[schmichael]

I'm in the US and a friend just moved to The Netherlands to accept a much lower paying job. He swears he has more disposable income due to cheaper health care, Internet, transportation (no car required!), etc. The basic assertion being that the cost of living is higher in the US.

I would love to see salary vs cost-of-living comparisons globally. I suspect this might account for the disparity, but I'm afraid I don't have the data to confirm or disprove this assertion.

Update: Spent 5 minutes googling with no luck. Found some moving company (?!) sponsored data showing most of the EU having a very high cost of living. Makes me wonder if that takes into account free-or-cheaper-than-US health care, child care, transportation (owning a car is $$$), education (most US tech workers are paying a high student debt "tax"), and other lifestyle/political differences between the two regions.

[fanpuns]

As an American living in Germany, I can vouch for this. My wife and I did a big calculation when we were thinking of moving back to the states. Basically we made three projections based on three different time frames/factors: (a) 1 year comparison (gross net income - tax only), (b) 1 year comparison (net income - all costs including taxes, fees, cost of living etc), and (c) 20 year estimate of point (b). For fun I tried to extend the tables out to a 'lifetime' value, but there are so many variables and assumptions that I don't think it's worth it for anything other than fun.

If you only look at salary - tax rate, the US is far and away better, but as soon as you start to factor in other things to get a real net income it goes to the German side pretty quickly. If you calculate out for 20 years (especially if you want to send kids to college) it's not even close. Moreover, we have a relatively high income and if you more in the middle or lower tax brackets, the values you get from services vs what you pay into the system would be even greater.

From what I see (commented here and elsewhere), many, many people do not have an accurate idea of what their actually paying and making over time. The easiest thing to compare is salary numbers, but it's also the most flawed because net income minus taxes is only the start of a real calculation not the end answer. You should also take into consideration the non-monetary things that come with living in each place as a more qualitative list (this will, of course, differ from person to person). As already mentioned vacation is lengthy and it's expected that it will be taken (and people really try not to bother you while you're away), lower anxiety due to less crime and a better social safety...

Slightly off topic, but I would highly encourage people to make projections like this for their households. It could be eye opening and I've found that is has a very positive benefit on long term goal planning and budgeting.

[acchow]

TBH, when making $250k+ as many engineers in top bay area companies are, "standard of living" costs don't really affect you that much anymore... They don't take into account the luxuries of the exorbitant lifestyle you can afford. And there aren't really any other cities in the world you could move to where you can still just be a programmer and afford the same lifestyle (and still have a lot of money saved up every month)

[closeparen]

As a $250k Bay Area household, you are not even starting to scratch the position of a $90k (i.e. $50k accountant + $40k teacher) household in a Midwestern metro, i.e. comfortably afford to own a 3-bedroom in a pleasant neighborhood with good public schools and a sub-30-minute commute to the central business district.

The rest of the standard-of-living costs (food, toiletries, etc.) would be vanishingly small, but housing would still be a big deal.

[dx034]

A $250k household in SV with children will have very significant costs of living. It won't be that hard to get a comparable lifestyle in Europe while your children are living at home. Once they're at university, most jobs in a country like Germany will give you a comparable standard of living (if you support them financially).

It's not the cost of groceries that count here, it's healthcare, education, housing and pensions that can easily consume $100-150k more per year than in a German town of comparable size.

[acchow]

Stop trying to own. Just rent.

[closeparen]

Look at the volatility (and especially the upward trend) in the last ~20 years of rents here. Renting is a fine strategy if you accept:

- That your stay here is temporary, you will be priced out within a few years, and any lease renewal could be the one that necessitates a cross-country move.

- That until you reach that breaking point, your "anything but housing" budget will decrease rapidly as rents rise much faster than wages.

It's a fun thing to do in your early twenties when your only worldly attachments are a backpack and a laptop, but people are not AWS spot instances. I do not intend for my eventual children to be scheduled onto communities preemptibly.

Owning is desirable because even if the payment is a stretch, it can get no worse, so barring catastrophe, your life is indefinitely sustainable. Renting in any volatile market is a bad idea if you're looking for a stable, long-term home rather than a short-lived adventure. Of course, there's nothing wrong with doing some adventuring while young and single.

[schmichael]

This is generally terrible advice in the US. The tax breaks for ownership (mortgage interest + property taxes) is huge, and it is likely - although far from guaranteed - that your real estate investment will become more valuable over time.

Rent - generally - never goes down, you have no tax breaks, and you have no asset.

There are many lifestyle reasons to rent but few financial (in the US).

[mywittyname]

This has been argued ad nauseam, but there absolutely are financial reasons to rent, especially in cheaper regions.

My yearly rent is twice what the property taxes alone would be on the condos across the street. I considered getting one of them, but after doing the numbers, it didn't make since. After interest, taxes, maintenance, and HOA fees, there's no way these people are coming out ahead until they've been there 10+ years.

It's all well-and-good that some of that is tax deductible, but the standard deduction on a couple is still more than taxes+interest on a 250k loan. So it really doesn't matter unless you have many more deductions.

Now go from the mid-west to a west coast boom city, and you'd be a fool not to buy.

[Daishiman]

Realistically it's not a terribly relevant point for most engineers, even on the Bay Area.

[davimack]

I've had friends move to the Netherlands & definitely they have more disposable income than I do. I've also worked in the UK (Scotland) where I made a hell of a lot less but where health care and prescription drugs were 100% free - that bit right there saved me 25K / year.

[rev_bird]

Is/was your friend an American citizen? I've been fascinated by emigrating to Europe for a long time and am always looking for stories about how people pull it off.

[RandomBookmarks]

This is rather easy for the typical HN crowd. For example, to get a working visa for Germany (Blue card) you "only" need to find a job that pays more than 50000 Euro/year. In a nutshell, that is all.

http://www.bamf.de/EN/Infothek/FragenAntworten/BlaueKarteEU/...

[rev_bird]

Had no idea about this, thank you for passing it along. This part is particularly interesting:

> Holders of an EU Blue Card can enter another Member State without a visa after 18 months and apply for the EU Blue Card of that Member State within a period of one month.

And it looks like Americans (at least for now...) can go to Germany before they're even approved:

> Exceptions apply to nationals of Australia, Canada, Israel, Japan, the Republic of Korea, New Zealand and the United States of America. They can enter Germany on a visa-free basis and can apply to the competent immigration authority in Germany for their future place of residence for an EU Blue Card within three months of entering Germany.

[brightsize]

Same here. This might be one route to consider: https://en.wikipedia.org/wiki/DAFT

[rev_bird]

Thanks for this. I'm sure it's not quite as scary as it sounds, but the only thing I can think of that's more challenging than "start a business" is "start a business in a new country where you don't know the language." The "friendship treaty" seems like a great idea, but right now I'm not a very good friend.

[cr1895]

I have friends who've moved to the NL via DAFT. You'd probably do well to hire an accountant who can deal with the tax authorities (who are the only branch of gov't that will not speak English to you), but the business doesn't necessarily need to cater only to Dutch speakers.

And while it's nice to learn the language and all, the NL has among the highest English competency in Europe. It's rather difficult to learn Dutch because English is so useful and prevalent.

[cr1895]

I'll link you to a comment I made a few days ago about moving to the NL:

https://news.ycombinator.com/reply?id=13522661

[rev_bird]

Thank you; missed this the first time around. Suddenly really interested in learning Dutch...

[schmichael]

Originally English/Dutch, so that simplified moving.

[pmontra]

You could ask him where he was able to save more money by the end of the year. Maybe don't count the expenses for relocating to the Netherlands.

[schmichael]

We talk about this sort of thing regularly, but it's still just anecdotal. HN demands/deserves hard data. :)