Hi, All -
My wife and I are fairly newly-minted Mustachians. I attended 'Camp Mustache' in Washington a few months ago, and we are rebooting out lives to retire in 15 years. To that end, we are considering moving to a city with a lower cost of living, better bike commuting options, and lifestyle options that suit our values. In the past week, I have been offered jobs in Bend, Oregon and Helena, Montana and we must decide by Friday which direction to go. We are currently living in Portland, and love it here, but are looking for more low-key and low-cost cities to start a family and build our nest egg. The jobs have a pay disparity of about $20k/yr, but that's somewhat offset by a lower cost of living in Montana vs. Oregon. Here are the details (all figures are combined between my wife and me):
Income potential in Montana: $98K (before taxes) / estimated after-tax income @.66 = $65,000 net income
Income potential in Oregon: $120K (before taxes) / estimated after-tax income @.66 = $79,000 net income
Estimated Housing Rent in Montana: $9,600/yr.
Estimated Housing Rent in Oregon: $13,200/yr.
Estimated Mortgage Payment in Montana: $19650/yr (assuming 175k house, 15yr. mortgage @ 3.5% + taxes/insurance)
Estimated Mortgage Payment in Oregon: $21,600/yr (assuming 200k house, 15 yr. mortgage @3.5% + taxes/insurance)
Net Income After Mortgage/Rent:
Montana Net Income After Rent: $55,400
Montana Net Income After Mortgage: $45,440
Oregon Net Income After Rent: $65,800
Oregon Net Income After Mortgage: $57,400
Monthly Expenses:
Student Loans: $300
Internet Service: $40
Mobile Phones: $80
Heating: $30
Electric: $60
Water: $80
Garbage: $60
Car Insurance: $65
Gasoline: $175
Food/Bev: $400
Prescriptions: $20
Dog: $50
Netflix: $8
Haircuts/Massage/Manicure: $75
Barre 3 Online: $10
Total Monthly Expenses: $1473 / $17,676 Annualized
Total Income After Mortgage/Rent and Expenses:
Montana Income (Rent): $37,724
Montana Income (Buy): $27,764
Oregon Income (Rent): $48,124
Oregon Income (Buy): $39,724
Assets:
$50k in 401k and IRA accounts
$75k in equity in the house we own in Portland (valued at $320k)
$15k in cash
Liabilities:
$25k in Student Loans
$245k Mortgage Loan @ 4.25%
Our plan is to rent our Oregon house until we are SURE we like it in Helena or Bend, then sell. We can rent for about what we pay in mortgage (approx. $1800/mo.).
WE WANT TO BE FINANCIALLY INDEPENDENT IN 15 YEARS.
There are some contributing factors to this decision. My parents live in Montana and are aging and experiencing some health problems, and we would like to be able to assist them as they age. We are strongly committed to saving at least half our income in any case, and are laser-focussed on that goal. We also want to have a child in the next year or so, which will impact these numbers somewhat. For instance, my wife will probably take 3 months beyond the normal 3 month maternity leave, and will likely work 4 days a week until the child is school age. But the numbers won't change significantly.
Here are my questions:
1. Is there a clear choice between these two cities when looking through a cold, hard, unflinching Mustachian lens?
2. Are my income/expense figures reasonable based upon what Mustachians typically spend?
3. Anyone have experience or knowledge of these two cities that can inform our decision?
4. Any other thought or input is greatly appreciated!
5. What am I missing?
Thank you in advance!
Aaron
