There's also a lot of social pressure toward lifestyle creep. My parents hassle my wife and I regularly about our lifestyle choices. In their view, as two corporate attorneys, we should be living in a $2 million house in a posh DC suburb, driving a BMW and fighting with other people to get our kids into one of the "top" DC private schools. My wife and I couldn't bring ourselves to take on that kind of mortgage payment, and opted to buy a house that was less than one-quarter that price. We're not any further from D.C. than the expensive suburb where I grew up, but many of our neighbors have non-professional jobs or lack a college degree, which drives my parents nuts. Luckily my wife comes from a modest background and thinks our 10-year old paid-off Toyota 4Runner is a great car and would never let me buy a BMW (even though I really want one lol).

It's the best financial decision we ever made. Earlier this year when my wife decided she wanted to quit her job and bootstrap a business, we didn't have to spend months planning and downsizing. We just pulled the trigger.

Even though we have lots of marketing tell us how happy we might be if we spend money we can "afford" on things we don't need, but we want, we're pretty bad at predicting how much actual happiness we'd get from it. The BMW is a great example. You're getting joy and fulfillment from living a modest life, where good relationships and the reduced stress from your practical budgeting give you continual real world benefits and peace. The alternative, where you sign over a huge chunk of money, often with interest, so you can take home that BMW might put a smile on your face from time to time, but you also give up some of the joy you had before from knowing how much other parts of your life benefit from those smart budget choices. Ultimately, were those few smiles worth $50, 60, 70k? Seeing that car payment leave your bank account?

"Comparison is the thief of joy" -- Teddy Roosevelt (maybe)

why won't she let you buy a BMW if you can afford it without compromising savings goals?

> my wife decided she wanted to quit her job and bootstrap a business

Because, by saving the money, they had this opportunity.

Apart from not needing it, it would be rather conspicuous in our neighborhood, and given our small lot we’d have to park it at the community lot a quarter mile away. Lifestyle creep is easier to avoid if buying stuff is inconvenient…

> it would be rather conspicuous in our neighborhood

It's funny. In my gentrified lower income hood (eastern edge of Bushwick) what is conspicuous is the high percentage count of high end and expensive (e.g. Maserati SUV!) cars. So you guys just need to move to a lower income bracket neighborhood and you can have your BMW.

It's not a sound financial decision by many metrics and it seems like they get a lot more joy from financial independence allowing investments in more meaningful things.

Yeah that seems like it's getting into pathological territory.

How many of them would not be making $250k if they moved away from the HCOL area? Rents in NYC have been through the roof. Even with wages up due to the great resignation, it hasn't kept up with housing. Spending 50%+ of your post tax high pay check on housing has become the norm.

You could live far away from the city and spend 3-4 hours commuting every time you wanted to enjoy the city life or your employer asked you to come in. Or you could move away and risk getting fired or "salary adjusted"

The article kind of ignores the fact the high salary is directly tied to office location. You can save more by moving away from HCOL areas, but you most likely won't be part of the $250k article anymore

HCOL has an interesting parallel to when women entered the workforce in large numbers, you'd think that households going from single-income to dual-income would make them better off, but much of that new income went into property prices leaving a lot of households little better off in the long term, and leaving single-income households much worse off.

To be clear, NOBODY is suggesting women in the workforce is a bad thing, I am merely saying that HCOL's housing cost just suck almost all the regional income gain back out of the market leaving households little better off overall. The best thing we could do as a society is more full-remote jobs, to break up HCOLs and revitalize more rural areas.

Georgists have studied the mechanism by which land captures the value of labour quite extensively and many of them even predicted this trend. The solution to land capturing excess amounts of labour is to reduce total labour capture by taxing land instead of labour.

Would that not just lead to increased rent?

Is there a way to do it so that rents become lower?

Taxes on land dont have economic incidence on rents.

The reasoning is that land's profit stems from its location and the land owner doesn't have any bargaining power - his only choice is to not rent the land and absorb the loss of all value.

Its not the same with property taxes because builders/buyers can choose not to build, so there is some distortion.

A land owner has a whole continuum of choices because he is setting the rent price. It's no different from any other seller on the market. The higher price will push the potential tenant elsewhere but if other places are taxed the same way they may also need to raise prices so it will be a wash in lost customers and higher rent across the board.

They can't set rent prices - prices occur when supply meets demand, it's not unilateral.

The origin of rent in land - beware it is not the same for buildings - is the difference in value from one land to the least valuable land. (roughly, David Ricardo). A land tax is about taxing this rent, not about nominal land taxes on everything.

If the land tax is roughly correct, the owner of land cant charge more with the tax because it is less competitive than land that is a little farther away.

Adam smith, David Ricardo, Henry George, Milton Friedman and even Stiglitz have all lauded that land taxes are less distortive than any other tax and would be great as a local tax policy. (In the us, for cities and states).

>They can't set rent prices

They totally can. Go to any marketplace and see for yourself: sellers set prices. Buyers can negotiate, accept or refuse, but the seller setting the price (ask) is completely unilateral and happens billions of time every day.

>If the land tax is roughly correct, the owner of land cant charge more with the tax because it is less competitive than land that is a little farther away.

If this theory had been correct than raising taxes on businesses would not result in the increase of consumer prices.

>land taxes are less distortive than any other tax

Might be true or false, is orthogonal to the fact that land taxes, like any other taxes will be paid by the end consumer through increased prices.

> They totally can. Go to any marketplace and see for yourself: sellers set prices. Buyers can negotiate, accept or refuse, but the seller setting the price (ask) is completely unilateral and happens billions of time every day.

There is some subtlety about talking about prices conceptually. Both sellers and buyers can make an offer or a bid at any price, but market prices are the result of sellers and buyers meeting - about making the actual exchange.

In this context, saying "sets prices" would mean that the buyer takes the price, not that the seller has made a listing at an arbitrary number. Offering 1$ for a car and not buying a car is not setting a price - neither is Asking 1000000$ and not getting an offer.

Rent prices are paid at all because there is a benefit to the land. If the Ask for the land is higher than the value, it will meet demand and validate the price.

> If this theory had been correct than raising taxes on businesses would not result in the increase of consumer prices.

Thats not true - economic incidence requires evaluation in a case by case basis. It depends on the relative market strength or demand/supply elasticity. For example, a tax on life saving medication is borne by the consumer, but a tax on skittles is born on the skittles manufacturer (as consumers replace skittles with other candy).

The point is that the economic incidence on unimproved land is very much against the landlord - he can't do anything with the unimproved land but rent it.

For longer, wider and more interesting historical analysis of LVT I recommend reading from source - Henry George and Provery and Progress, a book denouncing homelessness and land speculation in...San Francisco, 100 years ago.

I understand what you are trying to say but your concept of market price is only applicable to fungible goods. "Market price" for land leases makes very little sense and only implies that it's whatever price you've managed to negotiate. There are no supply/demand curves, there is no spread, nothing like you are used to with pricing fungible goods.

But that is not the point of my argument, your original assertion was that "the land owner doesn't have any bargaining power - his only choice is to not rent the land and absorb the loss of all value." Now you are saying seller and buyer negotiate? Why would they do if the seller has no bargaining power?

> but a tax on skittles is born on the skittles manufacturer (as consumers replace skittles with other candy)

Why then a 1kg of Skittles on Amazon.co.uk costs more than 50 oz (1.5kg) of the same on Amazon.com (GBP 9.43 vs USD 9.98)? Is it really because British people want to taste the rainbow so much more than Americans?

> I understand what you are trying to say but your concept of market price is only applicable to fungible goods. "Market price" for land leases makes very little sense and only implies that it's whatever price you've managed to negotiate. There are no supply/demand curves, there is no spread, nothing like you are used to with pricing fungible goods.

To make sure I understand - you say that because each land is as unique as an NFT, the market for every single piece of land has supply of 1, and the classical supply/demand curves don't make sense/apply.

I have multiple answers to that concept:

1- From a mathematical abstraction, the key to riches would be to get one land and split it into as many sub-pieces of land as possible and sell them all at the same price as the larger one!

2- There are differences between fungibles and non-fungibles, crypto has taught us, but overall most properties are similar and allow for the exchange of a non-fungible for another. Each land NFT is unique, but there are many land NFTs, and they compete against each other as if they were fungible. Each wine is unique too, even each bottle of wine is unique! but albeit this does affect demand, it doesn't turn supply to perfect inelasticity. There are subsitutions!

> But that is not the point of my argument, your original assertion was that "the land owner doesn't have any bargaining power - his only choice is to not rent the land and absorb the loss of all value." Now you are saying seller and buyer negotiate? Why would they do if the seller has no bargaining power?

Bargaining power to increase rents to cover the land value tax - he cant change the supply of land, or repurpose it for something else.

> Why then a 1kg of Skittles on Amazon.co.uk costs more than 50 oz (1.5kg) of the same on Amazon.com (GBP 9.43 vs USD 9.98)? Is it really because British people want to taste the rainbow so much more than Americans?

I've waited all my life to a microeconomics conversation about skittles. The bigger question, sir, is why do blue skittles sell at the same price as all the other skittles, when they are clearly the worst.

Many equal goods have different prices in different parts of the world for cost of labor, supply, taxes, etc etc. I have no idea in this particular case why it would be so, but relevant to economic incidence of taxes, sales taxes do change supply/demand curves of skittles bought on amazon. Because skittles are a unique product, but also substitutable for other non-sales taxable foods, its very likely both producer and purchaser eat part of the tax hike - they both lose.

Not exactly as NFT, which has no value at all and, in fact, is chiefly traded on the basis of other NFTs of exactly the same kind (but for some reason considered different).

The market model of fungible goods is based on maximizing the product number of items and price. It means that sellers will be increasing price as long the number of items sold also increases and will decrease price when the number of item sold drops, since the supply and demand is monotonic (someone willing to sell at $X will also sell at $X + anu positive number and someone willing to buy at $X will also buy at $X - any positive number) there is naturally a point where the number and price product is at the maximum. It still is affected by taxation and adding taxes moves prices up but this is besides the point.

None of the above applies to the land lease. The number of items to sell is 1, the value that the seller is maximizing is the lease value. If the price is too high then the land will stay unleased for longer time than acceptable to the particular seller and that may cause him to lower the price. The land will stay unleased longer because the prospective buyers will be choosing cheaper land elsewhere even if they otherwise would have chosen this particular parcel. But if all land owners are hit with the same tax then all of them can raise price and that will not affect unleased time because there won't be a price advantage for the buyer to go elsewhere.

>I have no idea in this particular case why it would be so, but relevant to economic incidence of taxes, sales taxes do change supply/demand curves of skittles bought on amazon.

Okay, we agree then. I was under impression you said they don't. Or you meant just sales taxes? What about VAT? What if there had been special Skittles tax in UK, would the manufacturer eat that since it's not a sales tax and the sellers are very inclined to just take a loss according to you?

LVT is not the same tax to all land, its precisely based on land rent.

You can draw the supply and demand curves to see what happens when you add the tax. The supply curve is a straight vertical line since land is in fixed supply. When you tax someone $2000 for land, their demand for the same land falls by $2000. So if you charge the tenant the tax, prices will fall by $2000 making the landlords absorb the cost. If you charge the landlord the tax both the supply and demand curves are unchanged and the tenants pay the same.

Taxes on most things change prices by adjusting both supply and demand, it’s the adjustment to supply that can pass on part or most of the tax to the customer. If supply doesn’t adjust you can’t do that.

> So if you charge the tenant the tax, prices will fall by $2000 making the landlords absorb the cost. If you charge the landlord the tax both the supply and demand curves are unchanged and the tenants pay the same.

Beautifully correct. Can you imagine peddling in politics a tax on renters claiming it is in their benefit?

I really can't. What are supply and demand curves for non-fungible goods? Each plot of land is unique. The asking price doesn't not affect its size. It does affect the time on market: the higher the ask, the longer it will take to rent out.

And some pieces will take infinite time to rent out if the price is set too high. The point is the land was just as unique before and after the tax. If you believe in supply and demand curves at all, this example is straight forward. Land has essentially fixed supply, so the curve is vertical and outside of a few weird exceptions can't change. The demand curve for your individual unique piece of land will be unchanged if the landlord pays the tax (taxes don't cause tenants to be willing to pay more) or be lowered by the tax if the tenant pays the tax (total spend by tenant unchanged). The new intersection of the lines determining the market price is either unchanged or lowered by the tax depending on who pays. This is unlike other supply and demand examples where in response to the tax you reduce supply causing the supply and demand curves to intersect at a higher price point.

>And some pieces will take infinite time to rent out if the price is set too high.

Yes. Same as the demand curve goes to 0 if price is high enough.

>If you believe in supply and demand curves at all, this example is straight forward

I believe in supply and demand curves for fungible items. It's easy to observe that you can acquire less of a particular item at a lower price than at a higher price and also true that you can sell more at at a lower price than at a higher price. I don't see how, say, a particular painting becomes bigger or adds detail with price increase or how one can sell two Mona Lisas by cutting down the price.

If you have a unique item your supply curve is flat at 1 supply and steps down to 0 at a price at which you refuse to sell. It’s still a supply curve and there is still a corresponding demand curve that determines the price you can sell at. In this case, it’s the demand of the highest bidder that causes the intersection. But the theory of supply and demand doesn’t go out the window because items are non-fungible.

So now you have "demand curve of $CUSTOMER"?

There are also no individual demand curves. The whole idea of supply/demand curves is statistical and does not apply to a single individual (as same as unique items). I have no more questions about the "land tax won't be passed to the end consumer" though so here is some result from this exchange :)

Interesting. Can you recommend a book or an article on this?

Progress and Poverty is the most interesting original source but the first few chapters are an outdated theory of capital. I’d recommend one of the modern abridged editions that skips this.

Thank you! Quick follow up question, which abridged edition would you recommend? Also, are there any recent books on the subject that you would recommend?

It's almost like the economy is designed to funnel money away from labor.

NOBODY? How about anybody who cares for the future of their people or the stability of their society? Forcing women to work is arguably the root of most social ills in the last two generation.

This is more than likely confusing correlation with causation.

There are a host of regulatory issues that made building anything expensive that arose just as women joined the workforce. The largest source of increase in COL over the last is housing. Rents have nearly doubled in constant dollars in most large cities.

FWIW the rise in women working has increased individualism and requirements in men pre-dating, which partially reflects in RE (more individual space, less families).

This doesn't mean women working is the problem, rather we should've thought harder about what measurements should've been taken when introducing women into the workforce. Several countries are now "fixing" this retroactively, though more so to give women a fighting chance rather than actually helping out workers as a whole (e.g. forced paternity leave).

I regret to inform you there are lots of people who think that women in the workforce is a bad thing. Fundamentalist evangelical Christians often view this as a negative. There was a conservative thinker on the Ezra Kline show who espoused this view just recently.

Maybe its a chicken egg type problem. The solution was that households became dual income. I think the drive for a household to become dual income was probably the HCOL and not vice-versa.

>I think the drive for a household to become dual income was probably the HCOL and not vice-versa.

I'm not sure that's correct. I don't have the statistics off hand, but I believe the average home prices were much smaller multiples of household income when most households had a single income.

> NOBODY is suggesting women in the workforce is a bad thing

Lots of people, and not just religious conservatives, are arguing th as that, because the exact effect you point out makes it hard not to either say that or that capitalism is a bad thing or that people working more for less is a good thing.

So how do all the people making under $250k survive in those HCOL areas? It still seems lifestyle choices are a factor.

They survive by not having $200k (average and median) in student loan debt that needs servicing.

It's always been an unspoken truth behind the "the people with really high student debt have huge earning potential" counterargument for student-debt cancellation: yup, they do, those are your doctors (in particular). They go into tons of debt to get there, they forego many years of income due to an extended educational/credentialing period. And generally, so few people are willing to take that risk that we already have a massive shortage of them.

And unless you reform the educational system, the cost of that student-loan debt all gets rolled into the cost of their services and we all pay it. And it does show up as income in this fashion. It's one of the reasons that fixing the problem is so tough - it's really at the nexus of several broken systems that have complex problems with many stakeholders who are all reticent to reform.

> They survive by not having $200k (average and median) in student loan debt

Where do you get $200k from? The average student loan debt for a bachelors degree is $26-36k, depending on type of institution: https://nces.ed.gov/fastfacts/display.asp?id=900

It goes way up for advanced degrees.

https://educationdata.org/average-graduate-student-loan-debt....

"Among federal borrowers"

This doesn't include people who get graduate degrees paid for by their parents or by the company they work for. I got a Masters and didn't take on any debt because the company paid for most of it and I only needed to pay a few hundred in fees each semester.

Now is a good time for me to say that it was still a waste of money and time. It was no benefit to me and didn't increase my comp. It would have been better to just work 2 extra hours at my job every day instead.

> They survive by not having $200k (average and median) in student loan debt that needs servicing.

Both the share of the population with any student loan debt and the average student loan debt to income ratio consistently goes down with increasing income (even though the average student loan debt itself goes up with income until you reach the top decile, which has lower average student loan debt than the next highest decile.)

* If you're poor you deal with the terrible commute as non-negotiable. You might also live in a cheaper illegal basement apartment, put your child in a cheaper illegal daycare, etc. A richer family can avoid the risks and pay more. But some poorer families have to take on the risk or be homeless

* There are more subsidies for the poor. It sounds funny to type, but the $250k families might have a harder time to make ends meet than the $60k ones. Childcare being a big example. This is specific to a HCOL city like NYC where subsidized child care starts at 6 weeks old, but a $250k family will probably be spending $3k+ per child per month

> * There are more subsidies for the poor. It sounds funny to type, but the $250k families might have a harder time to make ends meet than the $60k ones. Childcare being a big example. This is specific to a HCOL city like NYC where subsidized child care starts at 6 weeks old, but a $250k family will probably be spending $3k+ per child per month

Yeah it sounds funny to type because it's not true

Probably not true nominally but proportionally 250k is very far away from being 4x 60k.

I make 235k in the bay area and just rent + daycare for 2 kids would be 10k a month - on a net income of 12k a month.

Talk to your servers next time your in a restaurant in the Bay Area or NYC, ask where (and how) they live.

Most likely they live quite far from where you are eating and with more roommates than you had in college. Or they still live at home, outside of the city in the suburbs they grew up in.

You don't even have to ask servers, go ahead talk to non-engineers/PMs at your company. They all likely both don't live in the city you work in and have an uncomfortable amount of roommates.

And maybe you can write off "living without roommates in your 30s" as a "lifestyle choice", but it certainly represents a decline in the standard of living from my expectations growing up.

Maybe they just don’t?

For instance, I teach high school English. Cost of living in my city is 40% below SF, but I still couldn’t afford to live in the community where I teach. I commute from a cheaper area. Even then, I am actively planning an exit from teaching after this year because my wages aren’t keeping up with rising costs (10 yoe, TC 52k).

They live in crowded spaces. I had friends in NYC who would live 4 to a 1 bedroom apt where there'd be 2 people in a bedroom and 2 people splitting the rest of the living space with a DIY curtain. It's definitely a lifestyle choice, but it's not a pleasant one in my opinion which is why I never did it.

A larger percentage of people reported living paycheck to paycheck in lower income groups.

You can spend an awful lot on rent at $250k and still have plenty of money left.

> How many of them would not be making $250k if they moved away from the HCOL area?

I live in the D.C. metro, considered a "HCOL area." I'm less than an hour from downtown DC. Our house (almost 3,000 square feet) was under $500k in 2016, and there's still plenty of similar houses between here and D.C. that are still under $500k. But most folks making $250k would rather live an hour on the other side of DC, in the expensive Virginia suburbs where similar houses cost twice as much, but they can be surrounded by college educated professionals with similar complexions to themselves...

I used to work in Manhattan and had a great, 30 minute commute from New Rochelle. Looking at Redfin are plenty of 3BR homes in the $500s and $600s within a mile or so of the New Rochelle Metro North Station. That's not cheap, but the PITI on that is a couple of thousand dollars less per month than what the 28% rule gives you for a $250k/year income.

> You could live far away from the city and spend 3-4 hours commuting every time

This is an example of my point. That's a choice one makes. One might claim, and I'd agree, that it's a shitty choice to have to make and it's better to bite the bullet of high housing costs, but it's still a choice.

> commuting every time you wanted to enjoy the city life

How do you enjoy the city life when half of your disposable income goes to shelter? And you haven't eaten yet??

But as long as enough people are willing to chase that dream rents will be high. That is, they will reflect what the market can bear.

The best way to deal with this is to add savings-creep too.

There is no reason why you can't enjoy things if you make more money, but increase your savings and investing rate by an equal or greater % as your salary goes up.

If you do not have a savings or investing rate, the next time your salary goes up, if you think it will, take 50% of that and put it into savings and investments. Treat your salary increase as a 50% increase.

This is more or less what I do. Measured objectively against typical Americans I do save a ton. But back 10 years ago I figured I had everything I cared to have, so anything over and above would be gravy. Not so as it turns out.

So instead I have a target savings rate, and while I don't live on a strict budget I keep my eye on it that I'm close enough over time.

> But back 10 years ago I figured I had everything I cared to have, so anything over and above would be gravy. Not so as it turns out.

Would you mind sharing what changed? This is actually something I've been thinking about lately. I'm trying to plan out the type of lifestyle that I'd ideally like to have while also estimating how much it would cost me. This way, I don't get needlessly tempted by chasing ever higher and higher salaries.

Sure. It's nothing profound. More a matter of having simpler tastes back then.

The first example that comes to mind would be there are restaurants I enjoyed that were a once in a year treat kind of place at the time. Now I go to those sorts of places multiple times a month. At some point I realized I could afford to do so, and I enjoy those places more, so why not? And then at some point they shifted to being among the default options when we think to go out for dinner.

The second my mom gets a dollar - she has the most insatiable desire in the world to spend ten.

There are spenders and savers.

No amount of money changes that.

Part of the point of making more money is to not think about cost. And then you learn how endless our desires are.

> There are spenders and savers.

This seems a little reductive, like nobody has any agency nor are there any shades of gray, you're either black or white, true or false, spend or save. I'd argue people prioritize different things and a lot of the reasons they prioritize those things has to do with their upbringing or personal history.

I'm sure, in general, people should save more. Just feels like everyone is quick to jump on others for making different choices without understanding the context of those choices. It is the whole "Should people on food stamps buy a birthday cake?" question again, and every time that comes up all hell breaks loose.

Many people have poor impulse control around certain decisions and are unable to control themselves despite wishing otherwise. The percentage of overweight and obese individuals in the world is a good indication of this.

Unless you feel obesity is their priority.

Not just poor impulse control, typically obese people and compulsive spenders are compensating for some psychological trauma.

For some reason they lack a positive emotional stake in their future

Seems like you are describing Why they have poor impulse control.

Some people just really like French Fries...

Yeah, the article kicks in with an inflation angle but I don't buy it. Last year I moved to Orange County, their example of a paradigmatically expensive area, and the real estate certainly is pricey, but not out of reach for anyone with a quarter-mil in yearly income. But I've never seen so many Teslas, Lamborghinis, and Porsches on the road in my life. Not a mystery where the money is going.

Reminds me of those stories about broke athletes.

Some of them are quite tragic- they're preyed on by their entire family and birth village.

Yeah, assuming a household of 2+2 in NYC/SF/Seattle:

* Renting a 3 bed near work (financial district) will cost around $70k/yr

* a nice car (a BMW M3-ish) + a cheap van (costs around $20k/yr

* Ordering in everyday costs $40k/yr

* Nice vacations and trips will easily cost $30k/yr

total = $160k/yr

wage = (250k x 0.7(taxes)) - 30k (401k, HSA) = $145k/yr

__________

Yep, I can totally see how allowing common types of 'tech-people life creep' will quickly lead to a paycheck-paycheck situation. I only outlined the macro-costs, and those still add up.

Of course, this also clearly outlines the main savings a person can make:

* Save on rent. always. 33% of your wage is a recommendation for poor-americans. Don't rent at 33% if you're making $250k (70k -> $35k)

* Cook if you can or pickup from your local street vendor, not doordash.($40k -> $15k)

* Buy a cheap car, or none at at all.

_________

It also outlines why a subsection of HN has been shouting about urban infrastructure reform in the US.

Higher density, more middle housing and better public transports allows for more housing supply, more walkable amenities and car-free lifestyles.

* Car free = save 15k/year (assume 5k for ubers, car rentals when needed, public transport)

* More walkable density = cheap food downstairs (NYC is an excellent example of this)

* More housing = cheaper rent (the biggest culprit)

__________

The numbers are staggering. I haven't added any of the extra costs that come with emergency medical care or children (except food and living). $250k is the top 5 percentile of households the US. Unless America makes its infrastructure efficient and sustainable, the current framework will bankrupt literally 95% of irresponsible spenders in HCOL regions in the US.

Worst of all, the cities are ugly, the concrete landscape is hellish and the hedonistic treadmill quickly catches up, as the new luxuries start feeling no different than a Motel or a Corolla.

A hidden factor I don't think you hit on in your analysis was "- 30k (401k, HSA)". This right here is a huge difference. Sad as it might be, the numbers on what average people sock away in 401Ks is not good.

So it's another example of a choice people make. As with most of these situations there's a right answer. In this case if one can one should choose to invest in their 401Ks and such. But it's still a factor of not having an apples to apples comparison in these conversations between low income and high income people living paycheck to paycheck.

If the +2 is kids than you left off an important $48K/yr expense.

https://patch.com/california/san-francisco/how-much-it-costs...

Wow if only not owning a car worked outside of a city. Except it doesn't, even in the city, if you have family outside of the city how do you visit them? Would you rent a car or have someone make the trip to get you?

I interpreted the GP as suggesting instead of BMWs, Teslas, and nice SUVs there are cheaper alternatives. This includes more bottom of the barrel cars.

On your other question, I was a carless city dweller for many years. And yes I would fill in the blanks with rental cars on occasion.

Yeah, I understand that a family of 4 will want to own 1 car. However, upper-middle class American families often have 2/3 cars due to lack of public transport infrastructure.

Alternately, the densest cities can allow for a car-free lifestyle with rentals for out-of-town trips. However, the costs might be the same as owning a standard sedan. ($30-40k). I won't consider this bottom of the barrel at all.

100%. I'm in the same boat as you. I could save more...but I like nice things and going out. I track all of my spend and my lifestyle creep year-over-year aggressively, so I know how much I'm letting it get to me, but I'm also putting money into my 401(k) and HSA and have back-out plans in case things go _really_ south.

A large part of this is about housing and taxes: https://www.aeaweb.org/articles?id=10.1257/mac.20170388

HCOL areas are also usually the most productive.

In fact it's not a coincidence - economically productive areas are desirable to live. Everyone likes living in a thriving economy, and salaries are higher. HCOL isn't a bad thing in the abstract, there is no abstract "right" set point for cost-of-living, and you could equally view LCOL areas as generally being rural/underdeveloped areas that are underpriced relative to the broader economy.

HCOL is the law of rents catching up. If your right to exist in a place can be captured, then it will eventually cost you your entire productive output.