What decision can a person make to best influence their financial future?
Understanding the answers to this question can help organizations across a multitude of industries better understand and predict trends that should influence their business decisions. Individuals and families use a wide variety of information and preferences to determine how best to build wealth.
Sarah Stanley Fallaw is a wealth building expert and coauthor of the book “The Next Millionaire Next Door: Enduring Strategies for Building Wealth.” She surveyed over 600 millionaires to determine how the rich got there and maintain upward momentum.
Her key finding?
The rich who stay rich choose to live in neighbourhoods that are affordable to them.
In fact, the wealthiest take this to its logical conclusion: they live wherever they can maximize their earnings compared to their costs of living.
There are several reasons why this approach works. Spending habits are contagious, and influenced by who we live near. Less expensive neighbourhoods tend to be occupied by lower income earners, who are far less likely to spend income on the unnecessary expenses that slowly add up over time.
More importantly, though, is the obvious fact that earning more while spending less on the basic costs of living generates more income that can be put towards other wealth building activities. The cost of housing is the dominant living cost in every area, and most of the millionaires Stanley Fallaw studied never purchased a home more than triple their annual income!
So where should one live in order to build wealth most effectively?
Answering that involves a complex analysis that depends on the occupation of the individual in question.
Fortunately, Estated has combined the latest employment data from the Bureau of Labour Statistics with our comprehensive nationwide property data to calculate the top three locations to consider for each of over 800 jobs.
Our analysis only compared areas where one could reasonably move to and find employment. For each Metropolitan Statistical area, we calculated the median home price per square foot in the month of May 2019 to avoid conflation with COVID’s effects on the market, as determined from preselected arm’s length and market-value transactions. We divided this median price by the hourly wage to determine the number of hours worked it would take to pay for a home, on average, per square foot.
Find the best place to live to build wealth.
Want more in-depth information for certain jobs, or a more complete dataset as a whole? Reach out to Estated.