153 comments

How To Afford a House These Days

The other day, an MMM reader stopped by and left the following comment on one of my older posts about the principles of FIRE:

“While I still find some of MMM’s advice relevant, it seems like every FI blogger out there worked in tech 20 years ago, pulled down a 6 figure salary and bought a house for a bag of potatoes before 2019.

I wasn’t smart enough to find FI when I was young so I sometimes feel like a lot of their advice is not going to help me or others who don’t already own a home and don’t have six- figure salaries in this post-pandemic world.

 A lot of the ideas given to young folks are “house hack” “buy a fixer upper” but that is still out of reach and/or complex to navigate with current prices and interest rates. Most townships around me do not want you to chop a house up into ADU’s or multiple units. My cousin owns 60 acres of land but he is not allowed to live on a trailer on that land.

 I don’t know what the next generation of FI bloggers will offer, perhaps they are already out there and I just don’t know who they are, but I’d like to hear from them.”

As with every critique of our ideas, I thought about this comment for a while. Tried to determine if there were any Principles of Mustachianism that were genuinely going obsolete, versus the more common side effects of Complainypants and/or Excuse-itis, two afflictions which have been weighing down our critics since the beginning. 

After all, this isn’t the first time FIRE has gone obsolete. Over my retirement I’ve seen it:

  • written off as just a phenomenon of the lucky winners of the 2000 Tech Boom
  • declared obsolete after the 2009 Financial Crisis
  • dismissed as a temporary fluke of the spectacular stock market of the 2010s
  • and explained away as a Covid-era side effect that came from the taste of freedom that people got from remote work.

So what’s the situation right now? 

Our commenter focuses on two things: the solid salaries of tech workers, and the major increases in house prices (and interest rates) in the most recent four years. 

The first one — high salaries in general – is still a factor and I don’t expect that to change. Some jobs just pay more than others, and there’s a lot you can do to increase your income and switch jobs, and I’m all for it. However, ever-increasing income is not my usual focus here on MMM, because I have seen first hand that most people can waste almost any amount of income and still have very little to show for it. 

In fact, the very existence of software engineers and doctors and other high earners who are my age who are still feeling financial stress is proof this: it’s mathematically impossible to earn so much for almost 30 years and not have an absolute shit-ton saved, unless you are also spending an absolute shit-ton of money the whole time.

So instead, we focus on how to streamline your spending and live joyfully and efficiently without compromise. We focus on reducing waste, while maintaining or even increasing all of the other benefits that come from spending money more purposefully. These skills are essential even for the highest earners, but they become even more valuable as you move down the income ladder.

So now for the second issue: housing. Does the state of housing here in 2024 screw up the whole FIRE plan? 

As with any question, let’s start by looking at the data: how much have US house prices actually risen – adjusted for inflation – since 2019? 

It turns out that our own St. Louis Fed makes this extremely useful  information available here.


So there’s our answer: houses “feel” about 25% more expensive right now than they did at the start of 2019 relative to the average salary and the price of everything else. Although interestingly enough,  they are only up about 10% since the last peak in early 2006, a full eighteen years ago! So housing is a blow, but not a FIRE-extinguishing one.

However, this nationwide data masks some much bigger increases in certain popular cities, including my own: Plain old Longmont Colorado now sports a hilariously high $540,000 median home price. This is about triple the price they were when I started writing in 2011, which means houses are much further out of reach for the average person in my area.

House Shopping With Your Middle Finger

The solution to this is the same as most other problems: to stop thinking in the way our culture likes to train us (as a victim of outside forces beyond our control) and go back to thinking like a Mustachian. 

Houses are just like any other manufactured product, and as such they come at a wide variety of prices, subject to supply and demand. 

And just because you happen to live in a certain place (even if you were born and raised there), doesn’t mean you’ll automatically be able to afford to buy a house there. Just as a baby born upon the Apple campus in Cupertino today doesn’t automatically get a new iPhone Pro Max every year. 

With every purchasing decision, you need to go through the same series of choices:

  • Can I afford this thing right now?
  • Do I need/want it enough to buy it?
  • Are there any alternatives to meeting those same needs, and what are their pros and cons?
  • What’s the best way to procure it, after considering all the points above?

So when it comes to houses, you run the numbers, then decide between renting or buying or house hacking. You might start by doing the analysis right in your own city, but also keep in mind that there are lots of other cities and even countries in the world, and there are happy people living in all of them. 

But Wait: I don’t want to move to a whole new place!

At this point, people get defensive. We all have ties to our current location, and the stronger the ties the more difficult it becomes to consider moving. 

But there’s a difference between genuine, positive bonds to a place and just plain old fear of change. So it’s my job to at least make you question your assumptions, because not doing so is what got you where you are, and it’s also what got our country where it is.

And on a country-wide basis,  I notice that our general fear of relocating creates a very irrational pattern of house prices. They are ridiculously high in some places and ridiculously cheap in others. There does seem to be a general correlation between niceness and cost, but not a perfect one (especially since everyone has their own definition of “nice”)

And that’s where the opportunity lies.

Example:

I moved to Longmont in 2005 because it met our young family’s needs at the time, at the right price with homes about $200,000. Today, at the $540,000 price level (houses average about $450 per interior square foot) it has to compete with a much broader range of cities which offer nicer amenities at equal or lower prices. 

Let’s do a hypothetical search using another amazing tool: FRED’s list of the top 1000 metro areas with price per square foot, and plot some of them based on my own judgment of their desirability: 

I’m biased towards Colorado because I have so many ties there, and I also highly prioritize sunny climates. My chart suggests that if I wanted to save money, I might start looking around in Albuquerque, whereas Denver would give me a nicer life in the same price range, and if I were willing to spend more I should suck it up and move to Boulder.

Just for fun, I pulled the data from that same FRED website into a separate google spreadsheet (which I’ll share here) and sorted it by cost per square foot. Then, I highlighted a band of affordable cities with housing centered on the $100 per square foot range, which would mean a 2,000 square foot house is about $200k.

As an added bonus, I added a column to calculate the change in house prices over the past year, just in case it helps us see if a city is on the way up or getting cheaper at the moment.

A chart like this is just a starting point – you’d need to read more about any place and then go visit in person before considering a move. But the idea is to start with data, and do some fun research. 

The Earth Awaits: Casting a Worldwide Net

House prices are a valuable metric, because they influence the cost of living more than almost anything else for the typical Mustachian. After all, biking and nature are always close to free, Costcos are available nationwide, and we probably care less than average about the costs of other services like valets and salons.

But there’s still plenty of value in looking at the bigger picture, considering more data points, and also being open to renting versus buying your housing. For this, I’m a big fan of a FIRE blogger-created site called The Earth Awaits, and we can take it for a test drive right now with the following search criteria:

Geographic area: North America

My total monthly budget: $0-$6000

Family size: 2

Apartment type: Two bedroom (outside city center)

Temperature range: January lows not colder than 10F

The exact parameters don’t matter too much, as long as you don’t make them too narrow. The important thing is the resulting list, which is meant to give you ideas to research further. For example, that first simple search gave me this list:

Hey, that’s interesting. I like how the site shows the population right on the main list, because that provides a big clue to the “feel” of a city. I personally like the feel of a 50k-200k person town, so I might look into Fayetteville, Columbia or Athens. I’ve also been to Chattanooga and really like that place – who knew it was only about as expensive as Columbus Ohio?

So Should I Move?

In the end, your physical environment – the people, access to nature, urban features and the weather patterns – is probably the most important factor to get right in creating a happy life. The cost of living there is only one of the factors, and definitely not the most important one. 

But if you choose carefully, you can probably slide yourself in the right direction along that “Nice for the Price” scale in order to get more from your life. Even if it just means making a move within your own city to live along a walking path, a little closer to work or to the people or places you care about most. 

The key is just to remember that housing is like almost everything in life: It’s a choice that you get to make, and there are great rewards for putting some solid thought and effort into that choice.

Another Fun Example: Doing the Analysis on Tempe/Phoenix Arizona vs Denver

This is a fun exercise, because I’m currently living in the Phoenix area (more on that here)  that is way different than the Denver metro area where I normally live. We can start with the rough measure of housing cost per square foot across each region:

Phoenix: $272

Denver: $299

In other words, pretty close. Denver metro* is about 10% higher on average, but the variations from one neighborhood to another within any major city are much larger than that anyway.

So the other factors are more important. Both are surrounded by beautiful mountain recreation and get lots of sunshine, but the climates are famously quite different. Denver is more compact but Phoenix has nicer towns in the foothills around the outskirts.  In the end it’s just personal preference in weighting these various factors, and right now I kind of like the idea of both (Phoenix in winter but Colorado for the other three seasons)

More Adventurous: Let’s Try This in South America!

Going back to The Earth Awaits, if we repeat our earlier search but in South America, we get results like these:

Many of these spots have nice writeups if you click the “Details” button, and if anything sounds right for you, you can go on to learn much more.

It’s true that moving to a new country comes with all sorts of new learning experiences: citizenship and passports, laws and traditions and driver licenses, and of course having to cross an international border every time you want to return to your home country to visit family. 

But guess what? If this stuff sounds daunting to you, it’s probably a sign that you need to do it more. 

At its core, moving to a new place – even Internationally – is just a series of relatively easy Adulting Puzzles. You type stuff into your computer, read the resulting stuff that pops up on your screen, and make the occasional phone call and visit to an official office. I had to do all the same stuff when moving from Canada to the US, alone and just six years out of high school myself. 

Sure, it can feel like a “hassle” if you think of it the wrong way, but you know what’s a way, way bigger hassle? Living in a not-very-good place for life, or working an extra 15 years just to afford the higher cost of living in your current city, because you’re too scared to do a few weeks of work to make a big move to a better place.

If a rules-and-paperwork-hater like me can do it, almost anyone can.

Your Turn: 

While we covered a few examples of actual places in this article, the real purpose was to explain the thought process behind deciding when and where to move. And there are many of you out there besides me who can do the same thing, but better. And we’d love to hear from you!

If you have some favorite cities and countries for good living, or useful techniques for scoping them out, please share them in the comments. I strongly believe that the more we help each other find the right place and enjoy the planet more thoroughly and more efficiently, the better off we’ll all be. So let’s get moving.

—–

* Denver metro on the Fed site includes all the suburbs rather than just the core city which is much smaller and more expensive, but the same is true for the nicer parts of Phoenix so I figure it’s a fair comparison)

Previous Post:
  • Joe C February 5, 2024, 10:24 am

    We recently left the Denver Metro for small town Iowa. This move was precipitated by wanting to be closer to family and get out of a larger city where crime and craziness were increasing every year. The goal was that we would also make some good money on our home and have hardly any mortgage in IA. We focused on towns with good schools -> which increases costs – we also are working from home so needed more bedrooms. That lead us to having few options at increased prices. Factor in higher interest rates and higher taxes, it was cheaper to live in Denver compared to small town Iowa. We still moved for family reasons but i die a little inside when i think about the cost differential.

    I would also recommend considering amenities and local resources in any potential move

    Reply
  • MM February 5, 2024, 10:45 am

    Well, just lookie there at Santa Barbara, whee!! Sigh. Don’t come here. (We bought in 2004.) As far as house-hacking goes, it’s still possible, but you do need to be high income. A friend just bought a big house that needs work, for about $1.3 M. Dual high income, no kids, going to convert the garage to an ADU.

    Reply
    • Josh February 8, 2024, 4:34 pm

      I was looking for a comment where someone called out the SB easter egg. I am always surprised when i find Mustachians here because I feel like everyone else in the forums would give us face punches for having 7 figure homes =)

      Reply
  • Kevin February 5, 2024, 11:01 am

    I moved from the NYC area to the greater Baltimore area and was able to afford a nice home in a good neighborhood much sooner.

    Proximity to an airport & train is a good consideration to have as well!

    Reply
  • Meg February 5, 2024, 11:08 am

    Hopefully this doesn’t need to be said, but also try to buy a home that is WELL BELOW your projected affordability if you can find it. We were deciding between a home at the top of our budget that checked all our boxes, and a much smaller home that was on the super low end of our budget. We chose the smaller home and we’re thankful every day that we did. There are so many hidden expenses behind home ownership! Plus now we can afford to get solar right away, AND get the best quality appliances as ours have been slowly breaking. Couldn’t do that if we blew ALL our savings on the home itself.

    Reply
  • Liz C February 5, 2024, 12:13 pm

    I took a slightly different tactic that’s worked very well for me.

    I used to live in a “colonial suburb” of Boston. I loved the area and wanted to stay there, moving into the city once my kids were fully grown. However in 2012 I had a personal crisis that financially wiped me out so I had to start over. I had a good job (in tech), but there was no way I could save up enough for a Boston area down payment, let alone go pure FIRE. [I love my job, and don’t mind working.]

    So I started looking elsewhere. I found a city in the Upper Midwest that has a lot in common with Boston, only the housing prices are a lot lower. [I should say I love winter cold and snow.] I have friends here too, so once I rebuilt my savings, I started home hunting … and bought a duplex.

    I live in the upstairs unit, and rent the downstairs at slightly below market rate to a very solid tenant. The neighborhood has very high walkability, I’m a 2 mile walk from my downtown office, and from this part of town, transit is pretty good. I like living in the city, my preferences are different from MMM’s but suit me just fine.

    In addition to housing myself, I’m making it possible for someone to rent a nice place. I’m no absentee landlord, I live upstairs and care about the state of the building. I want her to stay, so I don’t gouge her on rent. Eventually the rent will rise, so by the time I’m forced to quit earning money, the rent will cover most or all my mortgage.

    Reply
  • Stephen February 5, 2024, 12:46 pm

    I second the shoutout for the southeastern US.

    Here in the Appalachians, a great house for a family can be had for $200k complete with great neighbors, millions of acres of public lands out your doorstep, hundreds of miles of beautiful gravel roads to bike, streams to paddle, free camping everywhere, a forward-looking community, and of course tasty local beer.

    Media portrays the area and its people in a certain way, but we all know that reality is complex. Our small town is home to folks from all over the world with a variety of world views, and the vibes are great.

    With low cost of living and inexpensive hobbies revolving around the outdoors, music, and home improvement, our family of 2 is usually able to hit a 50% savings rate with very average wages and part time hours.

    The mountains aren’t as big here as they are in the west, and you’re driving a few hours if you want to eat at a fancy restaurant, but it’s a fine place to live.

    Reply
  • Matt February 5, 2024, 3:01 pm

    My housing hack: look for houses which have something that’s a “deal-breaker” to normies but no big deal to you.

    We bought our house for $300k less than a very similar house two blocks away (not a typo). The only difference? That house has a driveway, while my house doesn’t (and no street parking in front). It’s probably the only house in my small city with no parking (excluding downtown). I have to park my car one block away, forcing me to get a teeny tiny bit of exercise every time I want to get in my car.

    Yes, normies are really that lazy. Everyone just immediately thought “no way I can live here, I need somewhere to park!”

    Reply
    • Tyler February 6, 2024, 10:48 am

      That’s a good strategy if you’re planning on being there a super long time but it’s also important to consider what the normies want when it comes time to sell.

      Reply
      • Justin February 8, 2024, 7:49 am

        I’d argue considering resale when you purchase is very high on this list of things that one should consider but probably don’t. Housing is a huge investment. If you know you will die there or rent it forever after you vacate that’s a different story. $300k less than average “market” is significant though and as long as you plan to sell with the same or similar differential feels like a net win to me.

        Reply
  • Dave February 5, 2024, 3:11 pm

    Another point to consider is that “moving” may not even involve that significant of a change. I mean, look at the cost difference between Boulder and Longmont. They’re, what, like 30 mins away from each other? There may be opportunities like this where you live as well.

    Reply
    • Mr. Money Mustache February 8, 2024, 11:21 am

      Yep, only about 12 miles apart and yet the difference between the average house price is at least $500,000.

      Which is why I ended up settling in Longmont, even though I would have greatly preferred Boulder. This was the probably one of the few compromises we ever made that was truly about money (i.e. it felt like a lose-win instead of a win-win).

      But now Longmont itself has come of age so nicely that the difference between them has shrunk. And the benefit of living in a not-insanely-rich city is that you get to hang out with normal people as well, rather than just insanely rich ones.

      Reply
  • Chris O. February 5, 2024, 8:25 pm

    Great article!

    There are two parts of this article that I want to re-emphasize:
    “The Earth Awaits.” It was incredibly eye-opening to see how much further your dollar goes when retiring from a location like Seattle-Tacoma. There are amazingly lovely homes in gorgeous neighborhoods all over the US that are affordable to rent or buy for the cost of a 1-bedroom or studio in the “scary” parts of other states. I spent so many hours adjusting sliders, and showing friends and family prior to my FIRE. I consider it as powerful a tool as FIRECalc.

    Secondly. For those who will have pensions, Military, Teachers, Police, Fire, etc…Latin American Countries like Costa Rica and Panama offer great permanent residencies. Panama’s Jubilado Permanent Residency just requires proof of a guaranteed income of $1000/month plus 250/month per dependent from a pension (investments typically won’t suffice.) I am currently in Panama with my wife, living 10 minutes walking from the beach in a 2-bedroom with a pool and fruiting coconut trees on ~$3600/month income (Pension + 4% SWR). The prices in these places are climbing, and you can absolutely find cheaper in the States and other countries, but a phrase I’ve been using is, “It’s cheaper that places this nice, and nicer than places this cheap.”

    Now that most folks have gotten some experience with video-chats, it is easier than ever to maintain relationships with family and friends over long-distance. Also, you have the added bonus of becoming a vacation destination for the folks stuck in the ice!

    Reply
  • Kevin February 5, 2024, 9:20 pm

    I submit that rent in California is actually a pretty good deal. Where I live, the Silicon Valley, it is notoriously expensive to buy a house. However, San Jose has the highest rent-to-buy ratio in the country. You could look at that and say, “gee buying a house is really expensive there how do young people get ahead,” but you could also say, “look at what a value you get by renting instead of buying when you consider the high incomes there.” I try my best to focus on the latter. Having said that, there’s a pressure in our country to buy a house, and I feel that very heavily as a 29 year old from here, even if it does not make financial sense to buy one. Like you said in an older post, “if you have to ask, just rent.”

    Reply
  • QQQBall February 6, 2024, 7:49 am

    We were FI long before it was chic and involved “community.” I read YMOYL by Vicky Robin and Joe Dominguez and Cashing in on the American Dream,How to Retire at 35 by Paul Terhorst and their philosophies hit cords in me. We cut our living expenses by 1/2, saved and invested the surplus, etc., and that was with two young chillrens too. I just wanted to be free and hated being told what to do and being dependent on others and situations beyond my control. Oddly, once we started producing a surplus and we were in control of expenses, life became much more simple and I raised the fees in my business, which increased the surplus. I have made more than my share of mistakes too! BTW, I liked my business and kept at it after FI, although I was able to pick and choose assignments and clients.

    I was FI at 45 yo and would have been much earlier except for divorce and I still put the two spawn through 14 years of college and four international summer internships. They are both really crushing it professionally, which is a direct result of FI. A parabola starts out slow and fairly flat and compounding magic happens later so stick with it. Or sit on your keister bemoaning why you can’t do it. I used to run compounding on my financial calculator for the little ones to show them the importance of starting early.

    Stuff happens in life and you can be a victim or adapt, but whining is self-defeating. BTW, we just moved from a $500/sf to $600/sf market to a $150/sf market, which was a huge change. We drove through Fayetteville and I thought it was pretty nice landing spot and nearby upscale Bentonville has a strong WMT anchor, but expensive and lots of traffic. No place is perfect.

    I still live frugally; it’s in my DNA having been raised by a single mother who was abandoned by an alcoholic husband/father. We lived in 3-D: Death, Doom, Destruction around every corner, so it wasn’t all Ozzie and Harriet and Skittles and Rainbows. My sister is also FI, although is more of a spender.

    Reply
  • Jim February 6, 2024, 9:15 am

    “An adventure is only an inconvenience rightly considered. An inconvenience is only an adventure wrongly considered.”
    ― G.K. Chesterton

    Reply
  • Tyler February 6, 2024, 10:38 am

    In my college days and early twenties I used to think I wanted to live in a big city, or at least save up enough to be able to live in one for the rest of my life without working because I felt like that’s where everything happened. All the best events, foods, opportunities, etc. While that may be true to an extent, I’m now in my early thirties and could not give any less of a crap about living anywhere “special”.

    There’s no way around it, buying a house is much harder to do right now in the USA than it was 10-15 years ago. Man, if you were looking around 2010-2012 and had any sort of job, you would be sitting on not just one but many houses now.

    I’ve been living in Colombia off and on for the last three years almost and there’s nowhere else I want to be. I’m currently in a small city outside of Bogota, one that no one has ever heard of, and I love it. If you’re willing to dive in, you can find a nice apartment for $300-500 a month.

    If you have any sort of passive income, can work remotely, and are willing to learn a new language and culture, it’s totally worthwhile.

    Reply
  • Trevor February 6, 2024, 7:17 pm

    Great write up. As always, I enjoy that you push yourself and others to do hard things. Back in late 2015 my wife and I moved from Vancouver Island, Canada to Melbourne, Australia. A big move. However, it was absolutely worth it. One benefit of a big move like this you didn’t mention is it really forces you to think about all the stuff you have. I have to say I loved distilling down all that we owned to the four suitcases we could carry (and the two golf bags we shipped). You really realise how little you truly need.

    One other thing I would suggest people consider when looking where to live — labour laws. While working toward FIRE, we felt that 10 days off per year in Canada was not acceptable for us. It left you with maybe a week to travel after you took a day here and there for family and personal commitments. Australia offered us double the number of days at 20 per year. While I’d love for something more like the 30 days that many countries in Europe have, the combination of more days off and climate was a sweet spot compromise for us.

    Reply
  • Chops February 7, 2024, 9:54 am

    This is a very good way to supercharge your FIRE journey when you are relocating to a low cost area. Moving from pricey Connecticut to low-cost Iowa was the first step for us, but an important second step was when we looked at homes well below what we could now afford. By getting a house that gave us everything we needed (walkable & bikeable location close to work/school/grocery/library) but without the pricey extras we suddenly could afford in Iowa, we were able to pay off the much smaller mortgage in a few years. All those extra savings went to our FIRE journey. And we are super happy in our home and don’t miss any of those pricey extras at all!

    Reply
  • Crow February 7, 2024, 12:49 pm

    Dear MMM,

    I discovered your blog a few months ago. And how amazing its been!! I’ve completely changed my values, my habits, and my outlook on life. I thought I was destined to be anxious and depressive forever. But now I feel better than I ever have, and I am on my way to reaching financial independence!

    As I’ve been reading, I’ve had two really big questions. First, I want to be a rancher, and connect my community to healthier food. However, I know that this means I will have really big expenses. From buying land, to building my houses and barns etc., to keeping animals. It is such a high cost lifestyle, but it is so rewarding, and it is absolutely what I want to do with my life. Is financial independence feasible when most of what you earn goes back into the ranch? Should I wait to have my ranch later in life and focus on saving till I reach FI first?

    My second question is: I’m currently in college and my current expenses are already very low (only $20 a month for misc stuff, $50 toward student loans, $10 for my phone bill, and $50 a month for gas. Unfortunately I have to commute, but it will save me $10,000 every year vs staying in a dorm). The rest, I save. However, I make less than $300 a month. I also have to pay for tuition by myself- my family and school wont help me. My tuition is about $20,000 each year. Is there anything else I can do to graduate debt free besides applying for scholarships? (I have a goal to apply to 100 scholarships in the next two years).

    Thank you! May Mustachianism reign!

    Reply
  • Bob February 7, 2024, 4:10 pm

    Add this article to the MMM Wall of Shame. Unbelievable that in order to solve the housing crisis MMM is suggesting to move to Iowa, Oklahoma, or Ecuador. Either completely undesirable or dangerous locations. It’s as if MMM has zero understanding of the negative implications of living in these locations. If there’s a bike trail and 10K people then it’s good enough for MMM and apparently almost nobody else, since only 10K people live there.

    This guy was awesome a decade ago, offered fantastic advice. Most of this is either regurgitated, careless, useless, or garbage these days. The advice is getting weirder and weirder. What happened to the easy math to retirement? Where is the new analysis to help put people over the edge? Or is there none and this is all BS? Once you reasonably cut costs and increase income, there are no more shortcuts aside from increasing income.

    Wall of Shame updated to include:
    1) Don’t wear a bike helmet
    2) Use a super sketchy health insurance or none at all
    3) Margin loan your house
    4) Covid wasn’t a big deal, just eat salad
    5) Mid-life crisis Tesla splurge
    6) Let your teenager decide not to go to high school or college
    7) Live in Iowa or Ecuador to save rent money

    Reply
    • Mr. Money Mustache February 8, 2024, 11:08 am

      Haha, sorry you don’t like the ideas Bob, but I’m sure you can find opinions you agree with elsewhere on the Internet!

      Looking through your handy wall of shame, I still fully stand by all of those positions – and I’m impressed that you got them mostly right. But I think the common thread in all of those might be fear – like, you feel worry when you consider the ideas I’m suggesting, because they feel too risky according to your own perception of risk.

      You feel that riding bike is dangerous, so you’re afraid when I choose to not wear a crash helmet during my own riding around town.

      You feel that medical bankruptcy is more likely than I do, so you want to purchase more insurance.

      You feel that stock prices are more volatile than I do, so you’re against the idea of a margin loan (note that I was suggesting a 25% or less margin loan backed by a large batch of index funds, not on a house which would be m more of a line of credit. But I’m in favor of those too!)

      You feel the health risks of Covid were more serious than I did, so you didn’t like my advice to focus most on personal health as a way to increase your chances of a good outcome when we get exposed to the virus.

      You didn’t like the fact that I replaced my old van with a new Model Y (?)

      You fear that young adults aren’t yet qualified to make their own decisions about how to complete their education, and they might make the wrong choices.

      And finally, you fear that cities other than your own will be dangerous or unpleasant places to live.

      All of those are fine positions to have if you’re happy with them, and happy with the life that you have as a result. But my philosophy on this blog has always been the opposite: try to reduce your level of fear, do your own math on any risks, and just try new things.

      Oh, and I do need to say something else about your point 6):

      It’s not up to me (or his mother) what our brilliant young adult son does with his life. So it’s not a matter of “letting” him decide one way or the other.
      Just like me, the man does *not* take orders. But you can present him with your best persuasive evidence on the pros and cons, and invite him to an open discussion on any issue. He’ll gladly engage, then make his own decision.

      I think this approach will continue to serve him well through his life – I’m so proud of him so far!

      Reply
    • Tony February 8, 2024, 11:46 am

      I’ve got to agree. It feels like MMM has become a bit too wealthy, comfortable, and out of touch with average people and is mustering up any ideas that come to mind to keep generating income from this blog. Maybe it has just evolved to cater to the people he’s already helped become rich and no longer focuses on the original principles of Mustachianism.

      Reply
    • Chops February 9, 2024, 9:17 am

      BAHAHAAHA my family and I literally moved from pricey CT to inexpensive Iowa in no small part to MMM’s blog. The move has enabled us to pay off our student debt (!) and mortgage (!) and reach FI decades faster than we would have back on the East Coast. And bonus, Iowa isn’t that bad hahaha! We actually prefer it now and it would be hard to move back even if cost of living was the same. There’s no traffic here and everything we need (schools, work, grocery, library) is walkable/bikeable which is a nice change from living in greater NYC. It really is freeing to get out of your comfort zone and try living in a new location.

      Reply
  • Simon February 8, 2024, 12:43 am

    Hi Mr. Money I love your site I haven’t been very frugal in my younger years and paying for it now. Anyways I worked in Tech made good money spent most of it unwisely. I changed careers and still made great money as a fitness trainer and I love what I do. So Covid hit and things changed very quickly opportunities were gone at the time I started working for myself also which was hard, things got better but I live in Vancouver, BC where everything seems to be going up rent groceries almost everything imaginable. I have had some offers for work in Australia where the pay seems to be insane compared to where I am. So my question is I’m renting paying a lot and have opportunity to go elsewhere, but I also have a family rental home which I have helped renovate large home with four bedrooms upstairs and two rental suites downstairs one being rented atm for 1600/month. So considering I could stay fix up the place rent it out and make probably pretty good income working my own hours and still time to spee nd in my expensive city close to family and friends. I am in a spot where I need to decide what’s best I do love it here in Vancouver and would love to stay here. Do you have any thoughts about my options?
    Thank you
    Simon

    Reply
    • Mr. Money Mustache February 8, 2024, 11:02 am

      If I understand you correctly and you own part of a house in Vancouver, you may already be set for life! I’d focus on maximizing the rental income from that place with super optimized high-end renovations and optimal use of space because that sucker is worth over $1000 per square foot. And yes, possibly carving out your own apartment in there if it’s located somewhere you want to live.

      In the long run, if you and your family decide to sell, that will potentially yield a windfall that is large enough to live off for life as well, although maybe not in Vancouver.

      Great attitude and start to your FIRE life either way though – congrats!

      Reply
  • Tony February 8, 2024, 11:35 am

    I’ve been a big fan of yours for years because of your ability to keep things relatable and realistic despite your wealth and status, but this article felt remarkably out of touch. I understand the intention was to make it seem like things aren’t quite like what the commenter stated, but I felt like you just unintentionally confirmed it with this.

    This felt like a take from someone from the exact position they mentioned. Stating that prices have only increased 10% and then saying that your own neighborhood has tripled is exactly the problem. The solution is rarely to move somewhere else, because the opportunities and the support network is rarely better unless you’re moving specifically for a job.

    Still a big fan for your take on things like reducing waste, making and saving more, spending less, etc. However, this one just felt very privileged to someone in the same position as the commenter, and akin to hearing “eat less avocado toast” by financial experts on TV.

    Reply
    • Mr. Money Mustache February 8, 2024, 1:32 pm

      Thanks Tony – criticism from long time readers is always welcome! And I do try not to just assume everybody is in the same stage of life as I am, even though it’s a natural bias I have to fight.

      I will however push back on the allegation this article being that way. First of all, it’s mostly an updated rewrite of one of my oldest posts: Get Rich With: Moving to a Better Place.

      But more importantly, this post is advising people to consider doing what I did when I was at the very beginning of my adult life: just a 24 year old with a backpack and a fresh diploma and barely any work experience. That’s when I did a search like this to pick the US city in which I wanted to live, and then made the move across the border to get here.

      Even with the big penalty of having to live further away from all my family and old friends, this move was still the single best thing I’ve ever done in my life. And I think more people should get over their fears of change and consider moving to find greater opportunity too.

      Reply
  • arma1 February 8, 2024, 1:47 pm

    When I got divorced unexpectedly, I was living in a house with a mortgage that on my own, I could not afford. Although I could sell, the small equity meant that my profit would not be enough to own a home again, even a repo, which us what the current home was when purchased. My solution was to rent out the extra space in AirBnB, with my son actually splitting my master bedroom with me so we could offer his room, & in my area my tenant rooms stay full. We made a rental rate that is almost half the going rate, in order to have long-term tenants and more stable income, and also to be a blessing to the people who need housing, and the result is that we have great, fun, responsible people living with us, and I can afford to stay in my home. I receive the cost of my mortgage and part of the utilities in rent, so that freed up income from work to finally invest in Roth IRA, high interest CDs and high interest savings that I found on Nerd Wallet. I didn’t have any savings or retirement prior, but I have put $40,000 in now, this year, even though my pretax job pays only $64k. I think if a person looked into repo homes like I did, they could perhaps find a great fixer upper but if they were willing to buy any home and quickly rent out part of it ( house hacking) , it might make what seemed impossible, possible .By looking online, a person can gauge the market for room rentals in their area. Here, it is viable, but maybe it isn’t in all areas. Anyway, it has been great for us. We didn’t have to move, put anything in storage, or try to qualify again for a mortgage. I thought it might be horrible to have strangers live in the house, but it’s been great for us and great for them, and so far my tenants have been here a about 7 months.

    Reply
  • Sergej February 9, 2024, 2:40 am

    Great article, I really like your analytical thinking.
    I am from Düsseldorf Germany, which is an expensive city.
    So I have moved out closer to work into a much cheaper city, but I am withing a 30min. drive in Düsseldorf and 1h drive in Cologne.
    Distances here are much shorter and the place I live in now is about 50% cheaper.
    It also a larger city, named Wuppertal (the one with the hanging monorail) ca 300k population so it has everything a major city has. So just moving acouple of kilometers enables me to save 50% of my living cocts.
    Plus I live near a forrest and recreational area it´s just a 5min walk.
    I will not be bying a home though, since it wouldn´t make sense here. Renting is much much cheaper and the political regulations are crazy, you basically don´t own the place really, you have to pay the bank and taxes but still can´t decide most things around your house yourself everything is overregulated so why buy a house ?

    Reply
  • Jeff February 9, 2024, 8:49 am

    Totally missing from your post is job availability and salaries relative to the housing costs you’re comparing. This makes sense for someone who’s already FIRE, but not for someone in the accumulation phase. If you’re a remote tech worker who can earn a big salary anywhere, sure, but that’s not the situation of the original complainer.

    Reply
  • Valley of Plenty February 9, 2024, 8:58 pm

    That Earth Awaits website gave me a good chuckle. According to their results, there is nowhere in North America where I can get housing at the price I’m currently paying for it. I suppose that happens when you only consider gigantic cities in your search results. I grew up in a town of 300, and now live in a much bigger town of about 10,000. You can rent a three bedroom apartment in either today for less than $1,000 a month.

    I bought my triplex in December of 2020, right at the height of the pandemic panic, for $45k. I had to put about $30k in sweat equity into it before I could get it fully rented out. It now cash flows about $1,000 a month, after reducing my own housing expenses to $0.

    Small towns are the bee’s knees. Low cost of living, low crime rates, lots of nature, and lots of peace and quiet. The appeal of city life is entirely lost on me.

    Reply
    • Mr. Money Mustache February 10, 2024, 8:22 am

      I love this, thanks for sharing VP!

      I totally agree with you on the small towns / small cities situation. It’s really a matter of personal preference (is your brain is wired to like calm or stimulation?), as well as stage of life.

      Oldies like myself are known for shifting from a 24/7 buzz seeking to suddenly finding birds and binoculars more interesting, and I’m not ashamed to admit to texting everyone I know when I get good shot of the local Eagle Antics these days :-)

      The great news is, we can have it both ways as our life progresses. As long as we’re willing to be open to moving and experimenting.

      Reply
  • Lee February 10, 2024, 8:03 am

    Great article and analysis MMM! I hope to move somewhere new this year. Thanks for sharing <3

    Reply
  • rh February 10, 2024, 12:31 pm

    The one thing I will say is that if you move to a completely new area after age 40 that is not within easy driving distance of past friends and family, it came be a real struggle to meet people and have strong friendship bonds. You end up meeting a lot of acquaintances, but not solid friends. Curious to know if MMM is experiencing this in Arizona?

    Reply
  • Midwesterner February 10, 2024, 1:18 pm

    I know housing costs are objectively up, but so is fancypantsness. I’m frustrated by people who complain about the cost of housing while they insist they “need” twice as much room as their parents did, twice as many bathrooms, a renovated kitchen, etc. If you want to sacrifice other aspects of your life for those things, fine. But recognize it’s a choice you’re making.

    Reply
  • JRM February 10, 2024, 3:11 pm

    Lots of these cheaper midwest and southern cities in the US have great benefits being offered to people relocating there – like tax rebates, free bicycles, etc. I see these on https://www.instagram.com/makemymoveofficial/ quite a bit.

    I’d like to know a bit more about what the commenter you quoted up top is trying to accomplish for themselves – a bit more context about their struggles/dreams might be helpful so we can crowdsource some wisdom.

    As a Millennial I refuse to tell younger generations or even people in my own generation struggling to just suck it up – we really need to stick by each other collectively. I think MMM offers some helpful ideas here relocation wise – and we can do better still!

    Reply
  • John February 10, 2024, 8:35 pm

    I live in Bangkok, Thailand. I travel 6 months a year – Thailand, Singapore, Australia, NZ, China, Japan, and occassionally Europe. While in Thailand my accommodation costs are about 30% of the rent I collect from property I own in Singapore. And with a ~$5m net worth, I can tell you, I live like a King. I hope to never have to return to a “Western country”. Oh, and lastly, being out of a western country reduces tax substantially. My average tax rate on the income generated from my portfolio was 2.37% in 2023. Think out-side-the-box people! (Oh, but I must admit I have one advantage – not being American, and being subjected to my home-country taxes when I am not even living there. But, there are ways there too – look at the few ultra-high net worth Americans who moved to Singapore and reqlinquished American citizenship for example. Again, think out-side-the-box, and embrace change and challenge. The rewards can be remarkable).

    Reply
  • Chris February 12, 2024, 10:34 am

    I’ve done a lot of geographic arbitrage in my life. In my 20’s, I lived in Taiwan (Hsinchu) and China (Zhangjiajie) for 6 years, mostly for the experience, but Taiwan was also a good place to earn and save a little money. I then moved to Florida (for a job) and stayed there a bit longer than I intended as I got married and started a family. Once our daughter was nearing school age, we realized that we didn’t want her to go to school or grow up where we were living, so we picked a place (Annapolis Valley, Nova Scotia, Canada) that seemed like a good place. We’ve been here for 3.5 years and recently applied for Canadian citizenship. We love it here! At the same time, I can absolutely imagine that we might move again in the future, as circumstances change.

    Reply
  • Sam February 13, 2024, 1:05 pm

    I know the OP mentioned that house hacking was not relevant for them, but a couple small ideas that have really had a big impact on our housing are: #1 Use the FHA program to purchase your first house. You can find a nice starter house with lots of deferred maintenance, get an FHA loan and put 3.5% down. Spend the next 6 – 12 months fixing the house up, then refinance it to drop your PMI and hopefully pickup a better interest rate. And then #2, Multiple generations all living in the same building. Our family searched around until we found a 6 unit building that needed loads of work. Dad and I renovated it and now this building is home to my parents, my wife’s aunt, + my wife and our two kids. We rent the other 3 units out which pays the mortgage for everyone. It’s definitely not traditional by US standards, but living near or with your family has loads of benefits beyond just the financial.

    Reply
    • Mr. Money Mustache February 13, 2024, 4:08 pm

      WOW! That’s pretty much the pinnacle of resourcefulness, sharing a six unit fixer upper compound with loved ones and some rentals to help pay the bills too. I sometimes talk about this same idea with my own family and friends – because it would be really fun, and lots of hard work, and potentially let us get into a more expensive market like San Diego at “commercial/landlord” pricing, which is often lower than individual homes. Big bonus if the complex has the usual amount of unnecessary car parking lanes and spaces around it, because those could be dug up and turned into gardens and patios!

      Reply
  • Meatro February 15, 2024, 10:39 am

    I’m an American living in Germany. My family is from the Southeast US. I think about this a lot.

    I highly recommend considering living abroad if you can and have the itch. Germany has my personal yessir, the rest of the world as you like. An underrated bit of advice from this article based on the comments. The Earth Awaits is a great resource to start!

    Here’s my sum-up on Germany, which may stand in for a lot of the EU in many regards:

    Words of caution: for US citizens living in the EU, filing taxes to the US is difficult and buying ETFs can be very difficult. You should want to learn to speak German. Please consider your ecological footprint when you visit the US and not just if you can afford it; a direct economy flight across the Atlantic emits around 3 tons of carbon. You will have to learn how to adjust, fit in and make new relationships. There are more regulations. It was also easier for me to move here since I left the country directly after college and never worked in the US… but it’s never exactly easy.

    Words of flauntin’: If you’re cool with all that, Germany is great. Work-life balance incl. paid parental leave and mandatory vacation and more opportunities for part-time work. Renters have rights and it is economically close to ownership. Unlimited slow public transportation for 50€ / month. Good bike paths, bikers are respected, walkable everything. Inexpensive groceries. Small but fine parks. Health care is easy and effective. Generally safe. Affordable, tasty beers. Happening cultural hubs within striking distance. Multi-cultural, multi-lingual, middle of the EU. You mostly feel good about where your taxes are going, locally and nationally. Relatively easy to get a long-term work permit. The worst-case FIRE scenario is insured by the state; if dead broke (don’t plan on this, please), you get gov’t money which is above my (mustachian) spending. The reason for those funds? The first law of the German constitution: “Human dignity shall be inviolable. To respect and protect it shall be the duty of all state authority”… c’mon somebody!

    I’m sure it’s not for everyone, but it works well for me and is doable. I have sculpted a top tier quality of life in line with common Mustachian values that is afforded on rock bottom expenses, a combo that sometimes just makes me wonder out loud if this is for real. You might work longer until FIRE, but between now and then, you’ll live well, too.

    Reply
  • Sarah February 15, 2024, 2:56 pm

    Love this article! And we did exactly this – we did all the research and chose to move last June from Encinitas, CA to Middlebury, VT with our family. We are incredibly happy with our decision for many personal reasons AND we also got to reap the rewards of moving from a very high housing market to a much lower priced housing market. FIRE here we come!

    Reply
  • Brendan February 16, 2024, 7:17 am

    Pittsburgh is a great option. Most people do not live in the city limits but in the suburbs 2-10 miles outside of downtown. You can regularly find 1500 sq ft, 3 bed, 1-2 bath houses in very nice neighborhoods for sub 200K, sometimes even sub 150K if you’re willing to do a little bit of work.
    Of course, if you are unwilling to touch a screwdriver or look at a paint brush you may be relegated to prices closer to 250K. Lots of flippers jumping into the market to sell to folks who refuse to do any work themselves.

    Reply
  • Lucas February 16, 2024, 9:32 am

    Love the article! I much prefer looking at something that takes into account interest rates and median salary info, which the atlanta fed does a great job of here! https://www.atlantafed.org/center-for-housing-and-policy/data-and-tools/home-ownership-affordability-monitor

    Of course buying a home can still be done today, and your article is an awesome start. Just like one can work to increase income, house hack, or buy a smaller house than is their end game goal. And I’m also so sick of seeing meme after negative meme on my facebook about how millenials can’t afford a house. But no denying it’s not a good time to buy a house. I feel good advice for now is just rent, buy somewhere really small, or move to a cheap location, and then I can’t imagine historically low median affordability will last longer than another handful of years.

    Reply
  • Alistair February 17, 2024, 4:37 am

    The cost per square foot metric is good but should come with a big caveat. some towns will look artificially expensive because they have older, better designed and more compact houses. 2000sq ft is a BIG house where i am in London. you can happily home a family of 4 in something half that size if it’s designed for it.

    Reply
  • HD February 20, 2024, 6:19 pm

    Re: the earlier comment that said this post should be on the Wall of Shame for suggesting one move to “undesirable and dangerous places”….that is precisely the uncreative, inflexible attitude that keeps people stuck in places they think they ‘should’ be (and paying for those places). I think an essential part of the FIRE movement and trying to live off less is the constant examination of your preconcieved notions, your assumptions, and what you think (or have been told) you need.

    I live nomadically and am currently camping throughout Mexico, a very dangerous place, according to many Americans. Instead, those who come south often find it safer than a country where random shootings can occur any day (and a great COL to boot). Thankfully, bad attitudes will keep the inflexible people away from these beautiful places!

    Reply
  • Green Chiles February 21, 2024, 1:18 pm

    I’ll just go ahead and be a downer here and question the MMM’s advice. Moving can be exciting and rewarding–but let’s face it, it can be a total disaster too. Your gut is right on this. It is time consuming, stressful and expensive–and all you can do is trade between those three. It can ruin your marriage and is sure to upset your school-age kids. If you have neither of those, and no other family or close friends, and enough cash in in your stache, heck, go ahead and move to Bali or wherever. Nobody cares. Because you have no family or friends–and you won’t find them in Bali either. Wherever you go….there you are. And if you happen to be in Phoenix, well, yikes!

    Reply
  • Joe February 22, 2024, 5:57 am

    While I haven’t been to most places on this list, I’ve been to a few, and those are not places I’d like to return to. When I saw Logansport, IN on your list, I had to laugh. While I feel for the folks who live there and grew up there, any magic it may have had is gone, as Logansport was a trading town that lost its way over the decades. Factory work came and went, and most of the manufacturing jobs dried up years ago, headed overseas. Logansport is a filthy town, destroyed by drugs, the lack of jobs, and the low pay of the ones that do exist. The 24/7 stench of light crude oil and pig processing plants is enough to make anyone ill, and it does. Those animal processing plants hire many illegal immigrants and are raided irregularly. Drugs and related crimes are rampant. The water is terrible and the soil is contaminated. I couldn’t live there for any amount of money.

    Reply
  • Gary Grewal February 22, 2024, 11:26 am

    Wish I read this article when I first moved to CO in 2015, I thought it was expensive then! My family buying big house on the cheap in 2010 skewed my understanding of real estate cycles. For those in a position to move, do it. There are pros and cons to every city and you have to look at it with an open mind. Great places exist everywhere.

    Reply
  • Dude February 23, 2024, 7:44 am

    Why a house? Why not an apartment? I think FIRE is a stupid idea in times when you could build a highly automatized remote lifestyle business, that gives you a chance to make a nice living working part-time from everywhere in the world.

    Reply

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