Yeah, but that will only save you a set dollar value, for a limited time. lets keep it simple. say you start out at $70k/yr, and assume $800/month rent (9600/yr). And your friend Joe takes $100k/yr, with $1400/month rent (16.8k/yr). Assuming 5% raises/year (conservative, assume no big promotions) for the both of you, and both taxed a flat 28% (for simplicity). At the end of year 1, Joe has 55.2l, you have 40.8 left over.
In 5 years from now, your buddy Joe is making ~127.6k, you are making ~89.3k. Joe has gained 8.3k more than you GAINED, (which is greater than the difference you pay in rent) So now Joe clears ~75k/year (after tax and rent), and you are clearing ~54.7k. The gap is only going to get bigger from there as time goes on, that's only after 5 years. You've GOT to think of money in terms of percentages, not just hard dollar values, or it's going to bite you.
You're replacing a simple mental tool with a whole complex system. The problem with big complex systems like that is they're built on numerous assumptions. If you're decrying that someone might look at cost of living and base their whole life around it, sure, you have a point. If you're instead arguing that you will always come out ahead being where salary is higher despite higher cost of living, take note of your assumptions: real estate value changes rapidly, no two jobs are completely interchangeable, yearly raises are rare and getting rarer, people in our industry change jobs very frequently, and so on. You aren't necessarily going to "win" (whatever that means) simply by taking the highest paying job.
All very true, and make no mistake, there are a seemingly infinite number of variables one would need to take into account to make a decision on a job/industry/location to live. I was just trying to make the point that most people don't actually stop and do some simple math, even when faced with large, possibly life altering decisions. Yeah, you never know everything, but you have to at least use the information available to you to make the best decision from the information you have. Otherwise you never make up your mind and end up nowhere.
I guess I am really just trying to stress the fact that people all too often see money from a liner point of view, when in fact it can be advantageous to explore the exponential growth side of money as well. That's all I really want to get out there. It's a balance between basing decisions on the known present or the unknown future.
> Yeah, but that will only save you a set dollar value, for a limited time.
Rent typically goes up every year, so the amount you're saving versus renting increases annually, and at the end of the "limited time" you're not paying a mortgage at all.
Say I want to work for Google, want no more than 15 minutes commute, and want to live in a house of ~2400 sq.f (which I live in right now).
How much would it cost me per month (both net and gross, considering that I have to pay taxes prior to paying my rent)?
Up to 15 minutes covers an area of 400 square miles if you're driving from a commuter suburb to an office building and take the freeway most of the way. If either the source or the destination involves a 'proper' city with any kind of population density, that range shrinks considerably.
