Love my Job - BUT VHCOL making it Extremely Tough!!

[gaspusher]

Hello all!

About 2.5 years in practice now. I love my job. It has a great breath of cases, great colleagues, great staff, etc. I make decent money, total comp is about $600k (total comp including 401k, insurance, etc) a year and the buy in was almost insignificant. I just don't know that we will ever make it financially here.

My wife and I save about $12k a month after maxing out our 401ks, spending $7k on rent, and other expenses. Children are on the way and we want a house. We have saved up over $250k. Even these types of houses are far, far out of our price range right now.

https://www.realtor.com/realestatea...atos_CA_95032_M27987-40045?from=srp-list-card

We cannot compete with the tech money, venture capital, wealth management directors, tech consulting, corporate law, finance partners in the area.

I know that no one goes into medicine for the money (myself included) but I never thought it would be this hard to just survive in an area.

Should we move? Does anyone make it work in these VHCOL areas. All my partners are older and bought in years before the market got this bad.

Thank you!

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[triggermaster]

Hello all!

About 2.5 years in practice now. I love my job. It has a great breath of cases, great colleagues, great staff, etc. I make decent money, total comp is about $600k (total comp including 401k, insurance, etc) a year and the buy in was almost insignificant. I just don't know that we will ever make it financially here.

My wife and I save about $12k a month after maxing out our 401ks, spending $7k on rent, and other expenses. Children are on the way and we want a house. We have saved up over $250k. Even these types of houses are far, far out of our price range right now.

https://www.realtor.com/realestatea...atos_CA_95032_M27987-40045?from=srp-list-card

We cannot compete with the tech money, venture capital, wealth management directors, tech consulting, corporate law, finance partners in the area.

I know that no one goes into medicine for the money (myself included) but I never thought it would be this hard to just survive in an area.

Should we move? Does anyone make it work in these VHCOL areas. All my partners are older and bought in years before the market got this bad.

Thank you!

Keep renting or move 🤷‍♂️. If you are saving 12k a month you are killing it though. Home ownership ain’t all it’s cracked up to be.

 

[ambiturner]

Bay area real estate has made a lot of people rich. If you’re willing to take a big part of that 12k/mo and put it toward a mortgage you can make it work but you’ll have to mentally look at that as part of your retirement plan. Also note that your house value is likely to be correlated to the local tech/VC/finance performance as those are the people driving up the prices.

Based on the info you gave I’d probably just keep saving/renting and figure things out closer to when kids start school. If I didn’t have family in the area I’d probably move.

 

[aneftp]

Keep renting or move 🤷‍♂️. If you are saving 12k a month you are killing it though. Home ownership ain’t all it’s cracked up to be.

12k a month is good savings for now remember zero kids (for now). Daycare and lost time (income) for kids can easily add up to 4-6k extra.

My suggestion is to move.

600k (including benefits) while nothing to frown upon is really “average” compensation in many parts of the country. It’s really less than. 600k for the OP because they are including malpractice? Insurance which is included in almost every amc or hospital based contract

 

[anbuitachi]

Hello all!

About 2.5 years in practice now. I love my job. It has a great breath of cases, great colleagues, great staff, etc. I make decent money, total comp is about $600k (total comp including 401k, insurance, etc) a year and the buy in was almost insignificant. I just don't know that we will ever make it financially here.

My wife and I save about $12k a month after maxing out our 401ks, spending $7k on rent, and other expenses. Children are on the way and we want a house. We have saved up over $250k. Even these types of houses are far, far out of our price range right now.

932 Cherrystone Dr, Los Gatos, CA 95032 | realtor.com®

We cannot compete with the tech money, venture capital, wealth management directors, tech consulting, corporate law, finance partners in the area.

I know that no one goes into medicine for the money (myself included) but I never thought it would be this hard to just survive in an area.

Should we move? Does anyone make it work in these VHCOL areas. All my partners are older and bought in years before the market got this bad.

Thank you!

you need to provide more info, such as how much your wife makes, expenditures etc. its a big difference if your wife makes 1M and you guys saving 12k a month vs wife making zero.

if you arent willing to change any expectations, you should move. somethings got to give, you have to prioritize what you want. if you love the job and thats high up on the list, perhaps stay. if that house is more important, then move. like you said, you cant compete with tech/venture capital money

I live in a VHCOL area too. A home like that here with that much lot space would be similar price here. But i know from my attending salary, theres no way i can afford it, at current interest rates. so my wife and i decided to get a co-op apartment thats half the sq ft, for <1M..

 

[chessknt]

Have you ever lived outside of CA? Do you/wife have any connections to the area?

You are clearly going to be priced out of that area--you could probably commute an hour and do much better but then you're losing time on the road. If nothing is tying you there you could look in to moving but you need to make sure you aren't missing on something you do want (eg weather, culture, proximity to culture etc).

It does warrant a soul search but 12k/month is totally fine don't let naysayers make you think that is bad, it is awesome.

 

[aneftp]

Have you ever lived outside of CA? Do you/wife have any connections to the area?

You are clearly going to be priced out of that area--you could probably commute an hour and do much better but then you're losing time on the road. If nothing is tying you there you could look in to moving but you need to make sure you aren't missing on something you do want (eg weather, culture, proximity to culture etc).

It does warrant a soul search but 12k/month is totally fine don't let naysayers make you think that is bad, it is awesome.

12K before kids. Remember that.

Wait till they have kids. Changes the savings big time.

I was saving 12-15k a month before kids on 125-150k a year income the OP is kakifn 15 plus years ago Before kids

Kids cost a lot of money. And they get more expensive. 529 accounts cars etc. cheer tennis baseball. It all adds up quickly.
Vacations cost twice as much as well with more kids.

 

[dozitgetchahi]

Move. I did the HCOL thing for a couple years out of training, and one of the very best decisions I ever made was to leave that HCOL nonsense behind me for a semi rural locale where I make substantially more money with a *much* lower COL.

(Where I live now, you can literally move the decimal over on the selling price of that house you listed…you’d get that for $280k. The fact that anyone is willing to spend >$2M on the house shown in that listing is just mind boggling to me… oh and your rent? My wife and I are saving up and waiting to buy as well…but we pay $1k/month in rent, while you’re paying $7k. I don’t care what the location is. It’s time for you to move.)

PS: for the love of god, don’t be afraid to ask to make money in this profession. There is nothing wrong with getting paid properly to do what is really a very complicated, high liability, high stress job that requires an insane amount of training and sacrifice…too many of us have been brainwashed into thinking we shouldn’t be asking for what we are worth…

 

[jjm285]

I was saving 12-15k a month before kids on 125-150k a year

 

[abolt18]

I was saving 12-15k a month before kids on 125-150k a year income

Doesn't quite add up

 

[aneftp]

My bad. I mean 125-150k less than what the op was making. That I was able to save 12k easily. On 450-475k income.

 

[Coffee PRN]

Doesn't quite add up

Homie was living out of the call room and surviving off the doctors lounge

 

[DrOwnage]

Bro you're doing fine. Money isn't everything. You make in the 95th-99th percentile in the country. You will have millions to retire on given your savings. I find we complain about a lot of stuff, think about everyone else. Especially other medical specialties making half of your income or less.

 

[Hoya11]

Hello all!

About 2.5 years in practice now. I love my job. It has a great breath of cases, great colleagues, great staff, etc. I make decent money, total comp is about $600k (total comp including 401k, insurance, etc) a year and the buy in was almost insignificant. I just don't know that we will ever make it financially here.

My wife and I save about $12k a month after maxing out our 401ks, spending $7k on rent, and other expenses. Children are on the way and we want a house. We have saved up over $250k. Even these types of houses are far, far out of our price range right now.

932 Cherrystone Dr, Los Gatos, CA 95032 | realtor.com®

We cannot compete with the tech money, venture capital, wealth management directors, tech consulting, corporate law, finance partners in the area.

I know that no one goes into medicine for the money (myself included) but I never thought it would be this hard to just survive in an area.

Should we move? Does anyone make it work in these VHCOL areas. All my partners are older and bought in years before the market got this bad.

Thank you!

Im an east-coaster outside NYC. I consider where I live to be VHCOL. But where you are in the Bay area is nothing short of extreme. If you can move, I would. You are talking about starting your life and your career, I would not want to bring all of the problems of that area with me on that journey. The financial disadvantages of that area make savings harder, living harder, navigating kids harder since daycare costs so much, and for what benefit compared to another major city full of culture and activities?

Move away, to someplace still cool and still with culture and still RELATIVELY HCOL, but not the absolute extreme situation where you are now. You could move to NYC, Chicago, DC, Austin, Seattle - cool places with cool culture. It doesnt mean if you move you have to give up on culture and move to BFE to raise your family. And you would save sooo much money.

 

[BLADEMDA]

Hello all!

About 2.5 years in practice now. I love my job. It has a great breath of cases, great colleagues, great staff, etc. I make decent money, total comp is about $600k (total comp including 401k, insurance, etc) a year and the buy in was almost insignificant. I just don't know that we will ever make it financially here.

My wife and I save about $12k a month after maxing out our 401ks, spending $7k on rent, and other expenses. Children are on the way and we want a house. We have saved up over $250k. Even these types of houses are far, far out of our price range right now.

932 Cherrystone Dr, Los Gatos, CA 95032 | realtor.com®

We cannot compete with the tech money, venture capital, wealth management directors, tech consulting, corporate law, finance partners in the area.

I know that no one goes into medicine for the money (myself included) but I never thought it would be this hard to just survive in an area.

Should we move? Does anyone make it work in these VHCOL areas. All my partners are older and bought in years before the market got this bad.

Thank you!

That house looks like a $450K-$550K home in most parts of the country (I am being generous). So, normally I would advise you to stick it out but your income needs to be north of $850K to live in that area. Your best solution is to find another job where your income would be $600K and a home for your family would cost no more than $800K. Good Luck.

 

[Howard888]

I have no idea why anyone would live in CA without making 2M a year with those taxes and even then I find it crazy. Do what the rest of CA is doing and get out of there. Idaho, Ariz, Texas, Florida. Wouldn’t do Austin though. While not quite as bad, home prices have skyrocketed there and both groups there are terrible-one Napa (see thread on starting a residency) and one a less well off USAP group. Dallas the way to go in Texas. NC a gem but be careful of amcs around. . Problem with southeast is amcs in a lot of these places so salaries less. Still private groups or hospital employed jobs in some areas though making more than what you are at half the col. much better places to raise kids too with less traffic. Get the out of CA -doesn’t work for medicine

 

[NITRAS]

Bay area real estate has made a lot of people rich. If you’re willing to take a big part of that 12k/mo and put it toward a mortgage you can make it work but you’ll have to mentally look at that as part of your retirement plan. Also note that your house value is likely to be correlated to the local tech/VC/finance performance as those are the people driving up the prices.

Based on the info you gave I’d probably just keep saving/renting and figure things out closer to when kids start school. If I didn’t have family in the area I’d probably move.

His long term plan needs to include owning their housing. I have no idea what the housing costs in the area will do. They may continue to go up, or go down if CA continues it trek through insanity. Housing is the biggest expense in most people‘s budget and owning will mitigate the risk of the cost of housing going up. If the OP can’t reasonably expect to buy and likely outright own a house by retirement, they should move.

Nothing is on fire. Saving 12k a month is fine. Kids can be expensive, but the biggest cost of them is the loss in income from stepping back to take care of them (total worth it btw).

 

[PpfSuxTube]

Keep renting or move 🤷‍♂️. If you are saving 12k a month you are killing it though. Home ownership ain’t all it’s cracked up to be.

There is some financial sense to never owning your own home, renting forever. It's not something I could do for many reasons, mostly social but also I think it's hardwired into me from my European roots but it's certainly smart economically...

 

[Bearsfan01]

Hello all!

About 2.5 years in practice now. I love my job. It has a great breath of cases, great colleagues, great staff, etc. I make decent money, total comp is about $600k (total comp including 401k, insurance, etc) a year and the buy in was almost insignificant. I just don't know that we will ever make it financially here.

My wife and I save about $12k a month after maxing out our 401ks, spending $7k on rent, and other expenses. Children are on the way and we want a house. We have saved up over $250k. Even these types of houses are far, far out of our price range right now.

932 Cherrystone Dr, Los Gatos, CA 95032 | realtor.com®

We cannot compete with the tech money, venture capital, wealth management directors, tech consulting, corporate law, finance partners in the area.

I know that no one goes into medicine for the money (myself included) but I never thought it would be this hard to just survive in an area.

Should we move? Does anyone make it work in these VHCOL areas. All my partners are older and bought in years before the market got this bad.

Thank you!

I just wanted to reiterate what other people have said in that kids are expensive. If you are stretched out right now pre-kids, it will only get exponentially harder: daycare, food, clothes, college savings, summer camps, sports, vacations.

The only problem with renting in a VHCOL area like the bay area is that you have no price control. Owning a place with a fixed rate mortgage offers you some predictability. Where you live, the landlords can easily jack up the rent 5% each year, or more, without your salary keeping up.

Do you have to jump straight into a single-family home in one of the most expensive neighborhoods? I believe plenty of others in your area have started out by purchasing a townhome/condo in a cheaper area, particularly if you don’t have to worry about school districts right away. Maybe then build some equity and look into moving to a bigger place in a nicer school district 5+ years from now.

Good luck. You and your spouse seem intelligent and disciplined. I’m sure you guys will do great with whatever decision you make.

 

[sevo00]

Stick it out man. Money isn’t everything. There are families making 300k that are doing fine in that area.

 

[agammaglobulin]

I’d probably try to move - Marin, East bay, etc. You could still be in the Bay Area but not the most expensive part.

 

[amyl]

I agree with Howard - dallas is where it’s at. My husband and I love California but cannot justify the cost of living (housing, etc). We are hiring one more generalist and one more cards person if the op is interested…. But lots of dallas is hiring if you don’t like my group - pm me and tell me what you want and I’ll send you in the right direction.
Other markets i find interesting if dallas is out - Vegas and the Carolina’s

 

[DoctwoB]

A couple things from a fellow Bay Area doc.

1. Consider renting for longer, especially if you're not certain you're going to stay long term. Bay Area is skewed in that the price of rent is often half what the corresponding mortgage would be. Now buyers historically do better due to appreciation and prop 13, but past vs future results etc.

2. Consider areas that are a bit cheaper, especially if you don't need public schools for a while. Going into San Jose or Milpitas or Morgan hill or Scot's valley will save $ at the expense of commute.

3. Remember you marry the house but date your interest rate. At these price ranges interest rates have a massive impact on what you are paying. If you buy at current rates you could refi and pay much less if rates go down. Which will probably but not definitely happen at some point in the future. If you wait it out to buy, I strongly suspect prices will go way up once interest rates stop holding them down.

4. I hate to say it because I love the area, but other commentators are right that if you don't have major ties to the area like family or a spouse in tech you will do much better financially almost anywhere else.

 

[sloh]

Stick it out man. Money isn’t everything. There are families making 300k that are doing fine in that area.

Doing “fine?”

 

[Shimmy8]

Are you saving $12k/month and still enjoying life?

If so, just wait it out. But if you’re living like a resident and not traveling and not having fun without kids…not worth it imo.

We work and have worked too hard to live like that.

 

[<(^_^)>]

Some missing info…How much does your wife make? How much would they make in a lower cost of living city? Are you maxing 401k to the tune of 66k for yourself and 66k for your wife? In that case you are saving 144k + 132k = 276k. Thats pretty good honestly.

If you want to own a house any time soon then you will probably need to move, but it seems fine if you are ok with continuing to rent. Many people may not be aware, but California heavily subsidizes hoarding houses so people cling onto houses indefinitely. That may mean you can rent out a house that costs 3 million for 8k a month. It’s a very strange real estate market.

Just as a side note, this year you will also pay another ~5k in income taxes as they just increased taxes again (1.1% over about 150k).

 

[gaspusher]

Hello!

Thank you all for your thoughtful comments.

When I say $12k in savings, I am referring to the "house fund" savings, HYSA. We put other savings in VOO, VTI, QQQ as part of our taxed accounts (non 401k, IRA). The $12k (roughly $250k to date) is only for a down payment or a super duper rainy day.

The tie we have to the area is the geography mainly. There are few places in the country that we can go on a beautiful hike through redwood forests or cliffside mountains, and walk on the beach that same night. There are few places were we can get fresh seafood or farm to table organic produce so plentiful. This is what we really like about the area we live in.

To answer some of the questions above. My wife is has a W2 job making about $140k (could make this type of money anywhere else in the US too). So together we bring in about $30k a month in take home cash flow after taxes and tax deferred savings. $7k goes toward rent (more like $8k after utilities and such). We would both go insane with the rental properties that you get for under $7k a month here.

We live just as we did when I was a resident otherwise. Same cars, dated and old. We eat out only once a month because the costs are so high (>200 dollars for a nice meal), so we cook at home every night. One to two large vacations per year abroad. Student loans, paying off wedding expenses, grocery bills, etc. All these things add up and are costly. However, yes, no children just yet, but that will put a huge financial dent in things.

The first year we did not enjoy life because I was always working and stressed my first year out of training. On top of that I was studying for boards when I was home. After the exams went away we enjoyed being outside, hiking/biking/surfing. I don't know where else we can get this type of enjoyment.

It's just very tough to swallow a 3 million dollar starter home (that as multiple people mentioned is worth no where near what the market dictates here) with a 6.5% interest rate that looks like the one I attached (and a $600k down payment). We simply do not make that much money to make that work, and may never will.

For a house to work, it needs to be something that would simply carry us for 10-15 years and likely appreciate 5-6% each year. As was pointed out, renting is half what a mortgage would cost, however with a mortgage I feel that I would be getting 5-6% interest on my dollar with ownership. With renting I'm paying half but getting 0% return on that half. I'd need to get 10% on the other half to even draw even, which could happen in the market?

 

[pgg]

If you love the outdoors, just remember that there are 400+ national parks nationwide and the ocean touches 20 (?) states not counting Alaska and Hawaii. California's got variety and great weather but there are other beautiful places to live.

 

[aneftp]

Hello!

Thank you all for your thoughtful comments.

When I say $12k in savings, I am referring to the "house fund" savings, HYSA. We put other savings in VOO, VTI, QQQ as part of our taxed accounts (non 401k, IRA). The $12k (roughly $250k to date) is only for a down payment or a super duper rainy day.

The tie we have to the area is the geography mainly. There are few places in the country that we can go on a beautiful hike through redwood forests or cliffside mountains, and walk on the beach that same night. There are few places were we can get fresh seafood or farm to table organic produce so plentiful. This is what we really like about the area we live in.

To answer some of the questions above. My wife is has a W2 job making about $140k (could make this type of money anywhere else in the US too). So together we bring in about $30k a month in take home cash flow after taxes and tax deferred savings. $7k goes toward rent (more like $8k after utilities and such). We would both go insane with the rental properties that you get for under $7k a month here.

We live just as we did when I was a resident otherwise. Same cars, dated and old. We eat out only once a month because the costs are so high (>200 dollars for a nice meal), so we cook at home every night. One to two large vacations per year abroad. Student loans, paying off wedding expenses, grocery bills, etc. All these things add up and are costly. However, yes, no children just yet, but that will put a huge financial dent in things.

The first year we did not enjoy life because I was always working and stressed my first year out of training. On top of that I was studying for boards when I was home. After the exams went away we enjoyed being outside, hiking/biking/surfing. I don't know where else we can get this type of enjoyment.

It's just very tough to swallow a 3 million dollar starter home (that as multiple people mentioned is worth no where near what the market dictates here) with a 6.5% interest rate that looks like the one I attached (and a $600k down payment). We simply do not make that much money to make that work, and may never will.

For a house to work, it needs to be something that would simply carry us for 10-15 years and likely appreciate 5-6% each year. As was pointed out, renting is half what a mortgage would cost, however with a mortgage I feel that I would be getting 5-6% interest on my dollar with ownership. With renting I'm paying half but getting 0% return on that half. I'd need to get 10% on the other half to even draw even, which could happen in the market?

My advice is unless u have mom and dad down the street to help with child care. Do not buy. There were no real ties to the area.

Real estate drops significantly and the further you move away from the central core area. Like Almaden south or Campbell. Or But that doesn’t seem to be an option for you either for ur tastes. Those homes likely 1 million dollar cheaper for same sq footage

 

[GoBeers]

move to san diego or orange county. slightly cheaper with same lifestyle

 

[<(^_^)>]

For a house to work, it needs to be something that would simply carry us for 10-15 years and likely appreciate 5-6% each year. As was pointed out, renting is half what a mortgage would cost, however with a mortgage I feel that I would be getting 5-6% interest on my dollar with ownership. With renting I'm paying half but getting 0% return on that half. I'd need to get 10% on the other half to even draw even, which could happen in the market?

5-6% for Bay Area housing is a generous assumption and not a guarantee moving forward imo. At some point even with minimal supply someone has to buy these things and they can't all be tech executives. We have seen housing flat line in bay area over the last few years with remote work. As fewer and fewer people own houses in California (a majority currently do not own homes) the voting block of people that previously limited property taxes and new development are becoming less powerful. We already saw some portions of prop 13 repealed. I would be surprised if prop 13 survives another 10-15 years. I would expect suburbs to increasingly have apartment complexes built in them, because if you're a 20 something year old at google that can't hope to afford a SFH why do you care about "neighborhood feel"? You probably don't even want to live there, you just want rent to be less.

If you want a house for the sake of having a house (being able to change it as you see fit, security of locked in payments, stability of school district for your kids etc.) I would recommend buying a house like this: 3293 Todd Way, San Jose, CA 95124 | MLS #ML81950373 | Zillow and commuting a bit and compromising on lot size. Parks are free and your kid will have just as much fun running around the park.

move to san diego or orange county. slightly cheaper with same lifestyle

Gaspusher wants to live in a fancy part of Bay Area, the fancy parts of Orange County/San Diego are also expensive. Fundamentally I don't think it's worth moving 500 miles/changing from a job you like/starting over building your social network for a sort of similar experience that's maybe a bit cheaper. I also know that in general pay is slightly better for Northern California than Southern California, by about 10%. So it's even more of a wash.

 

[cytocide]

confused by this total comp. Usually people don’t factor in employers 401k contributions or malpractice (unless you are a business from my limited understanding) or employer health insurance or other insurances. If you are factoring all that in, you are underpaid.

 

[HemeOncHopeful19]

Hello!

Thank you all for your thoughtful comments.

When I say $12k in savings, I am referring to the "house fund" savings, HYSA. We put other savings in VOO, VTI, QQQ as part of our taxed accounts (non 401k, IRA). The $12k (roughly $250k to date) is only for a down payment or a super duper rainy day.

The tie we have to the area is the geography mainly. There are few places in the country that we can go on a beautiful hike through redwood forests or cliffside mountains, and walk on the beach that same night. There are few places were we can get fresh seafood or farm to table organic produce so plentiful. This is what we really like about the area we live in.

My brother in Christ, what in the name of marketing PR firm buzzwords is “farm to table organic produce” and why is it worth paying $2 million more for a house?

 

[gaspusher]

I apologize. Comp is salary plus 401k contribution. Medical and malpractice is provided to all in the group and not included in comp. Comp is purely money coming to me. I understand that’s not how I may have phrased it.

 

[Hoya11]

My brother in Christ, what in the name of marketing PR firm buzzwords is “farm to table organic produce” and why is it worth paying $2 million more for a house?

lol yes as soon as i read that post i thought "theyre not moving"

 

[DirtDocMD]

There are few places were we can get fresh seafood or farm to table organic produce so plentiful.

Everyone’s got their “passions” and “tastes”, so more power to you, but wouldn’t it have just been easier to tell everyone, up front, “We ain’t moving!”

—-Sincerely,
Chicken fried steak and PopTarts in flyover country

😜

 

[IIMC]

We just left the Bay Area after over 10 years in PP and we wish we would have left much earlier. I estimate that we sank nearly 500k in rent over that period (some of these rentals were pretty crappy btw). No you can’t keep up with the techies, finance bros, and others with generational wealth. You will work your tail off nights, weekends, holidays and still be house poor in your $2mil 1500sq fixer upper.

I enjoyed living in the Bay while I was there (love that farm to table stuff) but now that I’m older and wiser I wish I had lived in a less costly area so I could save more $$$ and go part time earlier.

Don’t force yourself into an unbearable commute by buying a more affordable house further away. Look for a new job out of the Bay.

 

[gaspusher]

We just left the Bay Area after over 10 years in PP and we wish we would have left much earlier. I estimate that we sank nearly 500k in rent over that period (some of these rentals were pretty crappy btw). No you can’t keep up with the techies, finance bros, and others with generational wealth. You will work your tail off nights, weekends, holidays and still be house poor in your $2mil 1500sq fixer upper.

I enjoyed living in the Bay while I was there (love that farm to table stuff) but now that I’m older and wiser I wish I had lived in a less costly area so I could save more $$$ and go part time earlier.

Don’t force yourself into an unbearable commute by buying a more affordable house further away. Look for a new job out of the Bay.

Yes, I have a bad feeling I will sound just as regretful as you sound 10 years from now. Honestly, $500k is not bad for 10 years of rent. At our pace we will be spending nearly 1 million if we rent like this for 10 years. It’s very humbling to say the least living here and seeing just how wealthy everyone else is.

 

[HemeOncHopeful19]

Yes, I have a bad feeling I will sound just as regretful as you sound 10 years from now. Honestly, $500k is not bad for 10 years of rent. At our pace we will be spending nearly 1 million if we rent like this for 10 years. It’s very humbling to say the least living here and seeing just how wealthy everyone else is.

Probably spend another half million in taxes if you live there 10 years too over other states.

I’m still waiting on this organic farm to table veggie stuff! Sounds like something my wife would read about on a blog

 

[BLADEMDA]

Probably spend another half million in taxes if you live there 10 years too over other states.

I’m still waiting on this organic farm to table veggie stuff! Sounds like something my wife would read about on a blog

With what the OP Is paying in rent and taxes he can buy his own farm and have a dozen migrants work there. I can never understand the lure of paying $3 million for a run down, small house in California. Plus the high taxes and high costs of everything else. No thanks. I can assure you that this isn't the path to prosperity and retirement before age 65 on a $600K salary. The OP need to be making at least $800K, if not $850, to remain in that location and even with that salary It's still not enough for me to live there.

 

[pgg]

If you want a house for the sake of having a house (being able to change it as you see fit, security of locked in payments, stability of school district for your kids etc.) I would recommend buying a house like this: 3293 Todd Way, San Jose, CA 95124 | MLS #ML81950373 | Zillow and commuting a bit and compromising on lot size. Parks are free and your kid will have just as much fun running around the park.

$1.8 million for commuter hell.

If this is the "compromise" wow, get out of the bay area.

 

[DrN2O]

One thing I may have missed among all the valid advices is BUY a house, SOMEWHERE ELSE. If you are saving 12K monthly, you can afford to buy almost anywhere else outside a few places. You can offset part of the mortgage with rent income. You are hedging against high interest rate and devaluation of your savings. It could be your starter home in case you want to move away from BA.

 

[aneftp]

We must remember that other industries Iike teaching /nursing get locality pay differential to live in high cost areas like the Bay Area out west.

There is no locality “doctor” pay adjusted per region. This is why teachers in Florida or other parts of the south get only 30k to start and maybe max out at 60k after 20’plus years.

Vs up north in higher cost areas they start out at 50k and max out at 100k. I can assure you my doctor salary in Florida for same work would be the same as up north with a higher cost of living.

That’s why we are trying to tell the Op. their 600k salary is pretty average throughout the country for doctor pay. But a Bay Area nurse is likely getting paid 20% more than in a Florida nurse due to locality pay differential.

So OP should really be getting paid 800k pay adjusted if there was such thing as locality pay for doctors.

 

[dozitgetchahi]

Hello!

Thank you all for your thoughtful comments.

When I say $12k in savings, I am referring to the "house fund" savings, HYSA. We put other savings in VOO, VTI, QQQ as part of our taxed accounts (non 401k, IRA). The $12k (roughly $250k to date) is only for a down payment or a super duper rainy day.

The tie we have to the area is the geography mainly. There are few places in the country that we can go on a beautiful hike through redwood forests or cliffside mountains, and walk on the beach that same night. There are few places were we can get fresh seafood or farm to table organic produce so plentiful. This is what we really like about the area we live in.

To answer some of the questions above. My wife is has a W2 job making about $140k (could make this type of money anywhere else in the US too). So together we bring in about $30k a month in take home cash flow after taxes and tax deferred savings. $7k goes toward rent (more like $8k after utilities and such). We would both go insane with the rental properties that you get for under $7k a month here.

We live just as we did when I was a resident otherwise. Same cars, dated and old. We eat out only once a month because the costs are so high (>200 dollars for a nice meal), so we cook at home every night. One to two large vacations per year abroad. Student loans, paying off wedding expenses, grocery bills, etc. All these things add up and are costly. However, yes, no children just yet, but that will put a huge financial dent in things.

The first year we did not enjoy life because I was always working and stressed my first year out of training. On top of that I was studying for boards when I was home. After the exams went away we enjoyed being outside, hiking/biking/surfing. I don't know where else we can get this type of enjoyment.

It's just very tough to swallow a 3 million dollar starter home (that as multiple people mentioned is worth no where near what the market dictates here) with a 6.5% interest rate that looks like the one I attached (and a $600k down payment). We simply do not make that much money to make that work, and may never will.

For a house to work, it needs to be something that would simply carry us for 10-15 years and likely appreciate 5-6% each year. As was pointed out, renting is half what a mortgage would cost, however with a mortgage I feel that I would be getting 5-6% interest on my dollar with ownership. With renting I'm paying half but getting 0% return on that half. I'd need to get 10% on the other half to even draw even, which could happen in the market?

You need to move. Everything you describe as far as amenities go is available elsewhere, for less $$$. And how much can you actually enjoy any of that when it costs as much as it does? California has some sort of weird mind warp on people, I swear…

Look, back as a fellow I went to San Diego for a conference…all my co fellows and I were like “wow, maybe we should look for jobs here” as soon as we got off the plane and felt the sun. So I get it. Cali has great weather, and this vibe that can be intoxicating. Then we looked at the housing prices…yeah it’s gonna be a no from me, dawg.

Look dude. I’m not even an anesthesiologist, I’m a rheumatologist who was making a pitiful salary ($250-275k) on the East coast fresh out of fellowship…and I was struggling. Everything was so expensive, and I had loans to pay…it was distressing and frustrating because you feel like you worked so hard to not even be able to comfortably live what seems like a relatively basic lifestyle.

Then I heard about private practice incomes as a rheumatologist. I live in semi rural IL and I made $560k last year - in a place where COL is probably half of what it was on the east coast. This change has made a HUGE difference in my quality of life. I can actually afford to pay for things….I’m knocking out debt very quickly…life is going in a very different direction, and I’m loving it.

You can stay there struggling, thinking that “farm to table organic produce” and beach hikes and whatever else are worth straining under the weight of a disgustingly high COL, but I assure you 1) they aren’t and 2) all of what you think is unique to California can be found elsewhere for a much more reasonable cost. Take it from someone who grew up in a home where “money problems” were a thing - there is no better gift you can give yourself and your family than to be able to thrive without money concerns. It feels like 10000 pounds has been lifted off your back. In much of the country, your salary would let you live like a king, and you might even make more than you are there. Why stay in Cali living like a pauper?

 

[dozitgetchahi]

We must remember that other industries Iike teaching /nursing get locality pay differential to live in high cost areas like the Bay Area out west.

There is no locality “doctor” pay adjusted per region. This is why teachers in Florida or other parts of the south get only 30k to start and maybe max out at 60k after 20’plus years.

Vs up north in higher cost areas they start out at 50k and max out at 100k. I can assure you my doctor salary in Florida for same work would be the same as up north with a higher cost of living.

That’s why we are trying to tell the Op. their 600k salary is pretty average throughout the country for doctor pay. But a Bay Area nurse is likely getting paid 20% more than in a Florida nurse due to locality pay differential.

So OP should really be getting paid 800k pay adjusted if there was such thing as locality pay for doctors.

If anything, the “location pay adjustment” for doctors is negative in HCOL areas…I usually see doctors making less than their counterparts elsewhere because these locales are saturated with a surplus of doctors that drive wages down.

 

[dozitgetchahi]

My brother in Christ, what in the name of marketing PR firm buzzwords is “farm to table organic produce” and why is it worth paying $2 million more for a house?

It’s available anywhere else in America too. I live in rural Illinois and I can get as much of this farm to table fresh produce as I want. You don’t have to live in one of the most expensive locales in America to get access to this.

 

[abolt18]

My brother in Christ, what in the name of marketing PR firm buzzwords is “farm to table organic produce” and why is it worth paying $2 million more for a house?

One of my favorite things I've ever read on SDN.

 

[Drwine]

I am grateful to have worked in low cost of living area. When I started the pay was lower but that changed 15-20 years ago to making top dollar. I am happy the way my life turned out.

 

[dozitgetchahi]

There is some financial sense to never owning your own home, renting forever. It's not something I could do for many reasons, mostly social but also I think it's hardwired into me from my European roots but it's certainly smart economically...

While I do agree with you to an extent (and have always felt that the obsession with real estate in the US is a bit bizarre), I also think there is no reason on god’s green earth why someone making $600k+ a year in this country shouldn’t be able to buy a house if they want to…unless they’re living in one of these insane areas like California. In much of this land, $600k a year is a very high salary.

 

[ChiDO]

I love looking at real estate in San Francisco or random ritzy areas like Naples, FL. $80m 5k sqft house, $3m 1200 Sq ft house, $1m 600sq ft shack...

It's insanity.

Move to flyover country or Arizona or Texas , make the same or more and expenses are 80% cheaper.