I’ve been through this before. Before someone calls me out on it, I’ll admit: I’m exaggerating more than a bit. The truth is I’ve never been a king, nor a pauper — I’ve lived my whole life some shade of upper middle class, though the gradient I’m descending now does subjectively if inaccurately feel like the difference between the two.
The transition from being a big fish in a small pond to a small fish in a big pond is never easy. I’ve made the jump several times before. Living in Dallas on a teacher salary was surprisingly comfortable. Earning $46k per year was plenty enough to live in the glorious master bedroom suite of a beautifully renovated house which had three balconies, two driveways, a detached garage for my car, a huge backyard, and a true chef’s kitchen. In the five years since I have yet to close to that living experience. While in Dallas I even managed to lease a brand new BMW (see: $30k millionaires). My first hop was to LA, which was tough but not terrible.
When I moved to LA, my salary increased by some 50%+ but my cost of living easily doubled. It was fortunate that I already had the BMW required for living in Southern California, as I had failed to anticipate just how gnarly California state taxes are; despite a huge salary increase, my take home pay astoundingly went up by mere hundreds of dollars and in the first months I massively overspent. I went from saving a little money to saving absolutely none, which was alarming to say the least. It’s worth noting that I could have saved money if I had tried to, but it’s equally true that I didn’t move to California to downgrade my life; I went to upgrade, and spent accordingly.
If the cost of living in LA was strikingly high compared to Dallas, the overwhelming amount of wealth seemingly everywhere had an even greater effect on the psyche. Dallas had Mark Cuban and Highland Park, but those are nothing compared to the entertainment industry and Beverly Hills. The ceiling became much higher living in LA, and inadequacies that wouldn’t have been felt in Dallas came to the forefront. Net, if factoring in being not that far from the beach as a major positive contributor to lifestyle happiness, I probably eked a slight life upgrade in moving to LA, though my relative stature relative to others definitely declined. I distinctly remember someone telling me that having a “job” was “uncool.” I don’t know what was cool because I never got mixed up with any of that, but it couldn’t have been clearer to me that I was a very small fish in a very big pond. I never really got a chance grow into that pond, as the next hop came hard and quick.
Moving to San Francisco was tough and great at the same time. Back then, rents basically doubled going from LA to San Francisco and my salary actually went down a fair bit in my move. My budget was so tight upon my move that I had to share a bedroom with someone. The apartment was close to my office and in my (low) price range, which was all I really cared about. The only question I asked my then future prospective literal roommate was whether he snored. He answered, “no.” Of course, I later discovered that he did indeed snore, and quite loudly at that. Financially, my new job made no sense compared to my previous one, but everything isn’t about money, of course.
My San Francisco move made me feel like a pauper financially, but a king professionally. Finally, I had a “cool” job. People who knew me through college frequently questioned my life decisions up until then, but nobody questioned joining a VC firm. San Francisco is a tech town and VCs sit close to the top of the social hierarchy as gatekeepers of capital. While successful entrepreneurs sit right at the top, the investors are there by their side, basking in their glow. This social system honestly puzzled me and continues to to this day, but it was clear from the get-go that even being a mere Analyst at a fund was something to be proud of — never mind rooming with Snorlax. It was a modest start but equally clear that this fish might actually grow.
Fast forward a few years and a few promotions and I actually feel like I’ve finally done fairly well. Appearances can be deceiving but I’ve been able to live comfortably, even luxuriously, for the better part of the last year. I felt I had reached an intermediate plateau in terms of quality of life, and saved up enough that I ought to go anywhere and maintain this level. After all, the numbers suggest San Francisco sits right at the top of the world in terms of cost of living, matching New York, London, Hong Kong, and other tier 1 cities. I have long been planning a move to New York which I figured would be a lifestyle upgrade but a socioeconomic lateral. How wrong I was. If I had deceived myself into thinking I was a king, or more realistically a burgeoning prince of thieves, I couldn’t not have been more off.
Lets a take a moment to consider the true difference between a king and pauper. Being a king is fundamentally accretive. Kings and queens tax the common folk, the paupers. I might be grossly simplifying what it means to be a king, as I don’t know kings nor do I ever really expect to, but at the end of the day kings are collecting while paupers are paying. It’s a bad sad to think of it that way, but on some level plainly true. With a lot of capital one can simply live off interest. With no capital, one must live on wages til death through taxes. I have enough money saved up to earn maybe a couple grand in interest annually. I know I’m fancy but ain’t nobody living off that.
On the day of this writing, I’ve had many funny little reminders that my assets are diminishing, not accruing. I woke up to alerts from my bank cautioning that my checking account was about to be overdrawn. I came to my office to a stack of even more bills with some fines and tickets to ice that cake. I went home to find to my recent house guests have completely exhausted my supplies of toilet paper, paper towels, and laundry detergent. To run bare of those essentials felt profoundly funny, with a tinge of a sadness; one of those laugh-at-yourself-because-what-else-would-do moments. I clearly have not made it. And in case that wasn’t already clear to me, shopping for apartments in New York City sealed the deal.
To be honest, this comes as a surprise. I thought San Francisco was pretty much as expensive as it gets, being up there with New York, Hong Kong, and London in terms of average rents. People have for some time been saying that San Francisco is more expensive than New York, which may be true on average, but if you’re like me I can assure you it’s not.
I love my apartment in San Francisco and think it’s cool. In the last weeks of apartment hunting I’ve come to realize that it would 2–3x what I currently pay to have an apartment similar to mine. I suppose upon further examination it shouldn’t be surprising that the market for bachelor pads is a bit soft in San Francisco but very hot in New York. In my head, I thought maybe I’d pay a bit more money in New York and get a bit less space in the more desirable neighborhoods. I knew there was more variance in New York pricing, but wow. Just, wow.
I know I could not be further from a pauper, but rather unexpectedly I’m feeling like I’m sliding towards being one. San Francisco is well to do if not better to do on average but hides its extreme wealth very well. In New York the wealth is in your face, starting with the rents for a nice place on StreetEasy. There’s no lulling yourself into thinking you’re doing better than you are there, as can easily happen in San Francisco. New York makes it clear where you stand, and that you stand very far from the top; the level up from San Francisco is palpable, but motivating.
I didn’t expect apartment shopping to light a new a new fire under me, but it has. In San Francisco I had my dream apartment but didn’t live in my dream city. New York will not yield its fruits easily and I’m going to have to work my way up now. The truth is, I’ve had to keep working my way up. New York was just courteous enough to make sure I didn’t forget that. Catch me in my SoHo studio this year. You’ll know I’ve made some progress if you find me moving into a loft same time next year. That, or I finally uncover the dark art of getting a great deal on an NYC apartment.