There is a general misconception in the FI community that in order to live an abundant life on a moderate or low income, one has to relocate to a cheap developing country or to a totally boring area in the US. This concept is called “Geoarbitrage” and it was made popular by Tim Ferris in the book “The 4-Hour Workweek”.
This notion is mostly based on fact but I feel like it is not always accurate. I’m living proof of that. I have lived most of my life in very expensive California and yet, I have been able to to achieve financial independence while still enjoying most of the pleasures of life.
California is an amazing state, well known for its beauty, almost perfect weather, and fascinating cultural diversity. But if you plan it accordingly, California can also be a very frugal place to live. Being mindful on how to spend your money can make the difference between taking advantage of everything the state has to offer or going broke and having to move to some other cheaper place.
Here are the 7 reasons why I still love California after all these years and why I think you too can achieve FI while living there:
- It is not really that Expensive. Once you are able to buy a house, everything else in California is not significantly more expensive than other parts of the US.
- Taxes for low income people are pretty low. If you retire early and are living on a moderate income (less than $40K per year), California doesn’t tax “poor” people that much.
- Amazing cultural diversity and the best ethnic restaurants. If you are a in low tax bracket, you will qualify for many state plans to help the needy.
- The weather is incredible. Los Angeles gets an average 14.93 inches of rain a year. Do I need to say more?
- Health care is pretty reasonable. If you make less than say 60K/year you will qualify for Obamacare subsidies and California has one one of the most generous implementations of Obacamacare in the whole county.
- Access to reasonably priced healthy food. I know what you are thinking, reasonably priced healthy food? Well, healthy food is never cheap but it doesn’t have to be expensive either. I regularly buy at Trader Joe’s, Ralphs, Grocery Outlet, and Sprouts and I can tell you that I find most produce to be at the same price if not cheaper than the rest of the county
- People make significantly more (especially if you work in high tech) I know this because I lived in Florida for a whole. The average salaries were so low over there that even with the lower cost of living, I ended up coming back to California.
So, here I am. After trying to live in New York and Florida, I had to come back to California because, although not perfect, this is a pretty good place if you want to enjoy life while working on your FI goals at the same time.
So, what do you think? Do you agree or disagree? Leave me a message below, tell me where you live and how your state or country compares to California.