TL;DR
High salaries in expensive cities can be misleading; cost of living eats into potential savings, highlighting the illusion of wealth. Remember the lessons of past financial crises, where deceptive appearances masked underlying risk.
Story
The American Dream, cracked: John, a software engineer, moved to San Francisco, lured by a six-figure salary. His employer matched 10% of his contributions to his 401k. It seemed fantastic—until reality hit. His high cost of living (HCOL) ‣ High Cost of Living: Areas where necessities like housing and transportation are much pricier. devoured his earnings, leaving less for investment, even though his retirement savings were boosted. Like a Ponzi scheme dressed as a career move, John’s plan worked perfectly until it didn’t. He imagined a comfortable retirement, but his high living expenses ate into potential savings and investment gains. This reminds us of the 2008 financial crisis, where people believed high returns were guaranteed, only to find out later how easily the house of cards could collapse. His narrative is a modern cautionary tale—a reminder that what looks lucrative on paper can be a mirage in the face of relentless HCOL. Remember Enron? Massive profits on paper, but ultimately a house of cards, built on accounting tricks. John’s situation isn’t as nefarious, but it’s the same principle: look at the real numbers, not just the shiny surface. Many people prioritize lifestyle over long-term gains, a mistake that can haunt you decades later. High earnings often mean a high cost of living—meaning much of your high earnings are being eaten up. Unless you plan to move to a low cost of living (LCOL) ‣ Low Cost of Living: Areas with significantly lower expenses, often outside major cities. area in retirement, your earnings advantage may vanish.
Advice
Don’t chase high salaries blindly. Carefully assess cost of living and potential long-term savings before relocating for a new job. Remember those who came before—don’t let your dreams vanish due to the illusion of instant wealth.