Start Me Up
Posted on August 27, 2007 7 Comments
Kiplinger has an interesting article about the concept of a “starter city” for young professionals. You can read it here. The basic concept is downsizing yourself to a smaller, more affordable city where the rent is cheap and the cost of living is low, so your bright, professional young self can surge ahead of the pack.
I’ve thought a lot about this concept, though admittedly without the catchy name. Mostly because I’m often left scratching my head as to how anyone under the age of 40 can afford to buy real estate in the Chicagoland area. I also have a lot of friends who live in mid-sized markets, including Peoria and St. Louis, who are doing quite well for their ages.
All these points weighed heavily on my mind a few years back, when I was considering making a move to Madison, WI. I ultimately decided to take my chances in the big city. Here’s why:
- Lower ceiling. I was worried that if the job there didn’t work out, I would be limited in my professional options moving forward. If I planned to stay in Madison, I needed to know the professional community held options for me to move vertically, not just horizontally. Ultimately, I was unconvinced at the time that the options existed.
- Connection failure. Chicago is a great place to be because if my current job doesn’t work out, so many people have passed through my office that I now know someone at most of the big PR offices in Chicago. If I was laid off, I could instantly send my resume around the city in hopes of landing an interview. Given that the whole concept of a “starter city” is to eventually break into a whole new city, I would be missing out on all those great connections by living in a smaller city.
- False real-estate hopes. Truthfully, there wasn’t THAT much difference in what I could afford in the two real estate markets. I still thought condos were sort of pricey for what they were, and houses looked too expensive for what I had. Bottom line: I would have been renting there for about the same price I am here, just closer to the center of the action.
- Big-city blues. We drove around the entire city in less than an hour. And that, frankly worried me. When you’re from the big city, you know there’s always something there for you… even if you mostly just hang out in your apartment. I know that at 1 a.m. on a Wednesday, if I wanted tasty burritos, live music, a drag show, public transportation, a light bulb, a cup of coffee or whatever else, I can find it.
- Boomerang. OK, so if all of the above were true, than after I was in Madison a few years, if things didn’t work out, wouldn’t I just move back to Chicago? And if so, what’s the point? If I leave Chicago during my 20′s and miss out on all the crazy good times, great friends and career connections, won’t I just be behind on all fronts when I inevitably come back?
Maybe my love affair with Chicago borders a little on the obsessive side, I don’t know. But for all the reasons above (and more), moving to a mid-size market wasn’t for me in the “starter” sense. Maybe when I’m ready to settle down a bit more I’ll consider it. But for me, building a life in the big city is filled with endless possibilities – and I wasn’t ready to let that go yet.
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7 Responses to “Start Me Up”
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August 27th, 2007 @ 8:08 pm
I was surprised by the few inconsistancies in the article. I’m from the San Francisco Bay Area and at 31, I’m doing more than fine. We moved from Boston, another expensive place, and our rent is just slightly larger. The salaries for my particular profession, software engineer, are huge. We might be part of the minority, but both me and my wife receive significant housing subsidies to live here. It is true that the cost BUYING housing makes the gain in salary moot, but if you intend to rent, it’s extremely easy. Since salaries are more, use the difference to invest and you can do well. We continue to keep investment properties in Boston, so if the real estate market does continue to rise, or if we feel that we want to live in a place we own, we can go back.
The other thing that struck me is that she said that groceries were eating her alive in Palo Alto. There’s a WalMart in Mountain View (about a 10 minute drive) and numerous small discount groceries. Last year after driving across the nation, I found that a 2-liter of Diet Sam’s Choice was 58 cents whether it was in the Boston suburbs, Wyoming, or San Francisco. You have to do more planning in the bay area, but if you do, I think you can come out way ahead.
I think everyone has to evaluate it themselves and I think you did a great job of that here.
August 27th, 2007 @ 11:09 pm
Great post! I live in a large city in TX was able to afford a condo right uptown just out of college. My friends who moved to Chicago and NY are paying rent that exceeds my whole cost of ownership–and they probably aren’t maxing out any Roth IRAs either. Then again if I still lived where I grew up in AL, I could afford a 5 bedroom house on a whole acre for what I pay for this tiny condo.
But lifestyle is important too. There are always trade-offs that have to be made.
But remember, cities like Atlanta, Birmingham, Dallas, Charlotte, Richmond, have thriving financial districts, cultural centers, and all the resources and jobs of any metro–but the cost of living is MUCH lower than a San Francisco or Seattle.
Bottom line, if you are struggling, on welfare and/or just can’t make ends meet, then don’t complain if you live in an expensive city like NY or LA. There’s a whole America out there where you can afford to own a home and fund your own retirement–even on minimum wage.
August 27th, 2007 @ 11:12 pm
PS-I love your blog! This was my first visit, and I’m going to subscribe put a link to your site on my blog. Keep up the good work!!
August 28th, 2007 @ 7:54 am
I moved cross country four years ago and am still feeling the effects of not having the contacts that I had. That is definitely worth starting where you want to end up!!
August 29th, 2007 @ 7:14 pm
You’re lucky you live in the Chicago area and not in a truly expensive area like L.A., New York, or even D.C. People in the south and midwest really have it good…a nice 1 bedroom condo for less than $350,000…wish there was one in my area!
-Raymond (MONEY BLUE BOOK)
August 30th, 2007 @ 11:10 pm
plus, i would be really, really sad if you moved away! Love ya!
November 18th, 2007 @ 2:06 pm
I agree with you completely. I’m 30 years old and live in Manhattan. I make at least 10 times the average salary people in places like St. Louis make but my expenses are not nearly 10 times as high. Sure real estate is expensive but I don’t pay 10 times more for a gallon of milk or 10 times more for my monthly cable and cellphone bills. Most of my expenses wouldn’t be much different if I lived in St. Louis but my salary would be 1/10th of what it is here. Housing is expensive here, but it’s not as bad as people make it out to be. First of all if you do buy, sure you’ll be spending more, but it goes into building equity in the most stable real estate market in the country. Even in the current downturn, Manhattan is one of the few places where prices are still going up.
More importantly than the financial benefits though of living in a big city are things like career and entertainment. Careerwise the possibilities in a place like Manhattan are limitless and you’re exposed to the most successful people in various industries on a daily basis. The city is chock full of over-achievers, that rubs off on you. Then on the entertainment and cultural side you are in the center of the greatest options in the country. 24/7 there are tons of things going on. What can you do in St. Louis? Go to a movie? Can you go to any one of hundreds of Broadway and off-Broadway shows? Can you go see great concerts any night? Can you go to one of any of the thousands of bars/lounges with live jazz, rock, big band, or any other type of music? I’ve lived in Manhattan for the past 8 years since I graduated from college and I still have probably only experienced 1% of it even though I go out all the time. I’ve lived in cities similar to St. Louis and in a nutshell – THEY ARE BORING.