If you need a higher probability of constructing extra wealth than the typical individual, reside in one of the vital costly cities on this planet. These cities are costly for a purpose. They comprise essentially the most helpful corporations, the richest folks, essentially the most capital, and the most effective universities on the planet.
Sure, the competitors is cutthroat. However you dramatically enhance your luck floor space due to the sheer variety of alternatives. And if you cannot compete professionally, you may all the time attempt to marry somebody who’s successful. I am solely half joking. Assortative mating is likely one of the greatest wealth-building forces no one needs to speak about.
Consider it this fashion. Residing in an costly metropolis is taking part in OFFENSE. Your earnings and fairness upside are theoretically limitless. Residing in an inexpensive metropolis is taking part in DEFENSE. You’ll be able to solely lower prices a lot earlier than you are consuming rice and beans in a paid-off home questioning what occurred to your 30s. No one ever acquired wealthy on protection alone. You want offense to attain.
After 10 years of grinding it out professionally (and romantically), you may relaxation straightforward realizing you gave it your greatest shot. In case you strike it wealthy, you may have an countless variety of relocation choices with out feeling constrained. Or you may merely maintain dwelling in your costly metropolis with out a lot monetary concern.
In case you do not strike it wealthy, there are many fantastic, extra reasonably priced cities ready for you. The optionality solely flows one course, although. It is a lot simpler to downshift from San Francisco to Des Moines than the reverse.
Go the place the motion is. Get your foot within the door in any cheap capability, construct a community, and let serendipity do its factor. As many distant employees have found, out of sight actually does imply out of thoughts, and out of thoughts means misplaced alternatives.
Excessive Dwelling Costs Are A Constructive Sign, Not A Knock
The standard three-bedroom, two-bathroom, ~1,800 sq. foot dwelling in San Francisco prices about $2.2 million. A household of 4 must earn not less than $400,000 a yr, after placing 20% down, to really feel considerably comfy affording one. This assumes no parental assist, which roughly 40% of first-time homebuyers now obtain.
Some assume the median worth is outrageous. However think about this: when you joined an organization like Google in early 2023, your inventory is up virtually 4X since then. In the meantime, the median San Francisco dwelling worth rose about 30% over the identical interval, from $1.7 million to $2.2 million. In different phrases, for the well-positioned native employee, housing really acquired MORE reasonably priced, not much less.
As an alternative of viewing excessive dwelling costs as a unfavorable cost-of-living sign, view them as a sign of how a lot monetary alternative exists within the space. Dwelling costs are largely pushed by the incomes and wealth of the folks dwelling there. These properties are costly exactly as a result of sufficient residents earn sufficient to pay for them. In the event that they did not, costs would fall.
Whole compensation packages for 23-year-old faculty graduates in large tech run between $150,000 and $200,000. Ten years later, these of us are simply incomes over $350,000. Considered one of my tenants joined a number one AI in 2025 and has seen his fairness bundle 5X in only one yr. For him and his associate, the $10,000 a month they pay in hire for a five-bedroom, four-bathroom home is definitely reasonably priced.
So paradoxically, it is best to get excited about excessive dwelling costs and purchase one your self, as a result of wealth is sticky and attracts extra wealth. Except the geography or climate is horrible, costly cities are likely to maintain getting dearer.
Positive, you would possibly sooner or later get so rich the federal government tries to impose a particular tax on you. Congratulations. At that time you may afford something the federal government throws your method. Or, you may simply relocate wherever and reside like royalty.
The World’s Finest Leisure Comes To You
This is the a part of the expensive-city cut price that frugal folks, particularly FIRE of us like me, persistently undervalue: the leisure.
When Workforce USA performed Bosnia and Herzegovina at Levi’s Stadium on July 1 in a win-or-go-home World Cup knockout match, I used to be 2,400 miles away in Honolulu, having left San Francisco the day earlier than. A single-elimination World Cup match, 30 miles from my home, and I missed it.
To make myself really feel higher, I instructed myself I wasn’t prepared to pay $1,500 to $2,000 per ticket for middling seats. I actually wasn’t prepared to pay $6,000 to $8,000 for my household of 4.
However whereas lounging on the seashore in Kahala, totally free, the reality crept in: I might have gone. I ought to have gone. The USA received 2-0 and earned its first World Cup knockout-stage victory since 2002, in my yard, and I watched the highlights on my cellphone like most in America.
FIRE Can Prohibit You From Spending
This is the flawed FIRE logic I fell for: why pay 1000’s to attend when you may watch it on TV totally free? As a result of ANYBODY can watch it on TV totally free. The man in the midst of nowhere who moved there to economize watches the identical broadcast I do. The complete level of paying a premium to reside in a world-class metropolis is that the world’s best occasions come to YOU. In case you by no means attend them, you are paying the expensive-city cowl cost after which refusing to enter the membership.
Take into consideration the visiting followers. Levi’s Stadium holds about 70,000 folks for these matches. Tens of 1000’s of them paid for flights, accommodations, meals, floor transportation, AND tickets. If a fan from Bosnia can justify $10,000 all-in, absolutely I might justify an Uber journey and a ticket. In fact I might.
When world-class leisure involves your costly metropolis, you go. It is the dividend you are owed for paying extra for housing, vitality, schooling, and taxes than virtually anybody else on Earth. Skipping the occasions is like proudly owning a dividend inventory and refusing to money the checks.
Leisure Examples Of What The Bay Space Alone Has Hosted
Do not take my phrase for it. This is a sampling of the world-class occasions which have come to the San Francisco Bay Space, all inside a roughly 55-minute drive of my home. Strive replicating this record in a low-cost-of-living paradise.
| Occasion | When | What Occurred |
|---|---|---|
| Ryder Cup (golf) | September 2033 (upcoming) | The Olympic Membership hosts golf’s best crew occasion, with the 2028 PGA Championship coming there first as a warm-up act |
| FIFA World Cup 2026 | June–July 2026 | Six matches at Levi’s Stadium, capped by USA 2, Bosnia-Herzegovina 0 on July 1, America’s first knockout-round win since 2002 |
| Tremendous Bowl LX | February 8, 2026 | Seahawks 29, Patriots 13 at Levi’s Stadium, with Unhealthy Bunny headlining halftime |
| Laver Cup (tennis) | September 2025 | Workforce World beat Workforce Europe 15-9 at Chase Middle, with Taylor Fritz beautiful world No. 1 Carlos Alcaraz |
| NBA All-Star Weekend | February 2025 | The league’s greatest descended on Chase Middle |
| Taylor Swift Eras Tour | July 2023 | Two sold-out nights at Levi’s Stadium, the largest tour in music historical past |
| Beyoncé Renaissance Tour | August 2023 | One other world icon, similar stadium, similar summer time |
| APEC Summit | November 2023 | Biden, Xi, and world leaders took over San Francisco |
| U.S. Girls’s Open (golf) | June 2021 | Yuka Saso outlasted Nasa Hataoka in a playoff at The Olympic Membership to turn into the primary Filipina main champion, after Lexi Thompson’s heartbreaking back-nine collapse |
| PGA Championship | August 2020 | Collin Morikawa, a Cal Berkeley product, received his first main at TPC Harding Park together with his well-known drive on the sixteenth |
| Warriors Dynasty | 2015–2022 | 4 NBA titles (2015, 2017, 2018, 2022) and 6 Finals appearances, all playable in individual |
| CFP Nationwide Championship | January 2019 | Clemson 44, Alabama 16 at Levi’s Stadium |
| Tremendous Bowl 50 | February 7, 2016 | Broncos 24, Panthers 10, Peyton Manning’s last sport |
| Copa AmĂ©rica Centenario | June 2016 | Levi’s Stadium hosted matches within the match’s historic U.S. version |
| WrestleMania 31 | March 2015 | Over 76,000 followers packed Levi’s Stadium |
| Giants World Sequence Runs | 2010, 2012, 2014 | Three titles in 5 years, with World Sequence video games at Oracle Park |
| America’s Cup | September 2013 | Oracle Workforce USA’s legendary comeback from 8-1 right down to win 9-8 on San Francisco Bay |
| U.S. Open (golf) | June 2012 | Webb Simpson received at The Olympic Membership, the fifth U.S. Open hosted on these well-known cypress-lined fairways |
And that is simply the marquee stuff. Each single yr there’s Outdoors Lands, Hardly Strictly Bluegrass (a world-class music competition that’s actually free), Fleet Week with the Blue Angels roaring over the bay, numerous skilled tennis tournaments, startup conferences and demo days, and extra Michelin stars per capita than virtually wherever within the nation. That is what you get if you pay taxes dwelling in an costly metropolis.
After I lived in New York Metropolis from 1999 to 2001, my favourite metropolis on this planet for six months a yr, the Yankees received the World Sequence twice. Going to these video games, catching Broadway reveals, consuming at unimaginable eating places, and stumbling into random bars and warehouse events was a blast. That is the expensive-city life. Work onerous, certain. However you are by no means bored.
Offense Builds Wealth, However Freedom Is The Level
On the finish of the day, we’re not constructing wealth for the sake of a much bigger quantity. We’re constructing wealth to be extra free and reside a greater life. In case you play offense in an costly metropolis, you get each: extra earnings and fairness upside than you can ever generate taking part in protection in an inexpensive metropolis, AND easy accessibility to the best occasions on Earth.
The tragedy is being rich sufficient to attend and nonetheless watching out of your sofa as a result of the frugality muscle will not loosen up. I’ve written earlier than about how the toughest a part of FIRE is not accumulating cash, it is giving your self permission to spend it. Lacking that World Cup match was my newest reminder.
So this is my new rule, and I invite you to undertake it: if a once-every-four-years (or rarer) occasion comes inside an hour of your house, you go. No spreadsheet evaluation. No “let me test the resale market Wednesday.” You go. The reminiscence dividend compounds far longer than no matter that cash would have earned within the S&P 500.
The subsequent World Cup on dwelling soil in all probability will not come again for many years. The subsequent Tremendous Bowl at Levi’s? Who is aware of. However one thing else spectacular is all the time coming, as a result of that is what costly cities do. They placed on a present.
Be sure you’re within the enviornment, not on the sofa.
Readers: Do you reside in an costly metropolis, and do you really benefit from the occasions that come to city? Or have you ever moved someplace cheaper and located the trade-off price it? What’s the most effective reside occasion you virtually skipped to economize?
Wealth-Constructing Ideas
Make investments In Actual Property Passively: If seven-figure dwelling costs in costly cities make your eyes water, you may nonetheless play offense in actual property with no jumbo mortgage. I’ve invested over $500,000 with Fundrise, which focuses on residential and industrial properties within the heartland, the place valuations are decrease and yields are larger.
Earn earnings 100% passively, utilizing my BURL technique, whereas conserving your profession capital concentrated in an costly metropolis, whereas having extra enjoyable. Monetary Samurai is an investor in Fundrise, and Fundrise is a long-time sponsor of Monetary Samurai.
Construct Seven-Determine Wealth: If you wish to construct sufficient wealth to afford each the costly metropolis AND the tickets, decide up a duplicate of my USA At this time bestseller, Millionaire Milestones: Easy Steps to Seven Figures. The earlier you get to seven figures, the earlier you may cease debating whether or not the nice seats are price it.
Be part of 60,000+ Readers: For extra nuanced private finance content material, join the free Monetary Samurai publication. Monetary Samurai started in 2009 and is likely one of the most trusted independently-run private finance websites at the moment.
