.

> Why would you commute for 6 hours for $200 when you could stay in a hotel during the week?

Tax residency.

Is it better?

Consider what happens if you lose that job. How much money do you need saved up to live the next 6 months in both scenarios?

If I pay $750K/yr, I need $325K saved up to pay rent for 6 months. That will take me 1.3 years of saving to get to that threshold (assuming I pay for nothing else - food, etc).

If I pay $50K/yr, I need $25K saved up to pay rent for 6 months. It will take me 4 months.

Depending on how long you live, etc, I suppose there is a point where the former is better. But not in the short term. That's assuming you're paying mortgage and not rent. What if this is pure rent?

Then you have to pay that much even in retirement. That means you have to save up a lot more in the first scenario before you can retire, and may have to work longer, despite the higher pay, and the higher savings.

Of course, you can always retire in a cheaper place, but that's a matter of preference. I would rather retire in the place I lived much of my life in - not in some strange city.

You're assuming that people would have to live in the same place after their employment ends (you do bring this up later, though). This definitely isn't the case for me; I've moved every single time I've changed jobs.

The point remains, in the first scenario the person has $250,000 worth of disposable income. In the latter it's only $150,00. The former is in a much better position to build up saving. Heck, even one year's worth of post-rent income in savings is enough to spend as much money as the average American annual income (~35k) for the next 7 years.

> Then you have to pay that much even in retirement. That means you have to save up a lot more in the first scenario before you can retire, and may have to work longer, despite the higher pay, and the higher savings. Of course, you can always retire in a cheaper place, but that's a matter of preference. I would rather retire in the place I lived much of my life in - not in some strange city.

Sure, but now you're talking about a drastically different scenario if the resident has concluded they will live the rest of their life in their apartment. In that scenario, optimizing for post-employment living is a more important factor. But until unless you've decided to retire in your current apartment, the first choice is strictly better.

I'm a glad your comment is more nuanced this time. Your original one had:

>Compared to, say, someone making $200,00 post tax and spending only 25% of that on rent it is strictly better.

I stand by the notion that the first scenario (making $1M and spending $750k in rent) is strictly better than the second. Of course I also agree that making zero dollars and spending $750k in rent is considerably worse than spending $50K rent. But that wasn't part of the original comment.

Essentially, I claimed that Scenario X is better than scenario Y, but now you're saying "but! What if scenario X suddenly becomes scenario Z?".

I said “all else being equal,” and the example was deliberately hyperbolic to make the math obvious.

If I earnt a million a year, I wouldn't be commuting more than 5 minutes to to work. Commuting sucks.

If you ever live with anyone else you will probably have to optimize multiple commutes (or proximity to other resources). Your salary likely won't have much impact on that decision.

In my particular case, I work at the same place as my wife.

> No, you wouldn’t.

I can say with absolute certainty that I'd be pretty damn happy with $250k post-rent income.

I think the dispute is more wether 75% rent is a likely choice in the million dollar scenario.

(vs the contentment with remainder)

This entire thread is so strange to me, if you're spending $750000 per year renting, shouldn't you be buying $750,000 properties once a year instead?

I think the idea that the grandparent commenter was pointing out is that pointing to higher percentages of income going towards rent is an overly simplistic metric. If the percentage of income spent on rent goes from, say, 20 to 40%, but average incomes double then the total amount of post-rent income still went up by 50%.

We're talking about San Francisco. There aren't any $750k properties. ;)

It's actually not that expensive to commute by air to SF. There are 261 working days in a year, and say $200 air fair per day, that's $55,200 in air fair. It'll cost more than that with to/from the airport, so say a hundred grand. This becomes doable at far less than $1m. I've made many day trips to SF from Seattle, and the plane was usually full of such day trippers.

Of course, if your employer is flexible, it can cost far less.

Better donate that $100k/year to scientology, or spend it in Las Vegas, it will have a more positive effect on your life than commuting to work by plane every day.

My comment was merely about the finances. One may also find such an arrangement more workable with working 2 days a week at home, or stay overnight frequently in SF.

Yeah, this. There is no way that would work.

> No, you wouldn’t.

The hell I would too.

Protip for those of you who are rolling in the $$ and considering this:

The locals hate it when you do this because you screw with their low CoL so please don't shove it in their face by being politically active as well.