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this post was submitted on 30 Nov 2023
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Try making $150k in a "reasonably priced area." It can be done, but is not the norm. The problem is that to make a good salary, you have to be in a place that pays those wages. Obviously, this attracts more people, so real estate is more expensive.
The trick is to make $150k in some kind of sweet spot where housing does not compensate. But it's always a moving target and is extremely difficult. Then in you lose your job? Start all over again.
I started working remotely and then left America. Now I live in a very low cost of living city and haven't owed more than 1-2% taxes in years.. It blows my mind that more people don't do this.
If they did, it wouldn't be a low cost of living area for long
There are many low COL areas, so yes you can do this quite a lot.
Gentrify the planet.
Most people won't do something if they think it's "too hard," even if it will solve their problems.
Where did you go? And how do you not pay fed taxes working for an American company? Or is it a foreign company?
Georgia (the country) and Turkey mostly.
Qualifying for the FEIE (stay out of America for 330 days per year) means you don't pay taxes on the first $120k you earn. Maxing out the 401k ($22,500) will reduce taxable income as well so it's really like the first $142,500 is tax free.
I work for an American company as a W2 employee.
Thanks, looking to emigrate with a remote job, so good to know. Do you know if the FEIE is for any country or only select ones? And how hard did you find the entire transition in general?
The FEIE is only concerned about your relationship with America. It doesn't matter what country/countries you decide to live in.
As far as the transition, I didn't know it was happening until much later. When I left America it was to travel full time. I wasn't specifically going to one place so saying goodbye to friends and family was like, "I'll be around. Catch you guys later." 2-3 years later I was thinking to myself, "Oh shit.. You're like.. really gone."
For work, I hold myself pretty strictly to working on US east coast hours so there is as little friction as possible with the employers. I moved my phone to a virtual provider and updated all banking and W4 paperwork to use a mailbox service in Florida (no state level income tax in FL).
You do get very bored with tourist stuff though. I think I would rather die than set foot in another museum or see some old building or religious site or whatever.. Now 100% of the travel I still do is to see people I care about.
Good luck.
You just explained how work from home jobs will transform how people buy housing and where they buy it.
Let's pump up the flyover real estate market?
Yeah, my job went remote in 2020 and this year I moved out of the city and just bought my first house in my home state where the cost of living is almost 1/2 of my former city. I ~~could've~~ would've never bought a place where I was before. I'm sure someone would have loaned me the money but that felt like a death sentence for my small amount of disposable income.
I make $150k and learned to manage a very strict budget living in the city. Now I have some disposable income and my own house with a yard.
Because in your world, mobile home trailer parks are free or even exist in urban areas. Come on. A studio apartment around here starts at $1600/mo. The average home sale price in this area in 2022 was $580k. At 10% down, 30 year fixed, at 6.5% interest, after taxes and fees, that's a mortgage payment of about $4000/mo. Plus about $300-600/mo if you have an HOA/COA. Plus repairs as needed.
Your net take home pay at $150k, after taxes only, is about $9k, making your mortgage 45% of your income. That doesn't include health insurance, retirement, or any other paycheck deductions.
It doesn't include transportation: payments, gas, repairs, tolls, or insurance.
That doesn't include utilities: gas, electric, water, trash, phone, or internet.
That doesn't include food, supplies, clothing, or personal care.
And it sure as shit doesn't include medical issues. God help you if you're a diabetic.
And kids? What are you, fucking Rockefeller? Daycare, schooling (yes, even public schools cost money because of all the extras they ask you to provide like supplies, lunch, etc), and all their needs. At at least 16 years before they might be able to pay rent, that's a long time for a free tenant sharing your resources.
Plus all of life's extra costs.
And looking at Zillow, I can't find any properties within 10 miles of me going for less than $600k. They got townhomes for 1.2 million just down the block. $580k for a house is gonna be hard to find, and probably not in the best condition. Doable, possibly, but not easy.
My salary is $160k in the most expensive region in the country. My total yearly expenses don't exceed $50k, $20k of which is rent. The rest maxes out my 401k and goes towards a house down payment fund. I have a $30k emergency fund in case I lose my job which gives me 9 months of runway.
I'm not a nomad by any means. I have very nice things and I spend a grand a month on wants (eating out, my hobbies, whatever else I impulse order from Amazon), but I'm extremely aware of all my purchases and budget out every transaction at the end of every week. Hell, I just spent $2k on Christmas to get my family very nice gifts, but I've been spending less and sacrificing wants the past few months to offset that to prevent lifestyle creep.
This is a financial literacy problem, not a $150k is not a lot of money problem.
ETA: I split rent 50/50 with my partner in the California Bay area for a decent-sized 2b2.5b townhouse. My friends who do have 5 housemates, as so many of you seem to think I do, pay $1050 a month in rent, or $12.6k a year.
You live in the most expensive region of the country but you only pay $20k in rent? Is your idea of "most expensive" Akron or something?
No, I bet he has five housemates or something.
I live in the California bay area (not going to get more specific than that), and split rent of a townhouse 50/50 with my partner. I live in a stupid bougie area too, so I'm not doing myself any favors there pricewise.
You cannot get a SFH here for under $2 mil, and our townhouse we rent is worth well over $1 mil. I could easily afford the whole place by myself, but that would be financially irresponsible. I was very fortunate to be taught at a young age that being able to afford something does not make it a good or okay use of money.
If I weren't living with my partner, I'd get a one bed or studio apartment for ~$2200 a month, or an extra $6400 a year. Unless someone took on a mortgage way larger than they could actually afford (again, a financial literacy issue), or has an extremely expensive medical condition, I have 0 idea how anyone could be paycheck to paycheck on $150k a year and unable to massively cut back. The world is expensive, but it ain't THAT expensive.
To get a townhome in the bay at ~2k a month is a complete outlier with respect to rent. I live in a similar COL area and the cheapest you could rent that kind of space is for ~3.5k monthly in the present market.
I didn't say I got a townhome for ~2k a month. The place I split with my partner is $3300 a month, and if I didn't live with them I'd get a smaller, much cheaper apartment.
Edit: Alright everyone can go on believing you need a million dollars a year to scrape by in the bay area lmao. I'm done responding since everyone already has their minds made up about what it's like here, and somehow saying I could get a studio or one bed for $2200 is the same as a whole ass townhouse.
I just hope more people can learn to be good with money, and we can stop this terrible capitalistic cycle of consumer over-spending and debt.
How many housemates do you have?