Midpoint to FI Series #3: Geographic Gains

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The following is a case study for a recurring series, Midpoint to FI.  The goal of the Midpoint to FI is to feature case studies and interviews for people who are on their FI journey and trying to figure out “what next”.  
The general candidate will be someone who is:

  • Pursuing Financial Independence
  • Has a good handle on the income, expenses, and investments

But..may still be faced with some of the following issues:

  • How do I tolerate my job between now and FI?
  • Where is the best investment of my time?  
  • Can I grow my income or should I side hustle?
  • Am I where I want to live post FI?
  • Do I want to take the next step of the corporate ladder?
  • How do I give up my income and finally pull the early retirement lever?

This series is coming out of our first two case studies:

Should I Coast FI

Can the Landshark Retire Yet?

If you’re interested in doing an interview or a more customized case study, please reach out to me.   The participant will be given the final edit to help protect anonymity.  


Reader Case Study: Georgraphic Gains?

This case study is a result of a four month back and forth with a reader.  They have asked to remain anonymous and the details I’m sharing are going to be summarized into two back and forth exchanges with some certain things excluded to protect the reader’s privacy.

Initial Information:

Hi Shirts,

Something I saw you write in a recent post resonated with my wife and I.  You said: “I think Texas is a great place to earn a fortune.   A great place to live for lifestyle? That varies. You have to build a good sense of community because outdoor recreation just isn’t abundant. Coming from someone one day away from packing the moving truck and driving out of DFW”

We live in a big city in the middle of the country.  We are in our late 20s and quickly building our fortune with working-era MMM type jobs and salaries. We enjoy living in the downtown environment, the proximity to my wife’s family and we are stashing loads of money while still living lives of abundance. But as you experienced, the big city in the middle of the country leaves a lot to be desired.  We often struggle with the question, what are we doing here? We talk a lot about moving to places much smaller but where the job prospects aren’t as good. Places where most peoples’ “recreation” is not limited to eating out. Where people won’t look at us silly when we say we like to camp, or spent another weekend fishing (another reason you caught my attention), or backpacking out of state. We understand life is too short to live somewhere you don’t love, but we also see we are in the position to never work again if we buckle down and make the best of our lives here until FIRE.

What finally made you leave? And why? Why didn’t you go sooner, or later? I appreciate any insight you can share, and I hope the move went smoothly. Thanks.

That looks like a nice area to move to down there!

I replied with some information including referencing the Coast FI post and the power of building the first $500,000.   I asked some more specific questions about savings rate, size of their current stash, and career desires and trajectory, specifically how tied the reader was to advancement in their career.    I focused a lot on the career question because I believe that working in a big city in your 20s has numerous career benefits: Building a large professional network out of coworkers, multiple companies bidding up the job market, and a diversity of experience that’s just not available if you’re in a smaller town with one employer in your industry.  The big city lifestyle is likely more tolerable for people in their 20s than it is later in life, it certainly was for us. I shared that working in both Atlanta and Dallas were responsible for my income improvements in my career.  

Additional Details:

We both have working professional jobs.  We are both “individual contributors, non-management types”. We thought we hit it big this year when we both got promotions and our combined income exceeded $150,000 as a couple.   I think we are less stuck from changing companies with regards to golden handcuffs than you may have been.

By your figures we aren’t too far away from the CoastFI numbers that you talk about.  We are 26/27 with a $275,000 net worth, nearly all of which is invested in the market.   Our spending has been consistently around $48,000 and we are both fiscally conservative people. It is unlikely we would open up our spending much until we are comfortably past the $500,000 mark.  The information you sent regarding the first $500,000 was refreshing. I think we’ll be at that number by 30 even if we don’t see any additional pay increases.  

We think we want to stay as individual contributors.  I don’t have a desire for management work and in today’s dollars I think my salary can grow into the low six figures.  My wife has a goal to hit the next level in her career which would command a low six figure salary as well. Realistically she has a higher trajectory than me, but we also have the goal of starting a family and that may impact one or both of our careers.   I appreciate the comments about being tied to the career, we’ll reflect on that but I don’t think either of us are necessarily driven to be super high earnings with prestigious titles.   

My questions for you are: What finally made you leave? And why? Why didn’t you go sooner, or later? I appreciate any insight you can share, and I hope the move went smoothly. Thanks

Shirts Reply:

I enjoyed getting this message.  I can only speak to my situation with DFW, but I have to take it back a little bit more

My career essentially started in Atlanta at 25.  My wife and I married young and I spent my first three years working with my employer in her graduate school town with limited opportunities.  Outside of a poor choice in housing, we enjoyed our time in the Atlanta area. Four seasons, decent outdoor activity there and close by, plus it was a top 10 metropolitan area and helped grow my career.  We hit a “lean FI” number (not fully knowing it at the time) and I decided to pursue this career and the next level up job that I thought I had wanted for 5-7 years. That took us to a small town we weren’t thrilled with or really settled in and then I got offered a big promotion to DFW.   I loved the career but we struggled with the lifestyle and change.

Compounded on that my wife got a serious injury that was essentially a two year grinding challenge and I went from an amazing boss to someone who created problems instead of resolving them for me.  

This further reinforced my belief that someone’s 20s are for building your skill set, income, career, and net worth.  Judging by your start, I can see you’re doing that. I also think that once someone gets around $500,000 saved, especially if they can do it before the age of 40, they are heading down the path of ridiculous abundance at an early and regular retirement age.     

So what made me stay/leave Dallas?   I was working for a great boss up until June of 2016, that plus satisfying work (proving to myself that I could do the next level job) helped me tolerate the city.  This move also gave me a significant increase in my income, going from a role that would cap out in the mid 100s to something north of $300,000 once restricted stock started coming in.   

I had a decision to make early on when a new boss showed up after eighteen months into the role:  Do I grind through this for the visibility I had into bonuses, a higher pension, and restricted stock coming to stay in Dallas?  I figured I could make as much money there in 2-3 years as I could in 5-6 years elsewhere. In hindsight it wasn’t as big of a gap as I expected when the opportunities came up in better places to live like Nashville or Austin.  Unfortunately, I was just past the point of wanting to hit reset in my job, owe the company a new 3 year repayment agreement on moving expenses, and take on rebuilding my business again. The realization hit me that I should have moved to a more attractive area five years earlier (or never left Atlanta all together) once I knew what my career/earnings trajectory was.

Now I am telling anyone and everyone I can to try to move to their preferred location in their early 30s and get work in that location.  Build your skills, resume, income, and balance sheet in a big city then transfer those skills somewhere else. You build a lot of your lifetime friendships and community in your 30s.  We’re happy we moved from Dallas, but am in a new location resettling at 37 with everything that comes along with that. You also get the added benefit of searching for a job in your early 30s as that person who comes in with big city experience.  In my industry recruiters struggled to get talent to smaller areas. I imagine this is similar in a lot of industries.     

Other things to think about:

Early retirement life now is still “life” and life has its challenges, but it’s a pretty nice life.  My recreation choices now involve a 15 minute drive to hang out on the beach, a short drive to drop our kayak into water, and bike around town.  It’s the beach so it’s humid, but in the middle of the summer we can still walk the beach with showers and 78 degrees then enjoy fishing at sunset.   

What type of recreation do you enjoy?  If your expenses are at $48,000, then just one of your jobs will cover this.  I think your savings is a little thin at this point to completely downshift work, I would not consider that until after you hit $500,000.   Here’s my opinion about the big city options: A couple of the top 10 cities have decent recreations and even more of the top 30 size cities can meet whatever recreation you’re looking for with good recreational opportunities.  Out of the top 10 metro areas, LA, Atlanta, Miami, and Washington DC aren’t bad for the outdoors. You get into the top 30, add in places like Denver, Salt Lake City, Austin, Nashville and Tampa into the mix. I live in a smaller coastal market but there’s still a ton of hiring where I am the market is so good.

Now that I’ve done all that rambling, here are some direct answers:

What made us leave?  We never planned on it being long term, but what we earned was past enough money for the rest of our lives and we wanted a better quality of life.   Why not leave sooner? A combination of a bunch of money on the table and we hadn’t cracked the medical puzzle quite yet. I also didn’t feel comfortable changing jobs if I couldn’t give it my 100% because of other distractions going on in life.  Realistically I was burned out to the point I knew I couldn’t give another job 100% and once I got to experience the FIRE lifestyle, I was concerned I’d just be damaged goods with the taste of freedom. Nine months in and I might still be damaged goods to an employer.  I like slow mornings and people not telling me when/where I have to be. One appointment a day is enough for me.  

The thing I keep coming back to is I wish we would have moved for lifestyle earlier.  All the financial results turned out to be inevitable based on the foundation of job skills plus savings we formed.    

So what homework should I leave you to think about:

  • My initial recommendation is to put away another $150,000 from your current jobs in the big city.   That plus some earnings on your investments make a dramatic difference in net worth over your lifetime.  Look at the results of working in your current situation until 29 before leaving for a better lifestyle.   

The financial impact: Leaving today for a job to only cover expenses:

Leaving in two years:

  • This example only looks at what you contributed in your current role/location.   Moving to a more desirable) area comes with risks, potentially lower salaries for the two of you, an extended period of one partner not being employed, and a “paradise tax” when it comes to housing.   Assume you might lose a few months or even years of income before you get back to your current savings rate.  In a worst-case scenario, grinding out an additional two years is worth more than $450,000 in compounded returns by the time you reach 40.  That’s a lot of money
  • Dedicate an AirBNB style vacation or two each year to areas you think you’d like to move to.  The earlier you get familiar with an area, the easier the choice to move can be.  
  • Research what opportunities exist in your industry in smaller areas that meet your lifestyle criteria.   Figure out the answers to the following questions:
  •  Are they short on outside talent?  
  • What is your spouse’s employment opportunity if you make that choice?  
  • Are there a couple locations where you could win at both?  
  • What happens if you keep your current level of income, pay a marginally higher “paradise tax”, and still meet or nearly meet your savings goals?  
  • Are there cities that meet a compromise for you? (For me, I considered Austin, Tampa, and Nashville at different points in my career).   
  • We’re in one of the best job markets in my lifetime, there may be a great situation out there which will enable the move now without a financial impact.

Case Study Results:

The reader took a lot of this in and we exchanged subsequent messages.   Here is what they chose:

Since we last messaged, we’ve really been reflecting on what we’ve discussed previously. Neither of us are “driven” to be super high earners with prestigious titles. The salaries and roles mentioned above are honestly just inevitable in our fields with enough time of competent performance. Not to sound like I’m bragging but they just are. Moving companies will help shave a few years off getting to those levels.  To that end, once I finished grad school in early fall I started applying to companies with more desirable locations. The result was fantastic: I ended up accepting a job with a major employer in a coastal city for a 16% raise!  

It turns out that the specialty he was in is tied to manufacturing and exports and many of the large employers plus support employers have offices near the major port cities.  This opened him up to big city options like Los Angeles, Tampa, and Miami, as well as numerous mid-siize cities up and down the East Coast. I applaud them for taking advantage of this  opportunity:  Changing jobs, bringing outside skills into an employer, and pulling off a move to a location that is a better fit for their outdoor quality of life. This will be a nice compromise in their CoastFI plans.  They get to move to a city better suited for their lifestyle but move there with one person’s job guaranteed at a higher level than before. This will ensure they maintain a decent savings rate even if there’s a gap in employment or reduction in the other spouse’s income.  

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5 Replies to “Midpoint to FI Series #3: Geographic Gains”

  1. Love to see folks moving to a new city to try and optimize their income and quality of life. It’s so nice to live by the water and try new adventures. When I was in my 20s, I wanted to move all over the West Coast and never spend more than 4 years in once place. I got stuck in San Francisco, but I had a job where I traveled all over North America so that sort of quenched my wanderlust. I hope they keep us updated on these comments! $275,000 saved at 26/27 is incredible. So is living on $48,000 a year!

  2. I don’t necessarily agree that you have to live in a large city to have career opportunities. My little town of under 20,000 has two Fortune 500 corporations headquartered here and we are 100 miles from any city. In addition there are lots of other high paying jobs. I had high school education level hourly workers working for me here making six figures, and that was five years ago. Not to mention the engineers, accountants, chemists and sales people making six figures. And I wasn’t with the Fortune 500 corporations, I was with one of the half dozen chemical companies that have plants in the area. Plus we are close to outdoor recreation and here unlike the places you mentioned, you do not have to share your outdoors experiences. Most days, or even overnight hikes we take we do not usually see another person the entire time. We actually had to buy a satellite emergency beacon to carry with us because there are so few people hiking and climbing. Nightlife is lacking I’ll admit but that was never our thing. Fishing, hiking, tennis and running work just fine here. Oh and college tuition and fees are provided completely free for any kid that goes through the local school system, they can take the money to any school in the country. Provided by one of my competitors to help attract quality people to rural Arkansas. Commutes average about five minutes here during rush hour.

    1. Thanks for the long comment – It sounds like an incredible place you live in. I can only speak from my experience, but multiple smaller cities I’ve lived/worked in did not have those same type of opportunities.

      There were a few highly successful entrepreneurs, but it was difficult to grow income and experience as a W-2 employee

  3. I recently had a conversation at our local tap house with a women that made me think about our choices about where we live. We are in a mid-sized city that is 100s of miles from the closest top 30 city, we both actually went to high school here and moved back after college, never meant to stay but ultimately decided to stay and make a life here. The woman I was talking with kept asking if i ever thought about moving to LA or NY or getting my PhD and I kept thinking why?

    I’m over 40 (just a few years younger than this woman) and I have a life here: house, dogs, family, connections. We’re 30% to our FI goal and we just started aggressively saving a few years ago so should reach our goal in less than 5 years. Yes, this is a mid-sized city, we don’t have the same opportunities that we would have in a big city, can’t “make it” like we might there. BUT, I’m past that now.

    I don’t need to Be Best. I guess I missed my chance to live in the big city in my 20s and I definitely struggled to get a “good” job here until I was almost 30. Even now I could probably get paid more if we moved but I don’t want to start over. I don’t want to pay more for housing, we’re mortgage free with only $3k taxes/insurance per year.

    We’ve lucked out with my spouse landing a highly paid public safety job (but high stress and dangerous). We’re doing what we can to take that money, invest it until we can say “good enough”. We live in one of those places that people come to for outdoor recreation and although that’s not our priority it keeps the vibe of the area in that stereotypical west-coast laid back pace. I know this is a city that many people come to or back to when they’re done with the rat race so even though we didn’t leave I don’t regret where we are now.

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