Author Topic: Cost of FIRE in LA?  (Read 3717 times)

Darryl Musashi

  • 5 O'Clock Shadow
  • *
  • Posts: 22
Cost of FIRE in LA?
« on: September 30, 2016, 05:54:27 PM »
I realize that the amount you need to save up to FIRE varies greatly from person to person. But I am curious, has anyone on here managed to retire while living in an expensive city like LA or NYC? If so, what was your magic number?

I'm stuck in LA at the moment, and just wondering whether I have any hope of retiring while I remain here.


Shor

  • Bristles
  • ***
  • Posts: 480
  • Location: Orange County, CA, USA
Re: Cost of FIRE in LA?
« Reply #1 on: September 30, 2016, 06:04:30 PM »
Possible routes are:
Buy a house 600k+
Rent and pray that rent will not increase for the next 50 years.
Move to LCOL
Have a pension
Bought a house before the boom.

You have hope of retiring, but why would you want to retire and stay in LA? Ludicrous..

See attached.. this is a fact of life.. every day...

Zikzin

  • Stubble
  • **
  • Posts: 129
Re: Cost of FIRE in LA?
« Reply #2 on: September 30, 2016, 06:10:44 PM »
Paging @spoonman, He's retired last year and from LA, but he could be traveling somewhere...

We live in LA too, but definitely not retiring here.



Shor

  • Bristles
  • ***
  • Posts: 480
  • Location: Orange County, CA, USA
Re: Cost of FIRE in LA?
« Reply #3 on: September 30, 2016, 06:22:55 PM »
If it will inspire you to move out, every day I can take a picture of the freeway backed up in bumper to bumper traffic.
You might mistake it for a 5 lane mega McDonald's drive through!
But no, these are just people trying to get a few miles in to work.

Uhh but I guess to answer your quesiton, it really depends on your personal expenses. It's not like rent is in the 2-3k range, but the facts are: the city and surrounding area is crowded. The transportation network is congested, and there is no sign of this alleviating any time soon, so living space will hold on to its premium.

Rent is a bit more, but it's not crippling high
Food doesn't have to be expensive unless you make it
Same thing with most of the costs people end up having on their balance sheet

So it really comes down to, where will you live, and can you keep the rest of your expenses down.

jeromedawg

  • Magnum Stache
  • ******
  • Posts: 3408
  • Location: Orange County, CA
Re: Cost of FIRE in LA?
« Reply #4 on: September 30, 2016, 07:27:23 PM »
Possible routes are:
Buy a house 600k+
Rent and pray that rent will not increase for the next 50 years.
Move to LCOL
Have a pension
Bought a house before the boom.

You have hope of retiring, but why would you want to retire and stay in LA? Ludicrous..

See attached.. this is a fact of life.. every day...

As far as traffic is concerned, it only looks like that during rush hour... which is anytime between 6am-8pm...LOL!!!

Shor

  • Bristles
  • ***
  • Posts: 480
  • Location: Orange County, CA, USA
Re: Cost of FIRE in LA?
« Reply #5 on: September 30, 2016, 07:55:26 PM »
Possible routes are:
Buy a house 600k+
Rent and pray that rent will not increase for the next 50 years.
Move to LCOL
Have a pension
Bought a house before the boom.

You have hope of retiring, but why would you want to retire and stay in LA? Ludicrous..

See attached.. this is a fact of life.. every day...

As far as traffic is concerned, it only looks like that during rush hour... which is anytime between 6am-8pm...LOL!!!
Haha!...ha.... *sob*

Laserjet3051

  • Pencil Stache
  • ****
  • Posts: 843
  • Age: 92
Re: Cost of FIRE in LA?
« Reply #6 on: September 30, 2016, 08:53:53 PM »
Possible routes are:
Buy a house 600k+
Rent and pray that rent will not increase for the next 50 years.
Move to LCOL
Have a pension
Bought a house before the boom.

You have hope of retiring, but why would you want to retire and stay in LA? Ludicrous..

See attached.. this is a fact of life.. every day...

As far as traffic is concerned, it only looks like that during rush hour... which is anytime between 6am-8pm...LOL!!!

Truth.

sisto

  • Pencil Stache
  • ****
  • Posts: 973
  • Age: 51
  • Location: Sacramento, CA
Re: Cost of FIRE in LA?
« Reply #7 on: September 30, 2016, 09:49:47 PM »
I used to live in San Clemente in 1989-1990 and traffic was bad then. We used to call it the 405 parking lot. I definitely don't miss it, I left there to come back the Sacramento area where I'm from.

Darryl Musashi

  • 5 O'Clock Shadow
  • *
  • Posts: 22
Re: Cost of FIRE in LA?
« Reply #8 on: October 02, 2016, 12:34:42 PM »
Yeah, this place can be kind of a disaster COL and traffic-wise. I'm kinda stuck due to family and career choices -- but it terrifies me that my mortgage costs are around 25% of my annual household gross income.

That mortgage, more than anything else, is what might keep me from realistically FIRE-ing. Savings-wise, I could pretty easily hit the 750K mark (which I seem to remember is what MMM retired on) in 5-10 years, but pulling out 30K/year (using the 4% rule) doesn't do much for me when my mortgage payments (plus ridiculous property tax) are roughly $33K/yr.

OK, thanks all for your input. I think I'm either going to have to go to a crazy frugal place where I'm on a fast-track to saving up closer to 2.5MM, or I'm going to have to move (which ain't happening).

marty998

  • Walrus Stache
  • *******
  • Posts: 7036
  • Location: Sydney, Oz
Re: Cost of FIRE in LA?
« Reply #9 on: October 03, 2016, 02:31:59 PM »
It's a little bit more difficult in a HCOL area, but this is balanced by the relatively plentiful high paying jobs available.

Sure I could move, but I wouldn't have a job so it's an easy choice to stay for now.

Here's hoping the high equity in properties remains long enough to be cashed out at the end of the work journey and the start of the FIRE journey.

Darryl Musashi

  • 5 O'Clock Shadow
  • *
  • Posts: 22
Re: Cost of FIRE in LA?
« Reply #10 on: October 04, 2016, 11:44:11 AM »
Quote
You may eventually have enough equity to sell your place and buy another with cash somewhere LCOL with enough $$s left over to add to the stash and  be FIRE.

You know, this is the really fascinating part of living in LA. My wife is from here, and grew up with both her parents and grandparents realizing an 10-fold increase in the values of their homes over their lifetimes. People here see your home as the cornerstone of your retirement savings.

I'm not quite so trusting of the real estate market -- but admittedly, the value of my house has jumped roughly $50K in the single year that I've owned it. I'm still waiting for the bubble to burst, but if I sell at the right time, you're absolutely right -- the cash might help me to FIRE.

Darryl Musashi

  • 5 O'Clock Shadow
  • *
  • Posts: 22
Re: Cost of FIRE in LA?
« Reply #11 on: October 05, 2016, 12:21:07 PM »
Quote
I sold my place in OC and moved up to Big Bear Lake about a year after I quit my job. New place cost about 1/3 or less of OC place and I was able to pay cash and have $$s left over to FIRE. I was technically FIREd without selling the OC place and downsizing but it was more barebones than I would have liked.

If you don't mind my asking, spartana, how much did you save up to FIRE?

Darryl Musashi

  • 5 O'Clock Shadow
  • *
  • Posts: 22
Re: Cost of FIRE in LA?
« Reply #12 on: October 05, 2016, 01:48:29 PM »
Makes, sense -- and thank you.