So I understand that certain roles, specifically within EBs, require being on-site and within those cities.
This exception aside, why would anyone do BB / MM banking in one of the aforementioned cities? You pay astronomical COL, live in a 10x10 cube, struggle with big city issues (pollution, homelessness, crime, lack of nature, lack of space for physical activity, etc.), and pay astronomical taxes. Overall, I'd bet what you put in your bank account is less than 90%+ of "Tier 2" city bankers (source: my own opportunistic recruiting calls), and for what? To tell your friends that on paper you make 10% more than they do? So you can claim you "made it big" by living in a finance city?
I know my judgement is harsh, as it's intended to be. Frankly I'd love if banks stopped with this nonsense of having to set up their no-name MM or random BB team in one of these shitty cities, because lateral moves would be much more appealing.
Maybe I'm different - let me know if I am - but a large home more in nature with a nice car and a moderate drive to the office on hybrid days sounds way more appealing than having a penthouse downtown and spending 99% of my time inside buildings with no tangible assets to my name. Who needs a weekend in the Hamptons when you can just live in an area like that, elsewhere?
If any MD reads this, hope you get the message. I understand the old way of doing business where you poke your head into different buildings and see someone for lunch, etc. Instead of these random interactions, these can be replaced with doing 1-2 week long "tours" in the cities where you are doing business. These intentional trips will yield the same if not better results than random drop-ins, because they're intentional, planned out better, and clients like that you made a whole trip out just to see them. Why do I know this works? I've seen it - never lived in the above cities my entire banking career.
Cities are just fun to live in. Different strokes for different folks, but I'd rather be in a dense urban area with endless world class food, art, nightlife, shopping, etc. as well as the opportunity to meet the brightest and most interesting folks from just about any field and part of the world imaginable. You're obviously sacrificing a lot to be there (as you noted) but for a lot of people it's absolutely worth it.
Also, I disagree that an "intentional" tour is better than being in person in the office. The whole reason "hybrid" doesn't work and companies are pushing for 5 days back is because the value of in person presence comes from spontaneous and serendipitous encounters that are impossible to replicate without spending the majority of your time around other people.
Can understand the "different strokes for different folks" reasoning, just had to advocate.
Regarding back to office 5 days - strongly disagree with this take. Random interactions are easily replaced with random calls, zooms, etc. so long as your team has the right culture. It also has breathed life into some of the introverts on our team, who feel they have a bigger voice in calls than in person when they're typically talked over or sub-groups form with natural exclusion of introverts.
I'm a strong advocate of a 2-3 day per week hybrid for the comfortable balance. Full deal team in office on those days to encourage interaction.
And lastly, the 1-2 week intentional visit was aimed towards MDs trying to drum up business / manage clients in-person.
Shhhh don't give away the secret...
Don't you want more opportunities for lateral?
No because I'll have made enough money to "retire" or take a break to something more chill in several years without worrying about savings
Was born in the area and family still lives in the area. It’s potentially a decent way to at least earn a living and/or start a career while being close to them
That's a good reason!
Thanks
Prob going to be a hot take nobody asked for, but I think ideologically, nyc embodies a lot of what's gone wrong with modern-day America. Places like NYC/SF used to be reasonably affordable places that truly brought together people from all walks of life. Everybody always pitches NYC as the most diverse city in the world, but is it really?? NYC is now only viable for the subset of people who can afford 3k+ rents with studios starting at 750k+. It's p shocking that without family money, even the "greedy, rich" bankers can't even afford a 1br 1bath in a nice neighborhood until they hit ~VP level. NYC used to represent the social mobility and the opportunities unique to America, but it's increasingly looking like a playground for models, finance bros, or trust fund kids. Likewise, Silicone Valley used to be a working class neighborhood with engineers (who previously weren't paid 6 figures to screw around with company perks all day). People like steve jobs's parents never would've been able to afford to live in Palo Alto based on today's prices, and it's a testament to declining social mobility and slowing innovation (seriously, why do we need 10+ undifferentiated food delivery apps??). We as people in finance no this better than everyone--"financial engineering" = cooking the books to make companies look better on paper. Hopefully, I'm wrong about all this tho
this is the coldest take i've ever read.
as someone who moved to New York....what I don't get is if this city is so expensive (which it is), exclusive, and a playground for the wealthy, why do I see sketchy shit that makes me feel uneasy every time I step outside my $5k a month one-bedroom? It's an odd place, you can't beat the culture / food / entertainment scene, job opportunities are crazy and dating here is unparalleled but it's also a cesspool in a lot of ways.
Because it's a classic case of an hourglass economy--government policies and technological transformation create a larger upper and lower class with smaller middle class
In NYC, property tax policies are extremely favorable to the mega-rich to the extent of being regressive--despite being a liberal city (https://www.bloomberg.com/news/articles/2015-05-11/why-billionaires-don…)
On the other hand, there are rent-stabilized units and housing projects designed to help lower income people
And then homeless people will always live in nice cities because it's free anyway
Notice that there are basically no provisions designed to help the middle class afford the city?
I know I sound like a raging socialist, but you have to admit NYC is a case of capitalism gone too far
haha I also noticed that you're a VP which references my point about affordability
Was that a hypothetical example about renting? If not, what's stopping you from buying?
anarcho-tyranny and the managerial state.
NYC is more than just Manhattan and the median household income in NYC is around $70k.
I've also heard that statistic before but how is that possible? How is it that the median income is 70k and the median rent is 3.5k--something doesn't add up there esp given the 40x rule which would limit people earning 70k to a maximum of 1.5k in rent/month
chicago is super cheap, you can have a spacious nice-looking 1 bedroom for like $1400. are tier 2 cities much cheaper?
North loop?
Generally, yes
N loop doesn’t exist brother…
Wtf is north loop
uptown
As someone that started their career in BO and am now in NYC I think people oftentimes overestimate the "bountiful T2 opportunities" that pay 85% of NYC opportunities in areas where COL is 50% less. They exist but they're limited to very few types of jobs and oftentimes a stint in NYC "high finance" can be a pre-requisite.
In 3 years I've received 3 promotions and my comp has grown 3x. For me, the professional development alone makes any COL I've incurred worth it. Layer in the social / cultural / cuisine aspect and I'm very happy to live in my shoe box in the sky with an amazing view.
Don't get me wrong, I don't think I'll be a lifer but NYC in my 20s has been a great experience.
Edit: I also want to add that the "big house and white picket fence" dream isn't for everybody. When I was very young we went through financial difficulties. By the time I attended High School my dad turned his business around but we lived in everything from a small apartment to couch surfing with family (8 of us in a 1 bed + den) to a massive house with rooms that went unused year-round. Living in NYC I'm rarely ever sitting at home lounging around. I view my "tiny 1 bedroom" as plenty of space. Whether the square footage is worth the cost vs. other areas is a different discussion and I partially addressed it above for my own experience (worth it).
Yes, there are actually plenty of opportunities that pay in line with NYC in lower COL cities--I'm not sure why you would expect COL to be 50% less--that seems p unreasonable, considering even a 25% cost of living reduction equates to being 25% richer which is already an impressive arbitrage
For one thing, most MBB have offices in T2 and even T3 cities that pay 100% what you would get in NYC while still doing the same work as people sitting in NYC
I'm not sure how the city you live in substantially impacts professional development. In my mind, professional development depends on your colleagues/mentors you work with--all of which still exits in lower COL cities. Obv I'm not arguing that Wichita has the same professional development opps as NYC, but there's no tangible difference in development opportunities between CHI/DTX/HOU/AUS despite being ~25% cheaper
MBB classes are generally much smaller in secondary markets and they often have hiring preferences for people with ties to the area; this is even more true for finance and law.
Professional development doesn't just depend on your coworkers, it depends on your friend group and people you meet serendipitously, and the other jobs available in your city. NYC, DC, Boston, etc. have a much more liquid set of job and career opportunities. If you live in Richmond or Pittsburgh it's going to be harder to jump or leave a bad job compared to DC.
I guess we'll have to agree to disagree.
I will concede, however, that my original intent wasn't to limit the universe of alternative cities to those that are 50% the COL of NYC, that was just a random number I threw out haphazardly.
I think folks on this chain are viewing this purely as a mathematical exercise when in realty there are tons of other factors (where your family lives, the lifestyle you want and enjoy, where are your friends located, if you're in a relationship then you double the variables to accommodate your partner as well, etc.)
When you start accounting for all those variables and then cross reference with your own interests, skills, pay expectations, job availability, etc. then the pool of options starts to dwindle relative to massive cities. Purely on a probabilistic basis most folks have friends / family on coastal cities given population distribution.
One anecdote so take it for what it's worth but I moved from a LCOL to NYC within the same company and although the people were consistent the breadth of opportunity to network, work with other teams, volunteer, ease with which I can nudge someone for a coffee / drink / dinner / etc. was night and day. Shit... I've had 3 job offers that I seriously considered and all 3 originated from shooting the shit with people either in my building or at the gym / organized sports.
Now, one might argue that's a chicken and egg problem, if everyone all of a sudden picked their lives up and started moving to CHI / DTX / HOU / AUS then I would concede the point that city doesn't matter. Fact of the matter is it's just rarer to run into people like that in more rural areas.
25% COL cut actually isn't 25% richer. That would only be true if you were living paycheck to paycheck. Someone in NYC making $500k might only be spending $100k a year. So in the 25% cheaper city he's only saving $25k by moving there. Even on a post-tax basis, you've only made him 10% richer with that 25% cut.
And that assumes he didn't give up any quality of life by moving to the cheaper city. In reality, he did. Whether it's less interesting people or fatter girls or fewer career opportunities or whatever. So the COL trade is really a lot less attractive IMHO than it's often made out to be, and I would never call it arbitrage or anything else to imply that it's a free lunch.
So true. I've always felt the COL play is one of the bigger scams out there. Two things the COL play overlooks:
1. Savings. If NYC is 2x as expensive as your city, you don't need to make 2x your salary in NYC to break even on the trade. You only need to 2x your spent dollars and then 1:1 on saved dollars.
2. More expensive cities are more expensive for a reason. You're getting stuff in return for that COL. That stuff could be weather, social life, career opportunities, "energy" or whatever. Point is, you get what you pay for to a large degree.
Comparing MM offers only because larger sample size for me:
I've received 3 offers from NYC MM. I've received ~5 (can't recall exact) from T2 cities. There has never been a T2 city offer less than 90% of the NYC offers.
Never got an offer from SF because I don't recruit there, ever.
BB / EB there's not enough sample size for me to compare accurately, and also will note that satellite offices for BB in T2 tends to be MM teams that work on less prestigious deals / outsourced pitch team, so less pay makes sense.
I work at a MM in a T2/T3 city and get paid the exact same as my coworkers in NY/SF.
Save more, drive a nicer car, and live in a nicer / larger space. Closer to the outdoors and family. Hard to see the value prop for moving to a T1 city.
First of all, can you elaborate on which T2 cities you are talking about? Many of the T2 cities are really fairly undesirable. You are clearly not talking about San Diego, Austin, Seattle, etc., as many of those cities have a relatively HCOL associated with them as well. So I am assuming you are referring to what are really T3 / T4 cities (e.g., St. Louis, Milwaukee, San Antonio, Nashville).
With these T3 / T4 cities, unfortunately there isnt a ton to do in many of them. Yes, they still have bars, restaurants, and museums, but not of the same caliber or variety.
Additionally, you need to bifurcate those who opt to live in big cities for their 20s vs. lifers. In your 20s, it makes sense as oftentimes you will get the best looks and largest number of opportunities working out of a big city. I think many folks would opt for the NYC banker vs. the Idaho banker, all else equal. Working in big cities implies a certain degree of efficiency and candidate quality that is simply higher than T3 / T4 cities. I say this as someone who has never worked in NYC, but understands the value of consultants and bankers beginning their career in the big apple.
Lastly, I find Chicago to be far more affordable than you imply. While I dont work IBD hours and can afford to live a bit further from the financial district, I still work long hours and have a modest rent as a % of my salary. My housing accounts for roughly 10% of my PRE-tax income, and I am not roughing it by any means. This includes parking, an office, and a backyard (to be fair I do not live alone). Additionally, there are still bars in my neighborhoods that offer $2.50 lite beers (pre-Covid at least), so I feel like thats a pretty good indicator of food / nights out being reasonably priced. Do you mind elaborating on why you lumped CHI in with SF / NYC? You should do a COL comparison to understand how different CHI is from NYC / SF. IMHO, the 3 most expensive cities are Seattle / NYC / SF, with Chicago being around #10 in terms of COL. See this link for reference, it turns out CHI is #25
I'm almost surprised that CHI isn't more expensive, considering it's the third largest metropolitan area by GDP but far from the 3rd most expensive
Many cities in the Midwest (including Chicago) and the Rust Belt cities (Buffalo, Pitt, Cleveland, Milwaukee, etc.) were designed for a much larger population than currently exists today. Developers and urban planners were working off of peak population numbers at the height of US manufacturing and projecting forward. Because of this the amount of apartments/houses available in the city and places you can reasonably live given the city infrastructure are much higher than what is being currently occupied today, hence the relatively low (or even bargain prices).
Many other cities that have been expanding and seeing prices soar had a lot of SFH and even mansions relatively close to the city center. The city center itself often won’t have many high rise apartments, public transport sucks and the roads are simply not designed to handle the amount of people so you’re either faced with a long commute or have to pay and arm and a leg. Urban planners had very little expectation for the city to expand and with NIMBY and zoning requirements it’s hard to change things reactively.
Chicago does feel cheap for what it is. But a lot of people find the cold weather unbearable. And another issue, less commonly discussed, is fiscal overhang. This is more relevant for home ownership there. Property prices appear insanely cheap compared to other top cities, but a piece of that is the fact that the city is facing some terrible financial projections and it's assumed property taxes will be raised to cover the bill. It's the one tax people can't escape by moving.
All that being said, Chicago would be high in my list if I had a work-from-anywhere job. Tough to beat from a value perspective. I just wanted to highlight why it's not the screaming buy it might first appear to be.
This.
Having lived and worked in both Tier 1 and Tier 4 cities this has been my experience:
Because of their pop. volume Tier 1 cities naturally thrive on rapid social mixing. They subsequently allow career arbitrage to take place due to an individual's exposure to complex projects and complex social structures (fog of war). This increased complexity also allows people the opportunity to accumulate experience faster and use that to then move between industries and roles supported by wider social networks built around shared experiences with others in the city's cultural environment. Shared experience formed out of a mutually new experience creates a very deep bond between people.
By contrast you can imagine that in a more static environment such as a smaller city (lower pop. volume=lower rate of social/cultural change), entrenched social structures, local familial power, multi generational business dynasties make it difficult for an individual -who is outside the power structure- to exploit any sort of rapid change for ones benefit.
In summary, higher rates of change result in more opportunities/optionality. This is a great environment to be in early on in your career.
Young single people like cities. Nice cars are nice except when you live in a place that doesn't require a car. Ditto for large homes.
Young and single here.
Truly believe Houston is the best city for IB. Nerdwallet says cost of living is 62% lower than Manhattan. Median 2br apartment is $1,200. Just about every BB and EB has a Houston office and comp is in line with NYC for the vast majority. Houston isn't as big as NYC but you still get a solid city vibe with tons of sports/shows/things to do. The only "downside" is if you really can't stand covering Energy but IMO as one of the most technical spaces going through a massive transformation there really isn't somewhere more interesting to be.
Based indeed my friend.
Another problem is that Houston is probably the worst city in the country to live in. Not a single thing to do (unless you count strip clubs and the sports teams), not a single museum, isn't possible to get anywhere without driving, terrible weather all year around
Oh man, all the museums that I go to weekly will be gone! What ever will I do not looking at things on display from what the local culture deeps socially important?
I don't want a car. I don't want to have to drive everywhere. I don't want to live somewhere dominated by parking lots, strip malls, and urban sprawl.
Give me a gritty, densely populated, vibrant urban ecosystem with crime, homelessness, public transport, connectedness, and mix use communities over LCOL suburban hell any day. Maybe my mindset will change once I want to settle down and raise a family, but for now I don't need a yard with a giant walmart down the road.
It's a good move; there are massive benefits to living in a dense, walkable city when it comes to dating and meeting people in your 20s. Easier to go to bars and more opportunities to meet people.
16 years in NYC, recently moved to Miami. Start your career in NYC if you have the option and spend some of your 20s here; it will probably be a fun time and fruitful for your career. See if you're a NYC lifer. For me: the value proposition has gone down aggressively the past handful of years and I'm probably going to buy a place in Miami this year.
After the novelty wears off in the first 5-10 years, you're left with a top-5 most expensive city to live in the US in terms of COL and taxes, but you aren't getting many quality of life improvements for what you're paying. Crazy taxes, long winters, dirty/polluted streets, dilapidated infrastructure, backwards one-size-fits-all progressive policies, and of course prohibitively expensive home-ownership options which makes having a family in Manhattan extremely difficult if you're not making $1MM+.
Housing: Homeownership (condo) in Manhattan is a joke in terms of what you pay vs. what you get. I'm the most financially secure I've ever been and could buy an apartment in the city but it's just not worth it. For the price of a studio or 1BR in NYC, you can have a 2000+ square foot 3 bedroom penthouse in Brickell or Edgewater (Miami) in a new building with tons of amenities. You'll still get to enjoy world class restaurants and a very vibrant nightlife, minus the winters, extortionist taxes, and crazy progressives. NYC landlords will continue to charge what you're willing to pay (read: take you to the cleaners on rent). Retarded Manhattan-middle-class finance clowns making 300K-500K gross, who think they're elite ballers, will continue to willingly donate 30%-50% of their after-tax pay for their elite 1,000 sq. ft. apartment with aMeNiTiEs, so management companies will continue to cash the checks.
Same applies for transplant gig economy workers whose entire identity revolves around BrUnChEs and the MaNhAtTaN ExPeRiEnCe paying 65%+ of their net earnings for a grimy Manhattan walk-up that hasn't been renovated since 1985, or alternatively rooming with 10 people while in their late 20s / early 30s.
NYC benefits are there's always stuff to do, a new restaurant to go to, a new lounge/bars, sports, etc. The city has an energy that no other city has. But like I said, the novelty wears off after many years and you're left thinking more about how much you're getting fucked financially through taxes and sky-high mortgage/rent just to freeze your ass off for 40% of the year and get told what to do by your mayor/governor who of course know what's best for you.
Where are the best areas to move to after NYC? Looking to move out in a couple years
Depends on what you're after. I'm loving Brickell (Miami) so far.
This isnt really possible for folks wanting a long term career in becoming an MD at a bank or Partner in PE as most funds and banks are concentrated in NYC
Let me guess: you are also a fan of Keith Rabois and think that white men aren't treated fairly by "damn liberals?"
I don’t know who that is
I'm literally trying to move from NYC to Texas or Florida right now.
It's just not worth it.
How is it not worth it?
It doesn't make rational sense. You either have to be irrational or have much better long-term career lift from being located in those cities that the short-term cost is worth the trade-off. (i.e. on-track to become MD at KKR...)
Y’all are sleeping on Texas!
If you're a single dude, there's absolutely no better city in the world to be than NYC. I've lived in 8 different cities throughout my life (midwest, west coast, northeast, international), so I have a good amount of reference. The percentage of attractive women in NYC is insane, never seen anything like it. Not only that, but the women somehow outnumber the men (think it has something to do with girls romanticizing the idea of moving to the big apple). On top of that, the women out here value prestigious education and high-paying jobs, which obviously plays in your favor as a banker. Back where I'm from most people are only familiar with H/Y/P/MIT and maybe Stanford as prestigious universities, and most have never even heard of investment banking or private equity...sounds crazy but I'm not exaggerating. My hometown is ~100,000 people, and it's about 30 min from a major tier 2 city, so it's not like I'm from bumfuck nowhere either.
Bottom line, NYC provides you with unbeatable professional opportunities, networking, and social activities. And if you're a halfway decent looking guy, this city is like a fucking playground...
Where/how do you met women
Mostly Hinge, bumble too but not as much. Occasionally meet women through going to bars with friends but prefer to set up dates through the apps
Sounds extremely sexist but what else to expect?
The real reason is because New York is home to many industries (publishing, fashion) that historically has higher percentages of women. This is why they somehow in total outnumber (slightly) men.
Please help me understand - how is me assuming women are more attracted to living in a cultural/international metropolis “extremely sexist” in your eyes? Not being facetious here, honestly puzzled as to why that triggered you..
I moved to NYC because I heard it was easy for dating. Now that I still can’t get a date, I can confirm that I am indeed ugly and undesirable. Very fun city
Edit: The fact that this city is filled with some of the most beautiful women in the world makes everything even more depressing tbh
Don't be hard on yourself. Here's what I did:
a. Use photofeeler and set it for girls in your age range only to rate your photos. Post a bunch of photos that you are using for your profile. You'll be shocked at which ones girls like vs hate, they do not think / perceive like guys do so the photo you think is super boss probably isn't it
b. Get an attractive girl who's a friend to read over your profile, they'll happily give you feedback like 'this sounds creepy', 'this sounds douchey' etc and it'll help a lot
There are MM banks with significant presence in cities like Minny/Little Rock/Cleveland/Tampa/Richmond.
EB/BBs have satellte offices in non NYC/Chi/SF cities.
Found the one guy who works at Stephens. Good luck getting anybody on the planet to choose to live in Little Rock for any other reason than a job.
Don't work at Stephens or in LR, but LOL'ed @ your comment.
I eventually lateralled as an M&A ASO1 from a less traditional banking group, but when I was getting into the industry I would have recruiters tell me no after I said what group I was in (Valuations). I finally had it and sent an aggressive message to one recruiter about being able to do the job, etc. etc. etc. He eventually came back and was like "OK, I'll put your name forward. The job's in Little Rock, is that ok?" And then I ghosted him. I wanted to be in banking, but didn't want to do banking in Arkansas.... I stand by that decision
You have things backwards.
Most of this is you complaining that these cities are expensive, and therefore nobody should want to live there. In the case of NYC, it is expensive because everyone wants to live there.
By the way, it's very weird comparing NYC and SF to Chicago. Cost of living in Chicago is about the same as it is in Dallas, or Philly, or Phoenix.
*edit - if you want to live anywhere worth a shit in Chicago. There's not many areas.
You're missing the point. Does everyone want to live there, or does everyone want the jobs that are there? This is the real question.
If these jobs existed elsewhere, would anyone willingly choose these cities?
Chicago shouldn't even be in the same convo as NY and SF when it comes to COL. Chicago should be considered one of the incredibly viable alternatives.
Do you mean in terms of just COL? Obviously peoples' biggest gripe with Chicago is the terrible weather and insane crime.
It’s more prestigious. More going on. Better shopping. Better exposure high finance. Larger pool of intellectual capital. Better looking people and more of them. Better restaurants. More things going on. There’s something ambitious about it - wanting to jump into an ocean rather than lounge in a pond. It’s seemingly where the most important people are. I don’t exactly understand why people prefer small cities.
Hard to articulate it. If you get it you get it, if you don’t you don’t. You either romanticize it or you do not.
There is a reason movies are shot there and not in Little Rock Arkansas.
Your first three words pretty much summed up everything. Guess NYC is better for those with massive egos
If you want to be around below average looking women and spend your weekends at TGI Fridays after leaving the strip mall then so be it. Different lifestyle. Depends what you’re living for at the end of the day. A life in a big city is far more interesting. I guess it really comes down to interests and ambitions.
The only thing getting shot in Little Rock is you trying to go out on a Friday night
90% of the posts on wso and on this thread are from the sub 200k transplants who move to NYC who think they have an in and know the real secrets/deals in NYC and really don't. There is a pretty high amount of rent controlled apartments in Manhattan but you (transplants) don't hear or know about them because these locals don't bounce apartments every month. Case in point, one of my buddies dad is a cop, mom is a teacher combined income around 70k after taxes and he grew up in a rent controlled 3bed in greenwich village that went for 1500 a month. NYC is pretty affordably just not for those who just moved here to mess around in their 20s.
The fact that bankers making 200k+ a year still need to actively seek out rent controlled units is the epitome of how messed up NYC is economically--hourglass shaped social hierarchy which basically divides everyone up into: 1) proletariats--w2 employees who will rent for the rest of their lives and are therefore enslaved to their jobs 2) Bourgeois--rent collectors that sell you on the dream of making it big in the big apple
Everyone goes to NYC to live out their fantasy of making it big, but for 99% of people, you've just been suckered into a trap for the bourgeois to suck the money out of you
Well that is the thing isn't it. The population subset you are referencing is less than 200k people out of 8 million in this city. I could care less what someone making 200k+ is struggling to pay in rent when there are people out trying to make 30k work (and do in NYC). If you want the glitz and glam of eating out and clubbing all the time (which most normal families do not do) it comes at a cost.
Secondly, there are plenty of rent controlled options on the market but thankfully, very well guarded and kept secret by locals. Else pirates like you are going to swoop in. I live in a rent controlled building in LES for 1000 a month where the owner also lives in the townhouse I live in. Also know of 5-6 other R/C apartments that simply do not come on the market because the landlords want to rent to families.
Because they’re hubs of human activity. We’re innately social beings and when young people love the buzz, the rush and everything going on.
When we’re older inherently we want more peace. We’ve lived the “fast life” and desire to take it easy in our grey years.
CHI is both a solid alternative to NYC and SF, and also more expensive than one might think.
The issue is that the nice areas are still pretty expensive, especially when considering real estate on a tax adjusted basis. The COL calculators you see pick up real estate in places of the city where white collar transplants would never live.
If your over 30 and think NYC is a great deal from a personal finance perspective you are a moron. Once you break six figures in Chicago or any of the other 'lower cost' cities you could prob handle the mortgage cost on your own with money to spare. Good luck trying to make that happen in SF or NYC.
NYC is definitely worth it if you're young, have no kids, and am ambitious on building a career.
It is absolutely not worth it once you have kids. This is where expenses begin to rapidly multiply. A family of 4 would need at least a 3BR apartment to live comfortably. Go look at how much this costs in Manhattan. Oh yeah, and schools. The NYC school system is completely broken, so you're stuck with private school, paying $60K+ a year per child for 13+ years. This is over $1.5MM for two kids without factoring in interest.
So then you look to suburbia (Scarsdale/Bronxville) for top public schools, with an advertised 30 minute commute to Midtown. Only problem is the 30 minutes is just the time on train; it excludes time getting from home to station, and Penn/GC to office. And Metro-North is not a subway that runs every 3 minutes; think more like every 30 minutes - you would need to plan your day/meetings on when the train to North White Plains runs. What if your spouse also has a white collar job? Tri-State jobs have increasingly been flowing back into Manhattan so they would have to commute as well. Having both parents commute 1 hour puts a huge strain on a family. No time to see kids or cheer on their games. People genuinely underestimate how much suburban commuting into NYC will take a toll on their lives.
BTW - these suburbs are not cheap either - think $2MM and $50K property taxes for anything decent. Still cheaper than the City, but someone not from money would still need to make nearly MD-level money to afford these places. The days that a run of the mill MD can come from nothing and afford an UES apartment + Hamptons mansion are unfortunately long gone. These people typically live in suburbs like the ones mentioned above. Definitely a nicer setup than 95% of the US population, but still discouraging considering the sacrifices they must have made to get to that point.
Don't know why anyone not originally from the area would subject themselves to this. Definitely make the most of the opportunities in your 20s, but try to network out into a lower COL when the little ones arrive.
Wow, we finally found an adult in the room. Congrats sir, you have made perfect sense.
Imagine that not everyone builds their life around having a family and children, though...
Well said. I’m from NY suburbs originally and didn’t want this life. I decamped to Texas years ago and it’s infinitely better
Did you just call Chicago HCOL?
I was born in a LCOL Midwest City. Obviously I see the benefits: namely cheap-nice housing, crazy what $1M can get you here.
Though as I’ve lived in the northeast, it’s crazy the cultural amenities and diversity you experience here. It’s definitely worth it in my mind to live here for 5-10 years and then move to somewhere more reasonably priced
True, guess that's part of the frustration, as you get older still crave some of those HCOL areas for the more cultural elements
Put simply: preferences.
You clearly view the lifestyle found in T2 cities to be greater than that of T1 cities, but many people do not.
T1 cities maintain a greater variety of experiences - from cuisine, to nightlife, to museums, etc. - of people - given that such cities serve as global hubs of culture and talent - and of opportunities - such cities consolidate every conceivable career path into one place.
For some people those, and similar, traits outweigh the negatives of a T1 city, and for others they do not. You are clearly the latter, but it is foolish to assume that everyone values the same things to the same degree as you.
Well, obviously. But who garnered attention to a conversation by being agreeable?
We're salesman, after all.
So everyone who's been saying NYC is terrible for a family. What do you do if you're trying to be a long term MD, Group head, global group head, C level, etc
Westchester
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