US low cost living

[simplex]

Came across this description of rural living in upstate NY: https://shagbark.substack.com/p/how-to- ... in-america .
Obviously this monthly budget of $432 excludes health costs.

[mountainFrugal]

Nice! I was just coming over here to post the same article. Great read.

[jacob]

Many places like that, not just in NY but also in pretty much every other state as well as in all other countries.

It's cheap because it's literally [1-2] hours away from "civilization". This means you HAVE to appreciate the simple things in life which is outdoorsy stuff like snowmobiling, hunting, and trees, and simple indoor stuff like reading, praying(he mentions this), a couple of TV channels, and AM radio. Your social life if any will be effectively restricted to meeting the locals down the street.

I grew up in "rural Denmark" (if that's even a thing) and the lack of civilization and variation was not for me. Funnily, when I started reading the article, my first thought was that the only job around there was probably the local gas station/general store. When he mentioned Stewarts, I knew exactly what he was talking about. (I have family living in Upstate NY.)

[chenda]

Great article. I'm surprised more people don't do this. Maybe they will. And if you got a decent-ish WFH job or a government job (there must be a few about) you could geoarbitrage. I think you could get satellite internet if you couldn't live without daily you tube. And in NY cross into Canada for cheaper healthcare. Also such low assets would essentially immune you from bankruptcy.

[jacob]

@chenda - I'm not surprised. I mean, it sounds romantic but it really isn't. For example, the town (population <150) that I grew up in used to have a train station, a butcher, a community house, a sports club, a church, and a welder/machine shop. The buildings were still there but they were all unused/abandoned---only the signs remained. I left 30 years ago. My parents still live there and are now some of the longest-living residents. The new residents are either commuters who have nothing to do with the community (they just sleep there) or people on disability or various other government support who can't afford to live elsewhere. It's not hard to tell which houses belong to which based on the state of (dis)repair. Overall, it looks and feels like a ghost town. Only the sounds of distant chain saws, passing cars, and barking dogs remain. You rarely see another human being.

Economically, a lot of these towns are the remnants of a long-gone industry or factory. Now they're mainly propped up by government money. Basically a mix between a few highly paid government jobs and a long fat tail of disability checks, small pensions, food/unemployment benefits, child credits, etc. If you look at stats for these towns, you'll often see that the biggest employer by percentage is the [national-level] government. This might seem surprising but it's mainly because not that many people are actually working and those are some of the only jobs around.

Our "travels" don't take us to Thailand or London or other touristy places, but it often takes us through towns like this and we sometimes stop for a walk. Things are better experienced on foot than through the window of a car. It's a very general picture. Socioeconomically, "small town rural poverty"-situations are all quite similar. There may be a small school will take the local kids up to K-9 or even K-12 if they're lucky---if not there's a 1hr bus ride taking them to the nearest larger city. After graduation, the few with the smarts, ambition, and means to do so leave and never come back. Those who remain are generally not very educated (quickly regress back to a 4-6th grade reading/math/science/history/geography level) and everything they know about the world is based on what their local TV or radio station is telling them. They might find a job at the gas station or driving a tractor for the giant consolidated farm (likely also on economic life support) ... or take a hint from their parents and figure out how to get on government disability themselves.

I'm saying this as a heads up to highlight what one as an outsider should expect to be moving into should one choose to do so. As a "clever life hack" it leaves much to be desired. For the "commuters" (and FIRE people) it's certainly an affordable way to own a horse and a few acres of nature with connected snowmobile trails. If that's what you're into and its enough to make up for the downsides, by all means go for it. For those who are forced to live there because they can't afford to go elsewhere or because they have to grow up first, it's an economic, social, and cultural dead end.

However, there are a few exceptions in which an otherwise abandoned city gets revived and turn into some kind of alternative living-hub as the "kool kids" for whatever reason agree to all move there at the same time. (Something the locals might be not all too happy about.) This does not generate money unless the town can make the next step into a tourist destination/trap. However, it does change the local culture away from middle- and high-school dropouts.

[chenda]

For the "commuters" (and FIRE people) it's certainly an affordable way to own a horse and a few acres of nature with connected snowmobile trails. If that's what you're into and its enough to make up for the downsides, by all means go for it. For those who are forced to live there because they can't afford to go elsewhere or because they have to grow up first, it's an economic, social, and cultural dead end.

This is what I was getting at. Also I think its a graduated difference rather than an absolute difference, you can find affordable areas which still have a some amenities and not too far from civilisation. I imagine nowhere in Denmark is more and than an hour or two from a medium sized city.

[theanimal]

I have followed Andy on Twitter for at least a couple years. He has buit up a large following (~40k) posting on this theme and about his travels hitchhiking as a vagabond. He is really passionate about upstate NY as that is his home and has tried to get his followers to move there to create a community IRL. To date, he has not succeeded, largely for the reasons Jacob mentioned. That is where he is from and he has family there, but it would be a whole different story for someone from outside the area to do so with no connections and no job prospects.

It's been illuminating to see the responses to some of his tweets and posts over the years, in the sense that not much has changed compared to the original ERE objections. I frequently see and hear people dismissing his message due to Andy "glorifying poverty" and wanting to be "poor in he middle of nowhere". In one group chat I'm in, someone even linked to the article above talking about how "Andy is trying to get everyone to move to the middle of nowhere and be poor with him again." Marketing defintely matters, and I don't think it helps his case that he often posts about $20k houses for sale around the country that need substantial structural and interior work or are in run down locales.

I have told him multiple times that he needs to read the ERE book. I don't think he has done so yet.

[ertyu]

I'd be doing the same thing but in a mid-size city in buttfuck nowhere eastern europe. Don't move to andy, move to me. Groceries are walking distance and it'll be intellectually stimulating, you'd be trying to figure out wtf everyone around you is talking about all the time 'cause anyone that knows english has moved on long ago and works elsewhere (ok this is a bit of a lie, there are some who can speak to you in english there, but probably not in your daily interactions with the grocery store cashier). Plus we can learn skills while poking at trash place together. Any takers? No??

[zbigi]

My EE city also somewhat qualifies, after a crazy run on a housing market these past 5 years, prices for downtown studios are now approaching $35k (I snagged mine for $18k 10 years ago). You don't need a car and healthcare is free.

[chenda]

My EE city also somewhat qualifies, after a crazy run on a housing market these past 5 years, prices for downtown studios are now approaching $35k (I snagged mine for $18k 10 years ago). You don't need a car and healthcare is free.

What are local salaries like?

Interestingly Russia has one or the highest rates of home ownership in the world, much of it as second home dachas.

[zbigi]

The average take-home salary in my city is around $1500 per month. Median is likely lower, but I can't find it off-hand.

Poland also has very high home ownership rate (it's the main reason why the average Pole is actually wealther than the average German - many Germans being a life-long renters, and thus having no house equity). During Communism, all flats were owned by the state one way or another, and, after the fall of Communism, people were allowed to buy most of them from the state for pennies. So, almost everyone who was an adult pre-1989 has their own place without mortgage. Younger generations are also heavily into ownership - they prefer long mortgages or going abroad for a couple of years to save up to life-long renting. And, of course, they get to inherit from grandma and grandpa.

[loutfard]

My EE city also somewhat qualifies, after a crazy run on a housing market these past 5 years, prices for downtown studios are now approaching $35k (I snagged mine for $18k 10 years ago). You don't need a car and healthcare is free.

An acquaintance bought a quite spacious house in need of some renovation for 5k€ about a month ago. Complicated story with an auction of a house confiscated by the local government, previously owned by a Baltic citizen who had emigrated to Russia and hadn't paid real estate taxes in years. Quite nice:
- center of a tiny historical "city", 1.3k inhabitants
- amenities: supermarket, diy shop, doctor, pharmacy, restaurant, winery, culture venue, school, music school, hairdresser, ...
- core public transport node
- utilities: almost free wood heating, free water thanks to historical well running through houses (!)

The capital is two hours by public transport though.

Local jobs are almost all low-paid. Think ~650€/month for a supermarket cashier. Forestry pays significantly more, but it's dangerous. People missing a finger are not exactly rare here. Remote jobs are the obvious alternative.

[zbigi]

@loutfard
How's the air quality? It's one of the largest downsides of small towns and villages in Poland - too many houses are still using completely outdated coal-fired boilers. It's been illegal for a couple of years now, but, like many other laws in Poland, it's more like a suggestion than actual law - basically, you'd need mean neighbor to report you to ever get a fine. Things are slowly getting better, according to government stats, but, at current pace, it will take a decade or two until you can breathe clean air during wintertime, esp. in small towns and villages (cities mostly have either central heating or wealthier residents who switched to natgas already).

[chenda]

The average take-home salary in my city is around $1500 per month. Median is likely lower, but I can't find it off-hand.

So it's still extremely affordable. That's very interesting about housing. The opportunities for geoarbritage in EE are incredible. I know someone who works remotely whilst living in the mountains of Poland, she must be saving £1000s every month.

[zbigi]

So it's still extremely affordable. That's very interesting about housing. The opportunities for geoarbritage in EE are incredible. I know someone who works remotely whilst living in the mountains of Poland, she must be saving £1000s every month.

Yep, that's basically how I retired on easy mode. Although very low cost of living has been offset by my conservative assumptions about SWR (0%-1%), so I still needed to save close to a million dollars. Assuming 3% SWR, you could buy a flat and retire here on 3 years of senior geoarbitraged remote coding work (however, 3% SWR with Polish cap gains and cap income taxes seems a bit risky).

[loutfard]

@loutfard
How's the air quality? It's one of the largest downsides of small towns and villages in Poland - too many houses are still using completely outdated coal-fired boilers.

Air quality in winter is actually surprisingly good. No coal. The wood stoves surprisingly often are really efficient and clean burning mass heaters, sometimes even historical ones. The apartments have fairly clean burning central heating. Also, more than a few places are running on heat pumps.

Subjectively, old diesel cars feel like more of an issue. You really smell them, especially in winter. Then again, with fairly stringent regulations kicking in and actually being enforced, that will soon be a non-issue.

[jacob]

Housing costs should be <30% of income. With a mortgage and typical interest rates, one pays around twice the cost of the home over 30 years. So mortgage buyers pay 2x what cash buyers pay. So the economic ceiling for housing prices is around 15% relative to income.

The price of a home is therefore between 1/0.3 and 1/0.15 or 3.3x and 6.6x depending on how people own the houses and what they can afford.

Affordability is relative. Regardless of where you live, you will not see home prices straying far away from 3--7x the annual household incomes of the area. Temporary exception if an area's real estate gets hot (rising population and/or rising incomes) or cold (declining population and/or declining incomes).

This also means it's possible to predict a great deal about the economic conditions of a given area based on the housing prices. For example, if livable (non-condemned) homes in the area typically costs $25,000, the typical household income in the area is around $3750--$7500 per year That's not a lot for an entire household of WL0-1 consumers!

You can then take these incomes to predict what kind of jobs or type of welfare the local population has relative to the national population. You can predict how many people in a household are supporters and how many are supportees. At this level, it's unlikely to be dual income or even single income but likely closer to one part-time adult supporting 2+ other adults. You can predict roughly what education level the local population has for these jobs. Education level also tends to say something about what people are concerned about and generally interested in (not to be a snob about it, it's just a fact---the worlds are so different that it's ripe for miscommunication). Once you have that, you can kinda predict what the population spends their day doing and decide whether you'll fit in or whether fitting is a secondary concern.

Of course there are individual exceptions (like the commuters mentioned above) and even "local area exceptions" (like the "writer's community" I mentioned above), but as a general rule, it'll reveal what the neighborhood is like.

[chenda]

Interesting. So basically divide house price by 5 to give an idea of medium income of typical occupants? Assuming they are paying rent or mortgage?

[jacob]

Divide by 5 to estimate the sum total of all incomes in the typical household. The typical household will be paying rent or mortgage and if not, they'll be competing with those who do which in turn determines the price of the typical home. E.g. they might sell their house to cash out... or be forced to sell because everything got too expensive.

[chenda]

Right, that's what I mean. Husband and wife's combined income.