Do you think that you will become rich living in a big city? Do you believe you will be the next enormous success story to come out of San Diego, Los Angeles, Houston, Atlanta, or New York City?
The chances are that you will not become rich or become a massive success story. It’s not because you did something wrong or that “you suck at life.”
Big cities consume you whole and spit you out as a shell of a person. Most people can never overcome trying to live the lifestyle of being rich actually to become rich.
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My background. I was born and raised in San Diego, California. It is all I knew until I joined the Marine Corps in 1999 and traveled the world.
I truly began understanding the differences between large and small cities in 2008 when the Marine Corps stationed me in Yuma, Arizona.
In Arizona, my wife and I grew our family, took care of my mom, bought a house, owned our cars, and traveled to Phoenix and San Diego.
Today, I swear by smaller cities like Yuma and Pensacola. My philosophy is to get rich living in a small town, and then you can bring your wealth into a large city later.
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The big city trap. Now, 20+ years later, I am back in San Diego on a work assignment. I see this city swallowing people whole.
The big city trap is more than the cost of housing—it’s the associated lifestyle. Not only do you live in a lovely home or apartment, but there is a list of more things to demonstrate your wealth to others.
- Cars. You need a late-model vehicle. You must own a Tesla, Audi, or Range Rover here in San Diego.
- Eating In. If you’re eating at home, you need to buy the most expensive healthy food available.
- Eating out. You have to eat at excellent restaurants. Places like Applebee’s are non-starters.
- Shopping. You need to go to the shopping malls every day and buy things.
- Kids. Driving your kids to school in your late-model car is necessary. Private school is required in some circles.
- Gas. No matter the gas prices, you should never change your driving habits. Just keep burning through your gas bill.
Watching young people (20-45) act like they are rich is genuinely egregious. Most Americans are broke and living paycheck-to-paycheck. I can see why here in California.
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This lifestyle looks normal to everyone who lives here. However, to us small city folks, this lifestyle is foreign.
Upgrading to a big mindset. So is it possible to become wealthy in a big city? Yes, but first, let’s define wealth.
Let’s define wealth as paying all your bills and lifestyle expenses while saving and investing $4,000/month.
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For example, if you needed $7,000 per month to live in San Diego, you would bring in $11,000 per month. The extra money is called cash flow. Eventually, you would want to bring in $11,000/month as passive income (a story for another day).
Creating a $4,000/month cash flow may seem easy, but it’s tough in a big city. The first step to converting to a big mindset is reducing your housing expenses.
Reducing housing costs. If you earn $11,000/month, it equals $132,000 a year. That is decent money, even in San Diego. However, once you buy a home, most money goes out the window.
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Even if you get lucky and only pay $3,000/month in housing costs, it’ll still be hard to be cash flow positive. The best way to reduce housing costs is to get a roommate or two.
It is a tough pill to swallow, but you can reduce your housing costs to zero. That alone would give you enough cash flow to become rich.
Car and gas prices. A couple in a big city probably pays $1,500/month in car payments and $1,000/month in gas. I cannot even fathom paying these outrageous amounts of money.
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I have two paid-off cars in Florida. I had to buy another vehicle to take to San Diego—a 2016 Ford Focus ($17,000). I pay $500/month for 48 months. My gas bill is roughly $120/month because gas is $6.50 a gallon.
Most people here cannot imagine driving a Ford Focus. I have been in the military for 23 years, and most younger Marines drive more expensive cars than me. Seriously, I mean much nicer cars.
Cars and gas are the most manageable expenses to reduce. Buy a nice car for under $20,000 and drive it for ten years. Reduce how much you drive, and take your gas budget seriously.
Living an affluent lifestyle. The thing about living in a big city is that you cannot tell who from who. Some people can actually afford to live here in San Diego.
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They own multiple properties across the US and the world. They have massive 401Ks, dividend portfolios, profitable businesses, and family inheritances. These people are living a great life, and they are living conservatively.
They have thousands of dollars in cash flow each month and ensure that they reinvest most of it to build their portfolio over time. However, they look just like you and me.
So, a wealthy person who makes $30,000/month in passive income drives a Range Rover Sport ($105,000). And you earn $11,000/month from working a job and driving the same Range Rover Sport ($105,000).
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That scenario is the trap of a big city. Everyone competes to look rich, but very few people are rich. It is much easier to tell who is who in small towns.
If you understand where you fit in life in a big city, you will be better off than most people. Trying to go to the sports game every weekend and Disneyland once a month is a recipe for staying poor.
Conclusion. It is quite possible to become wealthy while living in a big city. The problem is you’ll need to live below your means for ten years.
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Can you drive a Ford Focus and have roommates for ten years? Would it bother you only to go downtown once a month? Could you make your own coffee and skip Starbucks?
These are the questions you need to answer. My wife and I have $5,000 to $6,000/month in cash flow. We ensure that at least $5,000 gets into savings and investing.
We prioritize getting wealthy over living above (or at) our means today. Most people cannot do this because of peer pressure and social anxiety.
However, we can come out of our cave once we are rich. One day our dividends will pay us $10,000/month—this is our big mindset. Sacrifice a little today for a fantastic future. Good Luck!
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