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January 29, 2008


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If we consider a good education one of the best investments, then there may be plenty of good reasons to send your kid to a private school.

Agreed with cyphyn. If you get a good degree in a right field, you may be able to save over 25% of your salary and still afford the Caribbean vacation.
"Spend less than you earn" is a good generic advice. Some people need to give up Caribbean vacations, others can afford both trips to Europe and the Caribbean, and still save (as long as they fly coach and look for good deals). Granted the latter are in the minority, but if you get a good degree and buy a home below what you can afford, you just may be among them. It really is a matter of priorities. If you can afford $2000 a month mortgage, but buy a place with $1000 a month mortgage instead, then you can easily spend a $1000 for Caribbean vacation and still have $11000 left.

I always take exception to "live in a low-cost area" suggestion. If your profession is such that you can only get a job in a high-cost area, then you wouldn't save by living in a low-cost town and be unemployed. If you can get a boring job in a low-cost area and an interesting job in a high-cost area, should you get a boring job and count years to retirement?

I really can attest to the power of living in a low cost area. I live in a mid-size city (150-250k population) in the Southeast and the cost of living is wonderful (18% below the national average). The median house price is $187k and the median income of ~$64k provides quality of life equal to $161k in San Francisco. I bought a brand new 2000 sq ft home with tons of "upgrades" for two times my salary. The unemployment rate is half the national average and in the last few years there has been strong growth in jobs, population, and home prices (yes, local home values went up 1.56% in 2007). I have lived in 7 different states and my family is from Chicago. I never would have picked to live down here if work had not brought me here, but now I love it and would never move back up to the expensive North. If there is something I want to do in NYC or San Francisco I'll visit for a week, but I will never live there even for twice the salary.

Hey Adfecto, what city are you in now?

My family and I live in Chicago now and wouldn't mind leaving some day!!!

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