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Moving to California offers significant financial advantages through higher wages and geoarbitrage, coupled with unique career opportunities, a higher quality of life, and a community aligned with entrepreneurial values, making it a strategic choice for those planning to move abroad or build wealth.
The video explores the strategic decision to move back to California, focusing on financial and lifestyle advantages for young men planning future international living. The primary driver is geoarbitrage, where earning higher wages in expensive areas like California allows for a greater difference between income and expenses, especially when compared to lower-wage regions like the southern US. This financial strategy is contrasted with the limited earning potential for locals in some areas, highlighting how business owners or those with remote high-paying jobs can thrive.
Beyond financial gains, California offers unique career opportunities due to its large economy, particularly in sectors like technology and healthcare. The presence of major companies and a dynamic job market allows for career advancement and job security that may not be available elsewhere. Furthermore, the state provides stronger worker protections, as evidenced by better severance packages and unemployment benefits. The video also touches on the entrepreneurial spirit and shared values found in California, where discussions about investing and wealth-building are common, fostering a supportive environment for ambitious individuals.
The quality of life in California is presented as a significant advantage, with a more favorable climate for outdoor activities, a wider variety of healthy food options, and access to diverse communities, including Asian-American populations. This improved lifestyle contributes to overall well-being and can accelerate personal goals, such as weight loss or preparing for international travel. While acknowledging that California may not be the right choice for everyone, the video advocates for making location-based decisions that align with personal values and financial objectives, rather than solely political considerations.
Moving back to California for money is strategic due to higher wages and the potential for geoarbitrage, allowing you to earn more and save significantly. The state's large economy offers unique career opportunities, especially in tech and healthcare, which can accelerate wealth building.
Geoarbitrage in California involves earning income in high-wage areas and spending it in lower-cost regions, or investing the difference. This strategy maximizes your savings and investment potential, especially when compared to living in lower-wage states.
California boasts a dynamic job market with unique opportunities in sectors like technology and healthcare, offering significant career growth potential. The state also provides stronger worker protections, including better severance and unemployment benefits.
Yes, California fosters an entrepreneurial and investor-minded community, ideal for wealth building discussions and strategies. This environment, combined with quality of life factors, supports ambitious individuals aiming for financial success.
California offers a high quality of life with a favorable climate for outdoor activities, diverse healthy food options, and access to various communities. These lifestyle advantages contribute to overall well-being and can help accelerate personal and financial goals.
Geoarbitrage involves earning income in a high-wage area like California and then spending that money in a lower-cost region. This strategy allows for a larger difference between your income and expenses. Alternatively, the difference can be invested in assets for wealth building.
While California is often perceived as having high taxes, other states have their own ways of collecting revenue. For example, Florida has high property insurance costs, and Texas has significant property taxes. California's higher wages and economic opportunities can offset these costs for some individuals.
To save money in expensive areas, focus on keeping expenses low. This can include living frugally, cooking meals at home, and minimizing non-essential spending. Some people also choose to forgo car ownership and rely on public transportation or biking.
Yes, working in a high-wage state for your career can lead to higher Social Security benefits. Your benefits are based on your earnings history, so a longer career in a higher-paying state can maximize your retirement income.
California offers significant career advantages due to its large economy, particularly in sectors like technology and healthcare. The state has a dynamic job market with many major companies, providing ample opportunities for career advancement and job security.
0:02 Hey YouTube, Alex here and in today's video I want to talk about why did I move back to California? I got some questions like, "Oh, you like to go to the Philippines or Thailand, which are more socially conservative countries, and yet you're in Colorado or you're in California, which are liberal states?" And this video is not a political video, but I thought I'd discuss this idea or this topic in relation to expat life or becoming an expat.
0:32 This video is more directed at young guys who are trying to figure out a financial plan that maybe today they're not ready to move abroad, but maybe they make like a 10-year plan or 5-year plan, whatever their plan looks like. They want to spend some time overseas. They've been watching videos about it, they're curious about it. Maybe they've visited and they want to formulate it.
0:55 So, let's go ahead and get into it. Uh, why did I move back to California? Well, the first reason is geoarbitrage. So, I'm originally from the southern US, and the fact of the matter is the southern US has the lowest wages in the United States. The wages are not high, and yet the cost of living has gone up dramatically in the last 5 or 10 years. It's not cheap.
1:18 A lot of people say, "Oh, it's so cheap." It's moderately cheaper if you are coming with, say, a pension from New York or Pennsylvania. Um, California, for example, maybe you made a lot of money in one of the more expensive states, but that doesn't translate in many cases to higher pay for the southern locals. Now, if you're a business owner or you own land or real estate in the south, yeah, you've done very well. If you're not one of those people, it hasn't really made a meaningful impact on you.
1:50 The guys that I know that have done well in the south fall into one of a few categories. One, they're a business owner. Two, they work for a company based in like New York City or some other big city, so they're not tied to local wages. Or three, they've inherited or are set to inherit substantial assets. So, uh, not the guy I I'm trying to think if there's any. I think maybe I have one friend out of all the friends who's actually worked his way up just through hard work and effort to making a decent wage.
2:24 And even then, his role would pay more in other places. And so, some people would say, well, yeah, but it's so expensive in California. When I left uh Tennessee for the first time to move to California, I was making $15 an hour. And in California, my offer worked out to like total compensation $60 an hour. So living in California, it doesn't cost me four times as much money even in the expensive cities to live as it did in Tennessee.
2:54 I have some additional expenses. Certainly, some things are more expensive, like taxes, but I don't just, oh, my landlord's like, "Oh, you know what? It costs you $1,500 a month in Nashville to rent an apartment. We're going to charge you six grand a month." There's alternatives, right? There's alternative options in California. A number of my friends in California have either roommates or they live in studio apartments that have a low footprint. Um, they may not use as much in the way of certain utilities in California. Uh, and yet their income is a lot higher.
3:28 So for me, I started to review jobs and I'm like, "Wow." Like California, they have really high pay for most jobs, much higher than elsewhere in the country. I'd say retail is an exception. Like if it's not really worth it to move out to California if you're just going to be uh working in retail, unless maybe you have family you stay with for free, something like that. But if you're in any kind of higher value ad field, like you're a tradesperson or uh you're like in technology, which is what brought me out here originally, you're in healthcare.
3:58 What I would ask of you, if you don't believe me, is to look up your job and Google what is the median income for living out there. Now, some people will say you, they'll shift it. Well, you can't buy a house. Well, some people don't prioritize home ownership. Um, and some people also find when they actually do the math, if I invest the difference, right? If I stay a renter, but I invest the difference in high-quality stocks, maybe I buy real estate in another state.
4:26 Like, that's a dirty secret. Um, a lot of people who are owning are buying real estate in Tennessee don't actually live in Tennessee. They don't care about the people in Tennessee. They're just there because there's an opportunity, a geoarbitrage opportunity. Like, "Oh, can't buy a house in California, but when I retire in 10, 20 years, I can have this house paid off in Tennessee and live a more materially wealthy lifestyle." So, I want to be making my money in the most expensive places to live where there's a higher delta, there's a higher difference between what I make and what I spend, and then I want to spend it in the much lower cost of living areas.
5:03 I know some people will complain about, "Oh, you're rising the prices." Everybody's looking for an advantage. There's very few people out there. I don't want any advantages. And even if you don't want to try to take advantage of these geoarbitrage opportunities, other people are still going to do it. Other people aren't going to, "Oh, I feel so bad. Uh, I need to just not make very much money." And uh, that's just going to be the way it is. Actually, that's not the case at all.
5:26 You see a lot of people in uh certain countries where the wages are not that great. They prefer to move to a country with higher wages. This is very common with healthcare professionals from the Philippines. They see what they can make in the Philippines. They see what they can make in the United States. It's a no-brainer. They don't sit there, "Oh, the United States is so much more expensive than the Philippines." No, it's like, I'm clearly coming out ahead. Even if I pay more for rent, transportation, food, taxes, whatever it may be, I'm still getting ahead.
6:01 And so for me, it was a no-brainer. Uh, you know, I had people telling me, swearing up and down, "Don't move to California. It's going to go so bad." Ultimately, when I got laid off after a year, I got four and a half month severance. I got uh accelerated stock options, and I would have qualified for decent unemployment had I stayed in the country. Well, when I came back and I was like, "Well, yeah, I got like, you know, enough money to live in Southeast Asia for a while. I went back to Tennessee just to leave my car in Tennessee."
6:30 "Oh, you never would have gotten that in Tennessee." Well, yeah, exactly. That's why I took that part of why I took that job in California is they have stronger worker protections. This idea that everybody in Tennessee can be a successful business owner or any southern state, really any state for that matter, is ludicrous. Not everybody's meant to be a business owner. And for me, doing the math, I actually come out way ahead in California.
6:55 I'm able to save much more, save and invest much more meaningful amounts of money and put it toward my financial goals. This isn't to say it's going to be the same for you, right? If you are a family of four, you may find that depending on where you're trying to go in California, it doesn't work out. You may find that the taxes are too high for your situation.
7:16 I'm not judging you. Like, I think you should do what's best for you, but also this hyper-politicized, "I'm going to make decisions based on local politics" is for me not a priority. For you, maybe it's a priority. For me, it's not a priority.
7:32 Um, the next thing is unique opportunities. So point number two would be that in California you have unique opportunities. So California, fourth largest economy in the world if you pretend it's a country. So what that means is that there are a lot of unique jobs here throughout the state of California. There's jobs that exist here that don't exist in other states.
7:56 And they have more opportunity to move up due to just size of organizations or businesses that don't exist in other states. So tech was an example of this. Tech is not in a good place right now. I'll be the first to admit it. But if you're in the tech industry and you're in, um, Witchah, Kansas, no shade to anybody in Witchah, maybe there's like one or two. I don't know any tech companies in Witchah.
8:20 Maybe there's one or two, but you're going to top out relatively quickly and there's just a lower ceiling there where if you're in Bay Area tech, for a while there, people were switching jobs every like two or three years to get a substantial increase in pay and responsibilities. And that would not be possible in many other cities.
8:39 It's not that, "Oh, I'll just quit my Bay Area tech job and go join a startup in uh Jackson, Mississippi." Like, once again, no shade to Jackson. These are extreme examples. I know most people aren't choosing between San Francisco and Mississippi. Uh, but the point still stands. If you're looking to have longevity in your career, you want to join a company or an industry or an organization that's big enough. You've got to be in a high population area.
9:12 You've got to be in a place where there's enough opportunity to move around, to shift around to like, oh, okay. Um, if I'm living like in a small town and I lose my job, odds are I'm going to have to leave that small town to find a new job. Where if I'm in a bigger city, if I'm in a higher population density area, let's just take the Bay Area because I lived there for a couple years, I can go try to find another job in my immediate area. I maybe I have to move an hour away, 30 minutes away. I'm not having to necessarily move cross country if I can find another opportunity.
9:50 I know it doesn't work out for everybody. I know what it's like to have to leave after getting laid off, but still, uh, there's these unique opportunities that exist depending on your industry that don't.
10:01 Depending on your industry, there are opportunities that don't exist elsewhere. There's nothing like it. And now with the return to office mandates, some of these people that hate California, oh, you got to go back to the office. Well, that actually doesn't really help the states that don't have the tech jobs. If people have to go back to the office, they're moving back to California, Massachusetts, or New York, and they're paying taxes in those areas. They're supporting businesses in those areas. How is that a victory for Alabama or Wisconsin if people working high-paid jobs have to return to those centers of industry?
10:53 The next point is being entrepreneurial and investor-minded with shared values. One of the things I struggled with back in my home state is that whenever I bring up investing or learning how to deploy capital efficiently, people say investing is gambling. Investing is not gambling; the difference is that if you have an investment that goes wrong, you still own an underlying asset. If you gamble and it goes wrong, you've got nothing to show for it.
11:36 So in Tennessee, I would try to bring it up because for me, it's something I have a lot of curiosity about. My interest is how do I build wealth to support my life overseas? It's not free to live overseas. It could be economical, but it's not free, and you've got to build up assets to pay you while you're there. If you're not open to doing that faster than getting to traditional retirement age, you're going to have to own real estate, stocks, crypto, or whatever different thing you're looking at.
12:14 I noticed among my friends in California, they're always happy to discuss investments. I can approach them and say, "Hey man, I know you bought a house in Texas a couple years ago. How's that investment working out for you?" Or, "Hey man, I noticed you're working at this company. What do you think about the state of the industry?" Not to get them to divulge information they're not supposed to, but rather to get insight that the common person doesn't have.
12:56 You know more about this subject, like engineering for example, than I do. What are your thoughts about that? Back home, it's like, "I don't want to talk about it, man." It's this combination of the economy making a lot of Californians and New Yorkers wealthy in the last 10 to 20 years. If you didn't jump on that train, if you were in a state that wasn't involved in the tech boom, you kind of just had to wait from the sidelines. Maybe there's some level of embarrassment there, like, "I don't want to know what I missed out on."
13:33 But for me, I want to be around those people that are starting businesses. A lot of people say California, "Oh, all the businesses are leaving." That's not the case. If you look at the AI boom, that's happening in the Bay Area, California. That's not happening in Albuquerque, New Mexico. No offense to people in Albuquerque; I think it's a fine city. But if you're thinking about how to improve your life, how to get better financially, you have to think about these things.
14:21 Is it for everybody? No. But these are the things that are working out for me. Entrepreneurial, shared values, business-minded, how can we improve our material circumstances? All these are true for the people that I know in California. Alongside that, a lot of people that I grew up with that are ambitious moved out to California. So it was very common for my social circle: if you're ambitious, you're moving out to California. If you have ambitions to work in film and television, tech, finance, these high-value industries, I didn't notice too many healthcare professionals.
15:00 But now that I've been researching healthcare opportunities, it's like, wow, they get paid not that much where I'm from, but in California, they actually make a lot of money. So, yeah, a lot of ambitious people from where I'm from moved out to California. And that's a sign to me that there's a lot of value to be had out here for me personally.
15:27 The next point is high quality of life. Where I'm from, it's very hot in the summer and very cold in the winter. It's humid. When I got back from Asia, I basically stayed inside for three months because there are bugs, and you're constantly getting bit by mosquitoes. It's just not very good. You go to the grocery store, and most everything is trucked in from out of state. There's this mistaken belief that Tennessee has farms everywhere, but those farms produce soybeans, cotton, and corn for industrial purposes, not for eating.
16:12 So most of the produce is basically trucked in or flown in, mostly trucked in from other places that produce food. You're not getting, in many cases, a wide variety of salad greens or different kinds of healthy foods. It's not to say the food is bad; actually, the food is pretty tasty. But for me, as I get older, I become more health-conscious. I'm more worried about my sodium intake, my sugar intake. When I go to the grocery store in Tennessee, they just don't have the same options as they do in California for interesting kinds of keto or low-carb options.
16:57 You don't have near as many salad options as you have in California. California has all kinds of different healthy food options, not just fads, but also things that are formulated because it's more of a cutting-edge mindset kind of place where people are more open to trying these different kinds of health options. Another thing is if I want to go out for exercise, out here in California, it's dry. The weather is dry, it's sunny most of the time, and it's a comfortable temperature.
17:31 Even in the hotter parts of California, away from the coast, like San Bernardino, even if it's hot in the middle of the day, in the morning or the evening, it's a comfortable temperature. You can go out and exercise. Where I noticed, a lot of people won't believe this, I felt that Tennessee is hotter than the Philippines. You get discouraged; you're getting bitten by bugs. It's nice here; I like that I can go out and exercise any time. I can feel myself starting to make progress on losing weight because I get out more and spend more time in the sun.
18:28 The weather's beautiful here. I have healthier options. I am in a better mood because it's not overcast and raining all the time. Aside from that, there are so many different reasons why California offers a high quality of life. So while I'm working toward moving overseas, I get to still enjoy a good quality of life now rather than just suffering for the next 30 years and being miserable.
18:55 It's like, no, I can enjoy today as well. I can enjoy my day-to-day life here and do a lot of things that will keep me present and focused on the target. I can still break away; if I want to fly to Asia, I'm not that far from a major airport where I can get on a plane and 12 hours later be in any number of Asian capital cities. That's just not possible where I'm from; I'm having to fly to California or New York and make it to LAX, SFO, maybe Seattle airport, only to then take another flight, adding a layover and complexity.
19:39 The final thing is the fifth and final point. I love California. I don't believe in getting overly political when it comes to making certain kinds of decisions. I'm politically homeless. I will never tell you I'm on the left or on the right. I look at things outside of my control and try to focus on what's within my control. I try to focus on the things that I can make a meaningful impact on, like working hard, choosing good topics to make videos, or moving for work.
20:16 There are a lot of things that I have control over, and those are more meaningful. So for me, if I could choose a location that is more in line with my values, I earn more money and I'm able to accelerate my process to move overseas or get away more easily if I'm not quite ready to move overseas. These are all opportunities that are great. Plus, if I want to be around Asian-American communities, like the Bay Area has a big Filipino community, right? So if I don't have the time or the money to go to the Philippines for a couple weeks, I could still go to a Filipino grocery store, a Filipino restaurant, or hang out with Filipino people.
20:57 And it's not the same as being in the Philippines, but there's some level of advantage there. And that's not the same in many other parts of the country. This video is not to poo poo on wherever you live. Everybody has to pick where they want to live.
21:16 I think where you live is the most important decision you'll make in your life. And I have experience that has indicated to me that that is the case. If you disagree, if you hate California, let me know down in the comments. Ain't going to offend me.
21:32 It may not be a good solution for you. It's been a good solution for me. Give us a thumbs up if you enjoy this video. You want to see more content like it. And finally, subscribe to this channel to keep up to date with my travels and my experiences and how I'm moving forward on my goals.
21:49 So, thanks so much. We'll see you soon. Bye-bye, everybody.
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