Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Careers - Employment
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

DW Simpson International Actuarial Jobs
Canada  Asia  Australia  Bermuda  Latin America  Europe


Reply
 
Thread Tools Search this Thread Display Modes
  #41  
Old 02-26-2019, 12:51 PM
yerromnitsuj yerromnitsuj is offline
Member
CAS
 
Join Date: Jan 2010
Posts: 575
Default

Quote:
Originally Posted by Westley View Post
Did you intentionally write $20K more per month?


lol SF COL.

Yeah, an extra $20k/year to move to SF and maintain lifestyle.... maybe from London.
Haha, nope. Year.
Reply With Quote
  #42  
Old 02-26-2019, 12:51 PM
Klaymen Klaymen is offline
Member
CAS
 
Join Date: Oct 2001
Posts: 20,425
Default

Quote:
Originally Posted by nonactuarialactuary View Post
Pretend it costs $20K/year to live the life you want in some small city.
OK we can stop there.

Zillow says my house is worth about $300K. It's a 2,800 sq. ft. 3-br home in Des Moines. Nothing fancy, mind you, but plenty of room for me, my wife, and my two grown-up kids. After you put down a 20% on my house and finance it over 30 years at 4.25%, you will have a payment of $1,230/mo. or $14,760/yr. You also need $5,200 for property taxes, $1,000 for home insurance, $50/mo for water and trash, and $150/mo for utilities. Those costs alone are $23,360 of after-tax money.

We haven't talked about transportation, clothing, food, ...

Sure, if you live alone, eat PBJ sandwiches, and rent a 1-br apartment you can live either place. Living on $20K is no problem. All you have to do is rule out ever having a family.

Assume tax you pay taxes of 12% federal + 5% state + 1.45% medicare + 7.65% social security = 26.1% then you need $23,360/0.739 = $31,610 of pre-tax money to live own my house.
__________________



Last edited by Klaymen; 02-26-2019 at 12:56 PM..
Reply With Quote
  #43  
Old 02-26-2019, 12:54 PM
Westley Westley is offline
Member
 
Join Date: Nov 2001
Posts: 30,554
Default

Quote:
Originally Posted by Klaymen View Post
Those costs alone are $23,360 of after-tax money.
So, $40-50K if you wanted the same thing in Manhattan.
Reply With Quote
  #44  
Old 02-26-2019, 12:55 PM
nonactuarialactuary nonactuarialactuary is offline
Member
Non-Actuary
 
Join Date: May 2008
Posts: 2,407
Default

Quote:
Originally Posted by Westley View Post
Reasons your logic is delusional:
1 You ignore taxes, which is one of the many reasons why the COL is so much higher
2 Everything else
I added taxes two sentences after the part you quoted. Please keep your trolling out of the professional sections of this forum.
Reply With Quote
  #45  
Old 02-26-2019, 01:02 PM
MooBeay MooBeay is offline
Member
 
Join Date: Jan 2004
Posts: 5,082
Default

Quote:
Originally Posted by Klaymen View Post
OK we can stop there.

Zillow says my house is worth about $300K. It's a 2,800 sq. ft. 3-br home in Des Moines. Nothing fancy, mind you, but plenty of room for me, my wife, and my two grown-up kids. After you put down a 20% on my house and finance it over 30 years at 4.25%, you will have a payment of $1,230/mo. or $14,760/yr. You also need $5,200 for property taxes, $1,000 for home insurance, $50/mo for water and trash, and $150/mo for utilities. Those costs alone are $23,360 of after-tax money.

We haven't talked about transportation, clothing, food, ...

Sure, if you live alone, eat PBJ sandwiches, and rent a 1-br apartment you can live either place. Living on $20K is no problem. All you have to do is rule out ever having a family.

Assume tax you pay taxes of 12% federal + 5% state + 1.45% medicare + 7.65% social security = 26.1% then you need $23,360/0.739 = $31,610 of pre-tax money to live own my house.
But you didn't stop there. You went on to actuate the sh*t out of that. Good work.
The other option would have been to "pretend" it is 50K or 75K or 100K instead of 20K and move right along.
Reply With Quote
  #46  
Old 02-26-2019, 01:49 PM
nonactuarialactuary nonactuarialactuary is offline
Member
Non-Actuary
 
Join Date: May 2008
Posts: 2,407
Default

Quote:
Originally Posted by Klaymen View Post
OK we can stop there.

Zillow says my house is worth about $300K. It's a 2,800 sq. ft. 3-br home in Des Moines. Nothing fancy, mind you, but plenty of room for me, my wife, and my two grown-up kids. After you put down a 20% on my house and finance it over 30 years at 4.25%, you will have a payment of $1,230/mo. or $14,760/yr. You also need $5,200 for property taxes, $1,000 for home insurance, $50/mo for water and trash, and $150/mo for utilities. Those costs alone are $23,360 of after-tax money.

We haven't talked about transportation, clothing, food, ...

Sure, if you live alone, eat PBJ sandwiches, and rent a 1-br apartment you can live either place. Living on $20K is no problem. All you have to do is rule out ever having a family.

Assume tax you pay taxes of 12% federal + 5% state + 1.45% medicare + 7.65% social security = 26.1% then you need $23,360/0.739 = $31,610 of pre-tax money to live own my house.
All of my numbers were illustrative. Iím not looking for precision to the dollar here, but instead talking in broad strokes: The COL calculator alone isnít sufficient to answer the question. You guys already know this. This is why low COL cities like Des Moines are suggested rather than truly small towns with fewer than a thousand people. The small towns are cheaper than the low COL cities, but youíd be worse off in a small town if you canít earn as high of an income as youíd get in Des Moines. By extension, the low COL cities are cheaper than the high COL cities, but youíd be worse off in Des Moines too if you canít earn as high of an income as youíd get in NYC. Thatís all Iím saying: double the COL does not require double the salary to maintain the same standard of living. You have to do the math for your own specific situation. That math can be counterintuitive sometimes.

It sounds like your situation is different from mine, and thatís fine. Personally, Iím married without kids or plans to have kids. A 2,800 square foot house would be extremely excessive for my own lifestyle: itís more than quadruple the size of every place Iíve ever lived in as an adult, and none of those places have felt cramped. Granted, you have four people in the house vs. two for my wife and I, but kids are a lifestyle choice that are better suited for some cities vs. others. Youíre downplaying the house as nothing fancy, but a house that large is a luxury that youíve chosen to purchase. People with different preferences might prefer purchasing other luxuries instead (e.g., proximity to a walkable downtown core). The best bang for your buck would be something where you can earn an NYC salary while paying small town Iowa prices and enjoying Southern California weather. Presumably, there arenít a lot of jobs like that. In the real actuarial job market, itís entirely possible to be better off financially in a higher COL city. This gets overlooked a lot.
Reply With Quote
  #47  
Old 02-26-2019, 02:11 PM
Poley McPoleface's Avatar
Poley McPoleface Poley McPoleface is offline
Member
CAS
 
Join Date: Feb 2019
Posts: 288
Default

I think nonactuarialactuary's point can be simplified to if you move to a new job in a new city and both net income and cost of living double then expendable income would also double.

Primary issue being that a rural area and urban center are just not comparable imo. They're different types of living and it's hard to compare owning a house in upstate NY to an apartment in Manhattan.
Reply With Quote
  #48  
Old 02-26-2019, 03:01 PM
Helena Lake's Avatar
Helena Lake Helena Lake is offline
Member
SOA AAA
 
Join Date: Jan 2019
Studying for Nothing ever again!
Favorite beer: Bourbon
Posts: 8,669
Default

Quote:
Originally Posted by nonactuarialactuary View Post
All of my numbers were illustrative. Iím not looking for precision to the dollar here, but instead talking in broad strokes: The COL calculator alone isnít sufficient to answer the question. You guys already know this. This is why low COL cities like Des Moines are suggested rather than truly small towns with fewer than a thousand people. The small towns are cheaper than the low COL cities, but youíd be worse off in a small town if you canít earn as high of an income as youíd get in Des Moines. By extension, the low COL cities are cheaper than the high COL cities, but youíd be worse off in Des Moines too if you canít earn as high of an income as youíd get in NYC. Thatís all Iím saying: double the COL does not require double the salary to maintain the same standard of living. You have to do the math for your own specific situation. That math can be counterintuitive sometimes.
I think you're overthinking it. I've seen lots of COL calculators that include different assumptions for housing, food, gas, and other elements that contribute to overall costs in a given area. Most of them, however, don't include "really small towns" and pretty much focus on Metropolitan areas and large cities. That's probably more a practical decision than anything else.
__________________
I'm the appropriate amount of terrified
Reply With Quote
  #49  
Old 02-26-2019, 03:47 PM
Harbinger Harbinger is offline
Notes Contributor
CAS
 
Join Date: Feb 2005
Posts: 2,438
Default

Quote:
Originally Posted by Fracktuary View Post
Chicago is colder than many places to the north due to lake effect snow and wind.
Not true, the lake actually makes the city warmer, not colder. Quite often it's 4-8 degrees warmer in the loop than a suburb 20 to 30 miles out.
__________________
har∑bin∑ger (hšr'bin-jer): One that indicates or foreshadows what is to come; a forerunner.
Reply With Quote
  #50  
Old 02-26-2019, 03:53 PM
Harbinger Harbinger is offline
Notes Contributor
CAS
 
Join Date: Feb 2005
Posts: 2,438
Default

Quote:
Originally Posted by Westley View Post
So, $40-50K if you wanted the same thing in Manhattan.
__________________
har∑bin∑ger (hšr'bin-jer): One that indicates or foreshadows what is to come; a forerunner.
Reply With Quote
Reply

Tags
cost, fat stacks, living, min-maxing life, p&c

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 10:32 AM.


Powered by vBulletin®
Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.50318 seconds with 9 queries