The pink string of clouds tumbled across the horizon like bales of cotton candy. Dusk was setting in and the lake was transforming into those postcard hues of mysterious turquoise depths.
I love it on Bartoo Island, isolated and alone. Nature at its best, pristine, virgin and unblemished. The trees were legion, the sky a sheltering blue dome, the open space stretching wild and fathomless as far as the eye could see.
There was just something different about the air I breathed in up here in the Northern Idaho Wilderness. More pure, untainted and raw.
“So what are your next plans?” My cousin asked.
I turned to face him from the log I was sitting on. The small waves of the lake lapping at the sandy shore like liquid tongues. A peaceful pulsing serenading us unaware.
Then I looked back over the stillness of the water. The light was dancing off the mirror-like surface, reflecting spiraling shimmers that I couldn’t peel my eyes from in that spacious unknown. “We’ll probably be looking to buy a house soon,” I replied. “But we’re in a good situation. My landlord is great, and our rent is dirt cheap for LA. So, we’re in no rush.”
“That’s good,” he answered. “Finally able to pull the trigger.”
His wife was sitting next to us on a beach chair recliner, enjoying the last dwindling rays of light that the shoreline had to offer. She had been listening to our conversation as I updated my cousin on my plans for my wife and I over the next several years. I had almost forgotten she was there, reclining silent and idyllic, until she suddenly piped up.
“Q-FI, do you mind telling us how much your rent is? What amount you consider dirt-cheap in LA?”
I didn’t even think twice before replying. The ambiance of the setting sun, a golden smear merging with the glass-like lake, and towering pines swaying in the warm summer breeze had lulled me into a cocoon of complacency with the magic of the outdoors. I was lost in that haze of reflection and the bubble that the sprawling LA metropolis had molded around my thoughts and assumptions.
Her sudden gasp at my reply broke my mental reverie. “That’s like a large mortgage in Spokane! Do you know how much house you can buy for that amount by us? Acres…”
And then I was the one who paused and stared back at her. Stunned at her comment. Remembering that my struggles living in a HCOL area isn’t the norm for America. Once again, I was viewing the world from my own filtered lens, biased and prejudiced about how I thought the world was… should be.
—
And it’s easy to do this. To forget that people live so differently. All our decisions manifesting like isolated isles similar to the lake-island I had found myself visiting.
What is expensive to one person can be deemed cheap by another. All cost of living is relative based on your individual situation. Yet we like to group, categorize and classify because it is easier for us to generalize than acknowledge the hundreds of intricacies that affect each person’s unique personal financial decisions.
My cousin’s wife reaction had caught me off guard and reminded me how you can never make assumptions about someone’s financial situation. Sure, I was with family, and we always catch up on these things. But I hadn’t even blinked at something I thought was a steal, thinking in CA terms, and forgetting how a rural family in the Spokane, WA suburbs would interpret that. And it wasn’t anything negative, jut a good reminder of how different all our living situations are and to keep an open mind.
Plus, even when looking at my own market in LA, I recently had another example in which I made some assumptions that couldn’t have turned out to be farther from the truth.
I was talking with one of my fellow MBA classmates and we were both complaining about how expensive some of these LA neighborhoods were. I was assuming that when we were talking expensive, it was the $800K range for a 3 bed, 2 bath starter home. Then a month later, this person finally bought their property and I looked it up. My mouth dropped when I saw that they had paid $1.8M for the house. What I had thought was expensive wasn’t even in the ballpark for them. It just goes to show you that when you don’t discuss actual numbers, making assumptions about someone’s finances and affordability can be way off. And of course, I’m generalizing here, purchasing an expensive house versus being able to afford one are two separate things.
However, I also think the real shock came for me because we had grown up in the same area and I had thought our views were relatively similar. It was a good reminder that assuming your perspectives are alike simply because you share common interests in most areas of life, definitely has nothing to do with how people treat their finances.
I talk a lot about perspective on this blog, how important in can be as well as how powerful of tool it is for reframing happiness and gratitude. And I think it can be easy to fall into the HCOL bubble sometimes and not remember that there are a ton of other options out there. Diamonds in the rough exist (as is the case with my current housing), but it’s also easier to become jaded. Sure, HCOL areas tend to have higher salaries, but I’m not so convinced this advantage offsets the higher cost of living as well. I’d like to dig more into that in the future and do some research on particular metropolises – this is definitely a discussion for another day. If you know of any good data, drop me a line in the comments.
Now that I’m looking at making my first home purchase, my eyes are wide open again. Analyzing everything out there and keeping my thumb on the pulse of the market. It’s a bizarre time to be looking at real estate. Rates are insanely low, but the inventory has dried up (at least in the neighborhoods that I’m looking).
Anyway, I’m still a few months off from pulling the trigger but the feelers are out there. I’ll also be writing a post soon summing up my thoughts on preparing for a down payment when you’re home searching in a HCOL area. So get excited, I know that is edge-of-your-seat anticipation! Hahaha.
Alright my compadres, stay safe, try to get a little vaca in this summer and I hope August doesn’t turn out to be the typical dog days of summer.
I’ll see you all back here on Wednesday.
-Q-FI
—
P.S. Ever have one of those times when someone shifts your perspective all of sudden? Like me assuming CA prices when I was in Idaho.
I’ll still assert that buying a place in LA will always be a solid investment (notwithstanding ‘The Big One’ decimating everything) and certainly is a better financial move then getting gouged on rent (unless it’s a unique situation like yours).
My moment was when I came up here and my contractor showed me a 3 bedroom home he bought/revamped as a rental. It’s was beautiful and sat on a 1/4 acre ‘in town’. I asked him how much he could get for rent on it and he replied “About $700 a month”. That was my my moment. He got his when I told him it would be, minimally, $5K in So. Cal. Like you say, it’s all relative.
Hahahaha… I love that example. Both of you are like, “What the fuck?”
And for you coming from LA to Washington, I bet you had a lot of those at first. It’s a trip fo sho.
I sometimes think a lot of the strategies of the “FI” folks are common knowledge. I told a direct report to watch their “expense ratios” when she asked me about the 401(k) plan and I realized she had no idea what that is. Glad I didn’t bring up the 4% rule. : )
I am currently in a low COL area, which is nice. Most of my career has actually been spent in lower COL areas.
Max.
I agree that a lot of FI strategies are common sense, but it is amazing at how many people just know nothing about them. I’m writing another post for Wednesday that talks about this, how financial literacy is an actual skill set in America.
I’ve grown up in LA, so all I’ve ever known is a HCOL area. But my gut tells me, the flexibility of being in a LCOL area probably has more advantages. Plus, I think in the next 5-7 years relocating out of CA for an adventure and tax breaks will probably be in the picture. Who knows though. Right now, family is a big draw for staying in So Cal.
I’ve spent a lot of time thinking about this topic. Probably from a “country mouse” perspective living in the Midwest for most of my life. I’ve had opportunities to make bigger salaries by moving to a coast or a big city outside of the US, but the numbers didn’t seem to work. Not only is my salary more than enough for my needs here, but there are so many things that aren’t even possible in a major metropolitan area. I’m glad I realized what I actually had before I left for “more” which was actually less.
Yep, there’s a lot to think about and although it’s cliche, every situation is different. I’m glad you found what works for you.
This is so true and reflects my experiences as well with living in a HCOL area and having friends and family living in lower COL areas. What seems cheap to me is not so for them, so I find I have to be sympathetic to that. They’re quick to tell me to leave my area because it’s too expensive, but it’s honestly completely affordable with my current income. I think they believe my salary is on par with theirs, which is why my area seems so much more overpriced compared to theirs. It’s all perspective, though. Yes, I pay more to live here, but I love it here and I also make more money. Yes, I could move to a cheaper area and earn less, but then I’d also see a decreased match to my retirement accounts and have less overall income to save or spend as I choose. Good luck with the home buying!
Yes, it just goes to show you never know what someone else’s financial situation is behind the curtain.
Thanks for the well wishes in house hunting Katie. I’m excited, but at the same time it’s going to be a bizarre experience in this pandemic. Plus, my area is super competitive so I’m not looking forward to that part of it. But I’ve been a renter all my life, and the wife and I are looking forward to finally making a place our own and hopefully filling it with a foster child. Regardless, it’s another experience that I’ll probably be writing about when the time comes.
Thanks for sharing and I hope all is well with you.