If you want a greater chance of building more wealth than the average person, live in one of the most expensive cities in the world. These cities are expensive for a reason. They contain the most valuable companies, the richest people, the most capital, and the best universities on the planet.
Yes, the competition is cutthroat. But you dramatically increase your luck surface area thanks to the sheer number of opportunities. And if you can't compete professionally, you can always try to marry someone who is winning. I'm only half joking. Assortative mating is one of the biggest wealth-building forces nobody wants to talk about.
Think of it this way. Living in an expensive city is playing OFFENSE. Your income and equity upside are theoretically unlimited. Living in a cheap city is playing DEFENSE. You can only cut costs so much before you're eating rice and beans in a paid-off house wondering what happened to your 30s. Nobody ever got rich on defense alone. You need offense to score.
After 10 years of grinding it out professionally (and romantically), you can rest easy knowing you gave it your best shot. If you strike it rich, you'll have an endless number of relocation options without feeling constrained. Or you can simply keep living in your expensive city without much financial concern.
If you don't strike it rich, there are plenty of wonderful, more affordable cities waiting for you. The optionality only flows one direction, though. It's much easier to downshift from San Francisco to Des Moines than the reverse.
When you're on your path to financial independence, go where the action is. Get your foot in the door in any reasonable capacity, build a network, and let serendipity do its thing. As many remote workers have discovered, out of sight really does mean out of mind, and out of mind means lost opportunities.
High Home Prices Are A Positive Signal, Not A Knock
The typical three-bedroom, two-bathroom, ~1,800 square foot home in San Francisco costs about $2.2 million. A family of four needs to earn at least $400,000 a year, after putting 20% down, to feel somewhat comfortable affording one. This assumes no parental help, which roughly 40% of first-time homebuyers now receive.
Some think the median price is outrageous. But consider this: if you joined a company like Google in early 2023, your stock is up almost 4X since then. Meanwhile, the median San Francisco home price rose about 30% over the same period, from $1.7 million to $2.2 million. In other words, for the well-positioned local worker, housing actually got MORE affordable, not less.
Instead of viewing high home prices as a negative cost-of-living signal, view them as a signal of how much financial opportunity exists in the area. Home prices are largely driven by the incomes and wealth of the people living there. These homes are expensive precisely because enough residents earn enough to pay for them. If they didn't, prices would fall.
Income Opportunities Are Higher In Expensive Cities
Total compensation packages for 23-year-old college graduates in big tech run between $150,000 and $200,000. Ten years later, these folks are easily earning over $350,000. One of my tenants joined a leading AI in 2025 and has seen his equity package 5X in just one year. For him and his partner, the $10,000 a month they pay in rent for a five-bedroom, four-bathroom house is easily affordable.
So paradoxically, you should get excited about high home prices and buy one yourself, because wealth is sticky and attracts more wealth. Unless the geography or weather is terrible, or the government is corrupt, expensive cities tend to keep getting more expensive.
Sure, you might one day get so wealthy the government tries to impose a special tax on you. Congratulations. At that point you can afford anything the government throws your way. Or, you can easily relocate anywhere and live like royalty.
The World's Best Entertainment Comes To You
Here's the part of the expensive-city bargain that frugal people, especially FIRE folks like me, consistently undervalue: the entertainment.
When Team USA played Bosnia and Herzegovina at Levi's Stadium on July 1 in a win-or-go-home World Cup knockout match, I was 2,400 miles away in Honolulu, having left San Francisco the day before. A single-elimination World Cup match, 30 miles from my house, and I missed it.
To make myself feel better, I told myself I wasn't willing to pay $1,500 to $2,000 per ticket for middling seats. I certainly wasn't willing to pay $6,000 to $8,000 for my family of four.
But while lounging on the beach in Kahala, for free, the truth crept in: I would have gone. I should have gone. The USA won 2-0 and earned its first World Cup knockout-stage victory since 2002, in my backyard, and I watched the highlights on my phone like most in America.
FIRE Can Prohibit You From Spending
Here's the flawed FIRE logic I fell for: why pay thousands to attend when you can watch it on TV for free? Because ANYBODY can watch it on TV for free. The guy in the middle of nowhere who moved there to save money watches the same broadcast I do. The entire point of paying a premium to live in a world-class city is that the world's greatest events come to YOU. If you never attend them, you're paying the expensive-city cover charge and then refusing to enter the club.
Think about the visiting fans. Levi's Stadium holds about 70,000 people for these matches. Tens of thousands of them paid for flights, hotels, meals, ground transportation, AND tickets. If a fan from Bosnia can justify $10,000 all-in, surely I could justify an Uber ride and a ticket. Of course I could.
When world-class entertainment comes to your expensive city, you go. It's the dividend you're owed for paying more for housing, energy, education, and taxes than almost anyone else on Earth. Skipping the events is like owning a dividend stock and refusing to cash the checks.
Entertainment Examples Of What The Bay Area Alone Has Hosted
Don't take my word for it. Here's a sampling of the world-class events that have come to the San Francisco Bay Area, all within a roughly 55-minute drive of my house. Try replicating this list in a low-cost-of-living paradise.
| Event | When | What Happened |
|---|---|---|
| Ryder Cup (golf) | September 2033 (upcoming) | The Olympic Club hosts golf's greatest team event, with the 2028 PGA Championship coming there first as a warm-up act |
| FIFA World Cup 2026 | June–July 2026 | Six matches at Levi's Stadium, capped by USA 2, Bosnia-Herzegovina 0 on July 1, America's first knockout-round win since 2002 |
| Super Bowl LX | February 8, 2026 | Seahawks 29, Patriots 13 at Levi's Stadium, with Bad Bunny headlining halftime |
| Laver Cup (tennis) | September 2025 | Team World beat Team Europe 15-9 at Chase Center, with Taylor Fritz stunning world No. 1 Carlos Alcaraz |
| NBA All-Star Weekend | February 2025 | The league's best descended on Chase Center |
| Taylor Swift Eras Tour | July 2023 | Two sold-out nights at Levi's Stadium, the biggest tour in music history |
| Beyoncé Renaissance Tour | August 2023 | Another global icon, same stadium, same summer |
| APEC Summit | November 2023 | Biden, Xi, and world leaders took over San Francisco |
| U.S. Women's Open (golf) | June 2021 | Yuka Saso outlasted Nasa Hataoka in a playoff at The Olympic Club to become the first Filipina major champion, after Lexi Thompson's heartbreaking back-nine collapse |
| PGA Championship | August 2020 | Collin Morikawa, a Cal Berkeley product, won his first major at TPC Harding Park with his famous drive on the 16th |
| Warriors Dynasty | 2015–2022 | Four NBA titles (2015, 2017, 2018, 2022) and six Finals appearances, all playable in person |
| CFP National Championship | January 2019 | Clemson 44, Alabama 16 at Levi's Stadium |
| Super Bowl 50 | February 7, 2016 | Broncos 24, Panthers 10, Peyton Manning's final game |
| Copa América Centenario | June 2016 | Levi's Stadium hosted matches in the tournament's historic U.S. edition |
| WrestleMania 31 | March 2015 | Over 76,000 fans packed Levi's Stadium |
| Giants World Series Runs | 2010, 2012, 2014 | Three titles in five years, with World Series games at Oracle Park |
| America's Cup | September 2013 | Oracle Team USA's legendary comeback from 8-1 down to win 9-8 on San Francisco Bay |
| U.S. Open (golf) | June 2012 | Webb Simpson won at The Olympic Club, the fifth U.S. Open hosted on those famous cypress-lined fairways |
And that's just the marquee stuff. Every single year there's Outside Lands, Hardly Strictly Bluegrass (a world-class music festival that is literally free), Fleet Week with the Blue Angels roaring over the bay, various professional tennis tournaments, startup conferences and demo days, and more Michelin stars per capita than almost anywhere in the country. That's what you get when you pay taxes living in an expensive city.
When I lived in New York City from 1999 to 2001, my favorite city in the world for six months a year, the Yankees won the World Series twice. Going to those games, catching Broadway shows, eating at incredible restaurants, and stumbling into random bars and warehouse parties was a blast. That's the expensive-city life. Work hard, sure. But you're never bored.
Offense Builds Wealth, But Freedom Is The Point
At the end of the day, we're not building wealth for the sake of a bigger number. We're building wealth to be more free and live a better life. If you play offense in an expensive city, you get both: more income and equity upside than you could ever generate playing defense in a cheap city, AND easy access to the greatest events on Earth.
The tragedy is being wealthy enough to attend and still watching from your couch because the frugality muscle won't relax. I've written before about how the hardest part of FIRE isn't accumulating money, it's giving yourself permission to spend it. Missing that World Cup match was my latest reminder.
So here's my new rule, and I invite you to adopt it: if a once-every-four-years (or rarer) event comes within an hour of your home, you go. No spreadsheet analysis. No “let me check the resale market Wednesday.” You go. The memory dividend compounds far longer than whatever that money would have earned in the S&P 500.
The next World Cup on home soil probably won't come back for decades. The next Super Bowl at Levi's? Who knows. But something else spectacular is always coming, because that's what expensive cities do. They put on a show.
Make sure you're in the arena, not on the couch.
Readers: Do you live in an expensive city, and do you actually take advantage of the events that come to town? Or have you moved somewhere cheaper and found the trade-off worth it? What's the best live event you almost skipped to save money?
Wealth-Building Suggestions
Invest In Real Estate Passively: If seven-figure home prices in expensive cities make your eyes water, you can still play offense in real estate without a jumbo mortgage. I've invested over $500,000 with Fundrise, which focuses on residential and industrial properties in the heartland, where valuations are lower and yields are higher.
Earn income 100% passively, using my BURL method, while keeping your career capital concentrated in an expensive city, while having more fun. Financial Tips is an investor in Fundrise, and Fundrise is a long-time sponsor of Financial Tips.
Build Seven-Figure Wealth: If you want to build enough wealth to afford both the expensive city AND the tickets, pick up a copy of my USA Today bestseller, Millionaire Milestones: Simple Steps to Seven Figures. The sooner you get to seven figures, the sooner you can stop debating whether the good seats are worth it.
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I moved to the inner-DC suburbs after living in San Francisco for 12 years. I definitely made the core (sans investment gains) of my current financial nut while living there and miss the weather, but there are some structural issues around buying homes in nice areas to live/raise kids if you don’t have access to the “Bank of Mom and Dad” and/or one of the high-paying jobs. I *did* have a high paying job by most standards, but not by nice Bay Area neighborhood/city standards. And I did benefit too from condo appreciation (2011-2018) which I cashed-out of before the SoMa crash but most of the money I made there was just from regular equities investing that I could have done anywhere, and maybe with more disposable income elsewhere. One thing that I did benefit from was hearing about the latest tech trends and companies 1st-hand at events from people I met or knew – not inside information but just stuff you wouldn’t pick-up on in the press or X or whatnot. That probably led me to take more risk in the types of equities I invested in than I otherwise would. With respect to events, I think what you’re describing is correct, but if you’re able to retain more money and have more disposable income living somewhere cheaper, you can always fly to those events.
Cool, what are you doing in the DC area now? And what prompted the move?
I went to high school in McLean Virginia, about 30 minutes outside of DC. Near Tyson‘s corner mall.
To me, flying is a real pain in the butt. I just don’t have that in me anymore. Two flights a year is about right. I’d much rather take a 30 minute Uber ride to the event.
Honestly, expensive cities are usually just wherever the weather is the nicest. Sometimes it’s where the jobs are the best, but I have seen many examples of the best jobs and industry but with cheap COL or low & barely appreciating home prices simply because the climate and views are not that great. Similarly, an area with poor work prospects but amazing views might command very high prices. Just my 2 cents.
Which city do you live in and how are the wealth building prospects?
i work in the very middle class field of the fire service. I started in San Diego about 25 years ago and came to the midwest about 20 years ago, partly because of cost of living. I was a little short sided at the time because my similar rank in California (depending upon employer of course) can make I’d say $40k-$60k more per year. Also pensions are far better in CA, especially under that old system 25 years ago. There are also wayyyy more opportunities to promote, engage is specialties, and move laterally. I believe as well that the fire service in CA is far more progressive and professional compared to the region I am in now which translates into more career developmental opportunities. Also, I have had rental properties here in the midwest for the last 20 years and while I’ve done modestly well, if I’d have done the same thing in CA over the same time period with the same effort, I truly believe the difference would be several million. IMO, even middle class jobs like mine basically pay for the increased cost of living.
I couldn’t agree more about the hardest part being spending your money after saving so hard for many years. To break our frugal habit we have just returned from a week in London and a week in Paris with our two 12-year old granddaughters. And, we flew Business for the 10 hour flights. I hope the memories will last them long after we are gone.
Paying Business for a 10-hour flight is not easy, even if one can afford it! I haven’t got the gumption to do that yet, although I did pay for a RT first-class/business class ticket in 2021 during COVID to see my parents in Hawaii 5 hours away. It was $1,600 versus $500 for Economy, but I thought maybe fewer people around and having my solo seat with nobody next to me meant less chance of getting sick.
I’m sure everyone on your trip will remember it forever! What a blessing to be able to have and travel with grandkids.
Luckily with our jobs (professors) we don’t really have a say where we live if we want our tenured jobs – otherwise we would constantly be evaluating whether to live in a big city or medium city or small city!
We’ve ended up in a small/medium city in flyover country and couldn’t be happier. We can afford to travel a bunch and visit bigger cities. If we lived in one, we wouldn’t be able to afford to travel anywhere else. I’ve grew up right outside San Francisco and our day-to-day life as a kid was pretty much exactly like our day-to-day life with kids now.
But, again, I feel so lucky to not really have a choice (given that we aren’t stuck in a small town!). We have accepted the trade-offs and never have to debate it. The paradox of choice is real.
My experience has been completely the opposite. I moved from Vancouver (considered a world class city) to Calgary, and can say people seem a million times happier here. They’re focused on enjoying life, instead of talking non-stop about how great their city is. People are way nicer, down to earth, and don’t feel the need to go on and on about how great their city is, while enjoying their 4 degree view of the ocean, between two other buildings, visible on the 12 sunny days a year. The most unfriendly, unhappy people I have ever met in Canada were in Toronto. Statistically (in Canada at least), people living in rural communities are happier than those living in cities.
Cool. Did you make your money in Vancouver? If not, how are you feeling Wealth in Calgary?
Vancouver is a beautiful city. I think we are going there this fall and then off on a cruise.
What a great place to make a fortune in real estate over the past 20 years. Were you able to buy a single-family home there?
I lived in Dallas many years in the 80’s while I was climbing the corporate ladder. It was a phenomenal choice at the time. The cost of living was very low for a major city and there was so much to enjoy. Being there along with a great job and some luck allowed me to retire early. Now I live near Boston and while it’s much more expensive it absolutely has all the qualities that you’ve described. Love where you live!
Thanks for this post. I always assumed people living in these awful places didn’t have a choice….
You do get that Humans weren’t meant to live that way, right?
The greater the population density, the nastier people behave…, and the greater the chance that your neighbor wants to tax you (but not be taxed themselves), and the more likely people are to vote democrat (which I get I’m being redundant 3 times in a row there…)
Enjoy all those great “events”…. and keep telling yourself how “lucky” you are to go to this stuff that you apparently have to write posts about to convince yourself to actually muster up the energy to attend….
I’ll be back after my walk in the woods – just out the back door…
Love this comment and the emotion it has. Was there something that happened to you while living in a more populated city? It just goes to show how everybody views things differently. And if you can build more wealth living in the woods, more power to you.
Personally, I think it’s more optimal to build wealth in a bigger, expensive city and then buy a vacation property in the woods or wherever. We love Lake Tahoe! You can also live in a less densely populated part of a big city too.
I’m taking the kiddos to the beach down the hill in Kahala after the Egypt WC victory over Australia. What a match!
I’ve come across so many disgruntled people who couldn’t hack it in places like NYC, LA etc, and were driven out by the cost of living element.
Sorry if this is you Jackson. At least you tried. The woods are nice, and being wealthy isn’t everything. I’m sure you can still have a nice life with less opportunity and wealth. Keep your head up!
I doubt if Jackson couldn’t “hack it.” Lot of assumptions in a statement like that.
Lot’s of folks make different choices that work for them.
More than likely despite what Samurai claims – most of the people is the large cities are “stuck” and can’t “hack” trying to leave their expensive, crowded, spots.
The wonderful “entertainment” described seems to be nothing but passive watching of other people living their dreams. Go for it if it works for you!
I acknowledge the money that can be made in larger cities. I lived in several throughout my career, Chicago, Nanjing, Portland and Stuttgart Germany over several decades. Enjoyed these places a bit but for most part was there for the money.
Because I put in my time, I now live in flyover country in a beautiful home on a large acreage wooded parcel in a quiet setting away from the masses.
Do not miss the noise and crowds of cities for anything. they serve a temporary purpose only.
Cool. Did you make your money in Vancouver? If not, how are you feeling Wealth in Calgary?
Vancouver is a beautiful city. I think we are going there this fall and then off on a cruise.
What a great place to make a fortune in real estate over the past 20 years. Were you able to buy a single-family home there?
My business has been 100% online since we closed our office when COVID hit. We actually owned a condo and a townhouse there, and sold both to have our ‘forever home’ (single detached) mortgage free in Calgary. In terms of property, we absolutely benefited off of Vancouver’s price appreciation, and would not have benefited in the same way had we lived in Calgary the whole time. We could have upgraded to a single family in Vancouver, but we’d most likely still have a mortgage. There’s no denying it’s a beautiful city (as is SF). I’ve always said Calgary is built for living and Vancouver is built for looking at.
Nice, well there you go! You made some good money living in an expensive city and then you relocated. Do you think you would have made as much in Calgary real estate and in your career?
Why did you move to Calgary?
Man I wish I can work in big tech and make the big bucks
I’ve been stuck taking the scraps from the job market and investing as aggressively as I can to match the high comp of my peers
So I’m in NYC reading this & yes- agree with you! There’s so many fun things to do here. And yes it’s expensive to live here but to your point- there’s a good reason why…. so why isn’t San Francisco’s Mayor trying to implement rent/price controls there like here in NYC? Isn’t it all about supply/demand in terms of costs?
Thanks for reading from NYC! Enjoy a slice of dollar pizza for me, which I hear is now $5.
San Francisco already has rent control. Any multi-unit building constructed before June 1979 is covered, which is a huge chunk of our housing stock. Annual increases are capped at a fraction of CPI. On top of that, California passed a statewide cap (AB 1482) limiting rent increases to 5% plus inflation for most other buildings.
What’s exempt are single-family homes and newer construction, thanks to a state law called Costa-Hawkins. And that exemption is intentional. If you rent-control everything, developers stop building, landlords convert units or leave them vacant, and supply shrinks further. Then prices go up even more for anyone who doesn’t already hold a golden ticket.
That’s the paradox of rent control. It’s fantastic for the person who’s had the same apartment since 1985 paying 1985-ish rent. It’s terrible for the newcomer competing for the shrinking pool of market-rate units. Economists across the political spectrum agree on this one, which almost never happens.
So yes, it’s all supply and demand. The only durable fix is building more housing, which both SF and NYC are world-class at making difficult. In the meantime, high prices in both cities are simply the market’s cover charge for access to the best jobs, food, and energy. Annoying, but rational.
Enjoy my favorite city for six months a year!
That’s a very impressive list of events at SF area venues! Proximity to that much entertainment is definitely a huge draw especially to sports fans. I am always shocked at how many people fly in to see games because of how much it costs. But it sounds like a unique and memorable way to vacation albeit expensive!
It’s true. Nobody worthwhile is flying to Longmont, Colorado to perform. Entertainers will go to big cities where there’s the most number of people with the most amount of wealth to perform.
Downshift to a less expensive city after you’ve built your wealth, if that is what you desire. But to try and build wealth by saving on living costs is completely backwards.
I live in NYC and I’ve had incredible job opportunities just by meeting and networking. It’s much easier to get hired with such a concentration of people.