I was born in San Diego, California in 1981. I lived there my whole life. I think the city is beautiful, fun, and exciting. I would never want to live there again, however. Joining the Marine Corps at 18 and leaving San Diego is the best thing that could have ever happened to me. I was able to live in multiple countries overseas and multiple states in the US. Where you choose to live is extremely important!
This topic comes up because when I talk to family in San Diego, they have no idea what it is to live in another state. The opportunities available in other states are so abundant, that it baffles me that people are closed off to seeing all the possibilities. When we moved to the panhandle of Florida, even I didn’t know the possibilities we so endless. But after living here I have come up with a professional term to explain all the opportunities here. “Stupid money”. That’s right, “Stupid money”. Let me explain.
Kris and I bought a 1660 sq ft home for $180,000. The mortgage is $1100 a month. We can rent out 2 rooms for $600 each. We literally have someone pay our mortgage while we live inside the house. If we decide to rent the whole home it would rent for $1500. So, with this simple life hack, you see how fast you can get ahead in life. If you can live for free, how much money can you invest? What if you start a small business on the side? “Stupid money”
But maybe that was a fluke? Maybe we just bought at the right time, in the right neighborhood, and the right house. So we did it again, but we went much bigger the next time. We bought a 2500 sq ft home for $340,000 with 3 acres of land. (By the way, both houses are 15 minutes from white sand beaches). The mortgage is $1750. We rent out the two master suites for $800 each. So we pay $150 out of pocket a month to live in a huge, amazing house on great land. “Stupid money”.
Now let’s compare the first home (1660 sq ft) to something in San Diego. I choose Clairemont Mesa because it is not a beach community. It is probably 30 minutes away from the beach. A similarly priced home is roughly $800,000. Using the VA loan (no money down), that is a mortgage of $4400. Let’s do our life hack of renting two rooms. We can rent for $1000 each. That still leaves $2400 left to pay on the mortgage. Even worse, the Zillow rent estimate is $3500. So you cannot even rent the home for the mortgage.
In order to build wealth, we need to look at all the factors. Living in a great city is great. However, we need to make tough choices sometimes. In order to get ahead, remove ourselves from the rat race, and start on our path of building generational wealth, we need to use our math and comprehension skills. Sometimes it is as simple as following the easy money.
Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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