Author Topic: FI in HCOL area- what are your plans?  (Read 3810 times)

NorCal

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FI in HCOL area- what are your plans?
« on: May 26, 2016, 07:21:42 PM »
For background, I live in one of the most expensive parts of the Bay Area.  We are incredibly fortunate to have a landlord that hasn't raised our rent in nearly 6 years.  It's a great deal by local standards, but still incredibly high ($2,800/mo for an 1,100sqft single family home) by national standards.

Our investment portfolio is currently around $850K, and we're starting to seriously think about where we would RE to, and more importantly, when.

See, we do love the Bay Area.  I grew up here and my wife has lived here since college.  My family is here, and my wife's family is in LA.  This is home in a lot of ways.  Our ideal scenario would be a relocation to a more affordable part of the Bay Area like Livermore.  Yet "affordable" in Livermore is a home in the $650-$750K range.  That's a lot more years of working than moving to an area with a more normal housing cost.

I'm curious about the group.  For those of you currently living in a HCOL area, what are your FI plans?  Are you leaving?  Working longer to afford housing?

hay_otsuka

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Re: FI in HCOL area- what are your plans?
« Reply #1 on: May 27, 2016, 01:50:42 PM »
American canyon isn't that far and 350-450 gets something decent and newish

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RyanAtTanagra

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Re: FI in HCOL area- what are your plans?
« Reply #2 on: May 27, 2016, 03:52:04 PM »
Personally I'd rather RE and move rather than work longer to continue living somewhere very expensive.

This is how I see it.  I live in SF but don't plan on retiring here.  I love it here but I'm not working an extra 10 years (more?  I've never run the numbers) for it.  There are a lot of wonderful places to live that are 1/4 the price.  And I'd rather be free somewhere else than working here.

Actually I just calculated.  My projected time to 'bare bones' FIRE using my number from before I moved to the bay area is 2.2 years.  If I were to FIRE here, using my current bare bones cost of living, it'd be 14.7 years.  So yea, SF is nice, but not 12.5-more-years-of-working nice.

Basenji

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Re: FI in HCOL area- what are your plans?
« Reply #3 on: May 27, 2016, 04:40:41 PM »
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Livewell

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Re: FI in HCOL area- what are your plans?
« Reply #4 on: May 27, 2016, 04:55:08 PM »
We live in Silicon Valley.  It's been a good place to live (we've been here 20 years) and build wealth.  my wife quit her job to raise the kids (and escape tech) and I plan on staying in mine a few more years to get to our FI number.

The challenge is then what?  We like the weather, the progressive attitudes, the access to culture, the many many things you can do.  We're not sold on the schools, not so happy about the traffic and congestion, and the biggest thing we struggle with is the rampant "type A" mentality here.  For so many, including us for a while, it's all about career.  Since having kids and discovering MMM career just has less appeal.  While there are many good people here, the "type A" mentality, in our estimation, seems to lead to far fewer causal meetings or time when things can just happen.  It's all scheduled and calendars and sorry but we're booked in June.  More than HCOL vs LCOL, the ability to find a slower pace where people are not so rushed is what appeals to us most about moving to another place.

Just haven't figured out that other place yet.  Probably would have been FIRE by now if we had.  Now what?

Livewell

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Re: FI in HCOL area- what are your plans?
« Reply #5 on: May 27, 2016, 04:57:12 PM »
NorCal, Are you planning on having kids?  Family nearby is very important!

We are both transplants, and it would be a huge luxury to have one or both grandparents nearby.

BlueHouse

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Re: FI in HCOL area- what are your plans?
« Reply #6 on: May 27, 2016, 05:52:16 PM »
I live in a HCOL and plan to retire here.  For me, the key is to pay down my mortgage significantly so that my fixed costs are reduced to a very manageable level.  Once I no longer am worried about being homeless, then I can make tons of choices. 
I know Spartana is right about having more choices once you're FIRE, but I guess I just don't really know what I want to do yet and am too conservative (chicken) to make multiple big changes all at once.  S o my order of events will force me to work longer than I have to because I'm scared to make the big decisions now.

Order of events:
1.  Pay down (or off) mortgage
2.  RE
3.  spend about one year doing everything I want to do in my city
4.  Sell ridiculously expensive house and move somewhere else and travel extensively

If I moved #4 up to #1,  I think I would be where Spartana is now in mindset.  But I'm not there psychologically yet. 

dinkhelpneeded

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Re: FI in HCOL area- what are your plans?
« Reply #7 on: May 27, 2016, 06:04:12 PM »
For the longest time, I planned to FIRE elsewhere (anywhere but the bay area!) but over the last couple of years, I have decided to stay, for a few reasons.

1. Its hard to make new friends as an adult (given our personalities)
2. My husbands primary skills revolve around tech, we are worried after a few years (when kids are older) we might get bored and want back in on the "madness"/Type A/start up life
3. Paid off house can be achieved (for us) in 5 years (not 10+ years)
4. We can always sell and have more of a cushion
5. Moving somewhat "nearby" is a real option, as long as you know you will never want back in on the "madness"
6. We also bought a house with a in-law unit that was rented (this helps quite a bit in the mortgage payoff) but wont look as "cool"

dinkhelpneeded

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Re: FI in HCOL area- what are your plans?
« Reply #8 on: May 27, 2016, 06:38:18 PM »
I know 3 people who are FIRE in silicon valley (that didnt make it big at a start up) and all three of them did it through real estate while holding down FT jobs.

Tuskalusa

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Re: FI in HCOL area- what are your plans?
« Reply #9 on: May 27, 2016, 06:56:57 PM »
We live in the Silicon Valley. We are following some of the same principles pointed out by other long time SV residents. Buy a house in one of the "lower COL" cities and work towards paying down mortgage. Get it to a manageable place so we're not at the mercy of rising rates.

We started out Type A but have found others that appreciate slowing down. It can be done, but I agree that it's challenging to find others who don't schedule huge amounts of activities.

With our families here, we have found ways to make things work, but we've had to take a longer view on ER. The good news is that we've found a way to drop one income, given our newly minted MMM ways!

AlwaysBeenASaver

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Re: FI in HCOL area- what are your plans?
« Reply #10 on: May 27, 2016, 07:55:29 PM »
I'm FIRE near Silicon Valley (I'm in the Santa Cruz area.) I worked longer to FIRE (til age 47; original goal was age 40) in order to stay here, because I like it here and my friends are here. We also don't buy into the consumer life I see so much around here, so although our housing is expensive, everything else is pretty much the same as the rest of the country as far as I can tell.

NorCal

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Re: FI in HCOL area- what are your plans?
« Reply #11 on: May 27, 2016, 08:52:08 PM »
NorCal, Are you planning on having kids?  Family nearby is very important!

We are both transplants, and it would be a huge luxury to have one or both grandparents nearby.

This is the biggest crux of it.  We have a 2 year old, and will likely have another.  Both of my parents are in the east bay, and we literally have local family connections dating back to wagon train settlers.

I'd personally love the Sierra's, but my wife is not on board with that.  A major consideration for my wife (and a minor consideration for me) is that our kids grow up in some type of metro area where there's exposure to families with professional backgrounds.  Not the Type A Silicon Valley assholes, but a good percentage with degrees, solid careers, and generally good life choices.  The Sacramento and Davis area's are certainly on the list, although Davis isn't so cheap anymore.

Livewell

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Re: FI in HCOL area- what are your plans?
« Reply #12 on: May 28, 2016, 08:14:15 AM »
NorCal, Are you planning on having kids?  Family nearby is very important!

We are both transplants, and it would be a huge luxury to have one or both grandparents nearby.

This is the biggest crux of it.  We have a 2 year old, and will likely have another.  Both of my parents are in the east bay, and we literally have local family connections dating back to wagon train settlers.

I'd personally love the Sierra's, but my wife is not on board with that.  A major consideration for my wife (and a minor consideration for me) is that our kids grow up in some type of metro area where there's exposure to families with professional backgrounds.  Not the Type A Silicon Valley assholes, but a good percentage with degrees, solid careers, and generally good life choices.  The Sacramento and Davis area's are certainly on the list, although Davis isn't so cheap anymore.

If we had family close, we would very likely not be thinking about possible moves.  We have a 4 and 1 year old...probably living similar lives to you all.  It wasn't a big deal when we were both engrossed in our careers, now it's a luxury we get only a couple times a year.  Don't discount having that a short drive away!  (Example, every date night costs us $100 more for babysitter)

As for having professional families exposure, every town has those.  The tiny norcal town I grew up in had plenty of business people, doctors, lawyers, realtors...   For our kids it's all about giving them options.  One thing I do think about with the Bay is that it increases the odds our kids will stay nearby and we'll have a chance to establish a "family base" like you describe.  I can see being immensely pleased by having that later in life.  If we move somewhere smaller and slower like my parents did, do the kids stay or leave for the big city opportunities like I did?  Perhaps I'm overthinking, who knows where they will end up and I won't limit them. Still trying to rid myself of Type A mentality.  ;)

The crux of it for me is this question:  "If I wasn't working anymore, would we still live here?"

« Last Edit: May 28, 2016, 08:32:39 AM by Livewell »

frugaldrummer

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Re: FI in HCOL area- what are your plans?
« Reply #13 on: May 28, 2016, 10:42:46 AM »
This is something I've wrestled with too.  At 60 I'm too old to actually RE, but I could retire today if I moved to an inexpensive part of the country.  However I expect I will stay in my So Cal coastal area.  My plan is to finish paying off my house (which, while just 6 miles from the beach, is in a somewhat lower cost community as it is far from the city center.)  Once the house is paid off, it's not really a high COL area any more.  Heating and cooling bills are quite low due to the mild coastal climate.  Prop 13 keeps property taxes manageable.  Low cost shopping is widely available.  Really only the state income tax makes it more expensive than some places.

I could always move and buy a less expensive house in the future, but right now, I have 2 family members living with me.  Another option in the future would be to rent out rooms in the house for extra income.

Actually, truthfully though, there's ONE thing that's more important than all the others that keeps me here.  I've played in the same band for the last 5 years.  It's a blessing to play with guys that all get along, have fun together every week, have the same work ethic, enjoy the same music.  It's such a rare thing that I would never move unless they die or move themselves! 


Jim2001

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Re: FI in HCOL area- what are your plans?
« Reply #14 on: May 28, 2016, 11:47:48 AM »
We live in a nice area of Los Angeles and plan to stay.  My FIRE plans include enough income to continue to pay the 4.25% mortgage (my portfolio returns on average exceed my mortgage costs without considering the interest deduction)  We've done extensive remodeling and the only reason to move would be to down size the maintenance (currently on 1/2 acre) by upgrading to an ocean view condo.