Debunking The Cost of Living Myth

Oh hello it's Kyle talking about the myth of cost of living and relation to geography is something we'll hear talks a lot about in the news media you'll hear political pundits talking about this kind of stuff saying that place X is really expensive and people are being priced out and they're moving to place why because it's a lot cheaper a lot easy to make a living there so in this video I'm going to take an in-depth dirty geographical look from an objective standpoint to see if there really is any truth to some of the stuff you're hearing on this issue on the news media and from the political pundits I'm originally from California and all my family still lives there and California is somewhere that supposedly is a very high cost of living I now live in Tennessee I've been here for about 10 years now and Tennessee is somewhere that supposedly has a very low cost of living so you take that I've lived in a couple of very different parts of the country and you combine that with the fact that that's been studying the u.s. my entire life I just love learning and much as I possibly can about the country and I don't know I'd call myself a reputable source of information on this kind of stuff and I'm not trying to push up political agenda this isn't you a red state versus a blue state kind of thing this isn't you know political propaganda but I want to take a more in-depth look at this issue because there's a lot more to it than what you'll hear in the news media where this issue originates is the fact that housing and rent prices are much higher in California Seattle New York and other parts of the country that have the high cost of living and housing and rent prices are much cheaper in the southeast and the Midwest needs places that have the low cost of living and you'll hear people talk about stats like how much you have to work before you can afford median rent to your median mortgage payment kind of thing and look at these places along the west coast and the Northeast I have to work a whole lot more just to afford my rent and look at the southeast and the Midwest I don't have to work as much to afford rent kind of thing and then you'll hear people talking about income taxes and the places with the high housing costs tend to be the places with the really high income taxes as well and wow that's a double burden on people that's a you know high rent prices and high income taxes and look at the southeast in the Midwest well it's low taxes and low housing costs it must be a much cheaper to live there and I always find it very interesting income taxes and housing costs the only two things people really consider when trying to determine the cost of living of a certain place but there's so much more to your cost of living than just your income taxes and your housing cost so let's get a little more in depth with this if the only things that affected your cost of living where your housing costs and your income taxes then the southeast would be the wealthiest part of the country is that true well of course that's not true in fact it's the exact opposite the southeast is the poorest part of the country and no matter which indicators you look at to examine the geography of poverty in the u.s. it's pretty clear to the southeast is the poorest part of the country it's the place with the high percentage of the population living in poverty the highest percentage of the population receiving government assistance through the welfare or food stamps and if it was so much cheaper to live in the southeast and why are there so many more people living in poverty and receiving government aid and if it's so much more expensive along the West Coast and the Northeast and then why are there so few er people living on government aid or living in poverty and the answer is pretty obvious it's of course wages wages are a lot higher along the west coast and the Northeast where the cost of housing is a lot higher and wages are significantly lower in the southeast where the cost of housing is lower and you know you're $800 a month rent payment isn't cheap if you're making $8 an hour and you're $1,300 a month mortgage payment isn't cheap if you're making $30,000 a year so it all pretty much evens out in the end and besides housing isn't the only thing you have monthly expenses for there are a lot of other things you're spending money on so let's take a look at what else affects your cost of living for a lot of people a big expense as their car payment their monthly car payment represents a big chunk of their monthly budget and say you buy a brand-new twenty five thousand dollar car and Tennessee will how much of that car cost in New York twenty-five thousand dollars cars cost to say no matter where you go but if you have a $300 a month car payment and you're making $3,000 a month that's a much bigger hit relative to your salary than if you make $5,000 a month so your car payment is going to be pretty much the same no matter where you live you think about say groceries groceries are really expensive really matter where you live groceries are going to pretty much cost the same and actually in all the times it's groceries you're cheaper in California because so much of your food comes from there doesn't have to be shipped across the country but anyway groceries are pretty much the same no matter where you go I think about some of your other expenses your utility bill and your utility bill isn't isn't dependent at all on whether you live somewhere with high or low housing costs has much more to do with your climate so you know when you live in California you don't have to run the air conditioning or the heat is Mother I was living in Monterey my house didn't have air conditioning or heat and I didn't need either one of them my monthly electric bill is next to nothing and in Tennessee we run our air conditioning non-stop from May through October the heater comes on in November it's pretty much non-stop for November to March and our monthly electric bills are really expensive so your electric bills have a lot more to do with the climate you live in and whether or not you have high housing costs and look at some of your other expenses your phone bill your internet provider or say you have cable or satellite all those kind of things cost the same no matter where you live and so if you live and say a place with high housing costs your rent or your mortgage payment is going to be a really huge your percentage of your monthly salary but everything else is going to be a lower hit to you relative to how much you're making as opposed to say the southeast where you know your rent or your mortgage payment might be a smaller part of your monthly budget but everything else is more expensive relative to your wages so there's a lot more you spend money on than just your housing costs you can't just look at your housing cost as a way to indicate whether or not you live somewhere for the high cost of living all right so now let's talk about taxes and I'm not sure why but whenever people talk about tax they only ever refer to income taxes as if that's the only tax you pay but with me being from California get to state that has really high income tax you're gonna pay a big chunk of your income in taxes and I now live in Tennessee a state with no income tax so are we a lot better off living in Tennessee from a tax perspective well Tennessee has the highest sales tax in the country it's almost nine and a half percent and in fact the states with the highest sales taxes are the states that people would say are low tax days so Tennessee Arkansas Louisiana and Alabama have the highest sales taxes in the country interesting way to look at it is that you know we live just a stone's throw away from the Georgia border and Georgia has an income tax and a lower sales tax in Tennessee so think about all the things you buy each year all the money you spend on things you know you're paying a little bit more for things if you live in Tennessee then you live in Georgia and throughout the course the air this really all adds up to the point where it's about the same so whether you live in Tennessee or Georgia your tax burdens the saying just are getting it from a different way well what about Texas Texas is a supposedly low tax state - they have no income tax well Texas has just about the highest property taxes in the country when I was driving across Texas I would see billboards advertising property tax levels Mike what property tax no that's crazy because you know I grew up in supposedly high tax California that has some of the lowest property taxes in the country so you know I lived in South Carolina for a few years they have the most ridiculously high car taxes in the country I mean car taxes are a burden for people that live in South Carolina and so the analogy I use low you can go to Vegas you can play crap you're gonna play the slides you can play a blackjack it doesn't matter the house is gonna win you know you can live in a state with high income tax high property tax highest sales tax it doesn't matter the man's gonna win of course they're gonna be individual exceptions to this you can look specifically at San Francisco and Manhattan these are both incredibly expensive places to live but they kind of have to be because they're both surrounded by water on three sides and surrounded by suburbs or the Bronx on the fourth side and you know they're both actually pretty small so there's much more of a crazy supply and demand thing going on there and you can also look at Hawaii it's really expensive there but again it kind of has to be because can you imagine if it were cheap to live in Hawaii I mean everybody would live there but it doesn't really matter the whole theme is it it all comes off as a wash so you can live somewhere with high expenses but the wages are going to be higher you can live somewhere with low expenses but the wages are going to be lower so it pretty much all evens out in the end so what's the theme is it expensive to live in California Seattle Boston New York DC hell yeah it is expensive to live there it is expensive to live in Texas Tennessee South Carolina Hellyeah is expensive to live there how you're paying yet the ratio of what you're spending on is going to be different but it's pretty much gonna be expensive no matter where you live and I think a lot of people that live in these places that have high housing costs somehow think the grass is greener and sell these places with a lower housing cost but it really isn't when you factor in the wages so the bottom line is it's expensive to live no matter where you are in the US the sad reality is that that's becoming more and more difficult for middle-class families to make it regardless of geography wages aren't keeping up with inflation and things are becoming more expensive the number of people that are middle-class keeps going down and the number of people living in poverty keeps going up and you know how do you fix that well I don't know that's up for the politicians to deal with but that has a situation we're you know facing right now in the US but I do find that very interesting that a lot of people are packing up their entire families and moving to different parts of the country in search of a higher standard of living to get away from high housing costs but you like I've discussed in this video that's really not going to be the case because you know your wages are going to be lower you know if you're getting a big promotion to move across country that's a lot different because you know if your wages are the same will be to a place with a lower housing cost and yes there's ten of the living will go up but if you're willing to accept a lower ways for lower housing cost thinking your standard of living is going to go up well that's just not going to be the case because again it's not like people in the south or in the Midwest have a bunch of extra cash to play around with because you're living somewhere with low housing cost it really doesn't matter it really all comes off as a wasp regardless of whether you're living summer with high housing costs or low housing costs as you might be able to tell from this video I think there's a huge benefit of living somewhere with a high housing costs and high wages and there are a couple of reasons for that the first that a dollar is a dollar wherever you go in the country one US dollar has the same exchange rate wherever you go in the world regardless of whether you're coming from somewhere with high cost of housing or low cost of housing so you know people that live in the higher wage areas just have more of those dollars and but the much bigger reason why I think it's better to live somewhere that has expensive housing and higher wages that say you live and say you know DC or Boston or somewhere with high housing costs and you buy a house at age 30 you get a 30-year mortgage is paid off the time your age 60 you can sell that house for say you know $600,000 and then you can move to a place like Tennessee or South Carolina you can buy a house for $200,000 put the rest of that money in the bank and you can retire several years earlier and you can't put a price on retiring several years earlier and also you'll be collecting Social Security benefits based on the wages you made in that higher wage area but now you're living somewhere with lower housing cost so it just I believe it's a win-win to be coming from somewhere with you know high housing costs and higher wage that's because a dollar is a dollar and people that live in the higher weights places just have more of those dollars I hope you liked this video if you did please give me a thumbs up to let me know it was okay and if you're interested in this kind of stuff check out my other videos I'm posting stuff about geography and some US travel stuff I'll just have about road-tripping in the US so if you're interested subscribe to my channel but yeah thanks for watching do y'all give me Kings hunting out and about to go buy something at paid nine and a half percent sales tax on it you

Channel: Geography King

Views: 239,341

Keywords: debunking cost of living myth, cost of living, wages, taxes, expensive, cheap, u.s., geography, geography king

Id: gLFK89TmksI

Length: 12min 24sec (744 seconds)

Published: Wed Nov 01 2017