I recently sat down to watch an ESPN 30 for 30 documentary called Be Water.  The documentary, directed by Bao Nguyen, detailed the extraordinary life of cultural icon, Bruce Lee.  Lee’s life philosophy was to find his true place in the world.  The name of the documentary, Be Water, came from one of Bruce Lee’s most famous quotes:  “You must be shapeless, formless, like water. When you pour water in a cup, it becomes the cup. When you pour water in a bottle, it becomes the bottle. When you pour water in a teapot, it becomes the teapot. Water can drip and it can crash. Become like water, my friend.”  

It’s safe to say we are all like water today.  We’ve adapted to the changing landscape that COVID-19 has brought upon us.  We’ve learned new technologies and how to work from home.  The next form of adaptation, especially for our generation, is going to take place in the form of where we work.  Not the company, but the actual location.  

The question used to be whether or not you should relocate across the country for work.  However, with so many of us working from home indefinitely, we believe the new trend will be to ask whether you should relocate across the country for personal fulfillment.   If you are considering this move, this week’s blog is for you.  Here are 5 things to consider when relocating (not for work).

1. The Housing Market

As you already know, housing prices vary across the United States.  A three bedroom, two bath home in Los Angeles may sell for $1 million while a similar home in Minneapolis would sell for $300,000.  We recommend researching the housing market wherever you are going.  Now, I know what you’re thinking...should we buy or rent if we relocate?  The textbook answer is to rent so that you give yourself time to try it out.  Either way, it is prudent to research the housing market before you move.  Here is a Rent vs Buy Calculator put together by Zillow.  

2. Cost of Living

The most common comparison we talk about with clients is what we mentioned above, the financial difference in housing.  However, we can’t forget about all the other living essentials.  Let's create a fictional character named Drake.  Drake lives in Brooklyn, NY and earns $200,000 per year.  Lately, Drake has been getting the itch to move.  He’s been hearing amazing things about Austin, TX and the up and coming hipster revolution there.  If he decided to move there his comparable salary in Austin, TX would be $110,000.  His groceries would be 28% less, housing 69% less, utilities 17% less, and transportation 14% less.  How did we get these figures?  Check out the CNN Money cost of living calculator.  Drake’s $200,000 income would feel like it nearly doubles just by moving to Texas.  Wherever you move, see how far your income would stretch, or shrink!

3. Health Care

If your insurance is provided through a state run program, moving will inevitably change that.  It is absolutely critical that you compare the costs and coverage of your old and new state’s health insurance programs.  Health care premiums vary state to state and not all plans are created equal.  For example, deductibles on some bronze plans can be north of $15,000.  Natalie’s blog goes into more specifics about health care options available to you.

4. Transportation

We get to know our clients’ financial goals throughout our time working together.  What we don’t do as much is share specifics about our aspirations!  So, here we go… just like you, Natalie and I talk about our dream car.  Want to know what it is?...It’s no car!  

We don’t have children yet, so maybe our ‘no car’ dream is unrealistic for the long haul.  However, based on our current needs, we dream of living in a place that has bike lanes, running/walking paths, and great public transportation.  Walkability is also important.  If being in close proximity to grocery stores, restaurants, and coffee shops is important to you, check out your future neighborhood’s walk score.  

If walking or public transportation doesn’t fit your lifestyle needs, then car transportation research will be important.  What does rush hour look like where you go?  Does it matter if you are working from home?  Don’t forget about car insurance.  When we moved to Portland from Minnesota our car insurance premium remained the same, roughly $1,000/year.  Here’s the kicker -- we had 2 cars in St. Paul and downsized to only 1 car in Portland.  Yes, literally 2 for the price of 1!  We spend a lot of our time getting to places.  Figuring out what that will look like in your new state is an important part of your consideration.

5. Taxes

Taxes can be a major factor in whether or not corporations should move to a different state.  Your personal situation should be no different.  Taxes vary drastically from state to state.  It’s a benefit to the Minnesota “snowbirds” who live in the frozen tundra half the year, but claim residency in a place like Florida with no state income taxes.  Check out the two lists below provided by Intuit.  The first lists the states with no state income tax, and the second lists the states with the highest income taxes as of 2019.  What you currently pay in state income taxes versus what you will be paying can be the difference of 5-10% of your income.  This final piece should not be ignored.

No personal state income tax

• Wyoming

• Washington
• Texas
• South Dakota
• Nevada
• Florida
• Alaska

 Highest personal state income tax

• California 13.3%
• Hawaii 11%
• Oregon 9.9%
• Minnesota 9.85%
• Iowa 8.98%
• New Jersey 8.97%
• Vermont 8.95%
• District of Columbia 8.95%
• New York 8.82%
• Wisconsin 7.65%

As the world keeps changing, so must we -- it’s inevitable, it’s who we are.  COVID-19 has given new light to what the future of working looks like.  It’s location independent, work from anywhere, be where you want to be.  The thought of moving with no real career incentive tied to it, only personal bliss, is hard to stomach.  But, if you are serious about relocating, think about these 5 topics, and know we’re here to help you go deeper.  

Whatever you decide, Be Water.

Disclaimer:  This article is for informational purposes only and is not a recommendation of Fyooz Financial Planning, Natalie Slagle CFP®, or Daniel Slagle CFP®. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. Therefore, it should not be assumed that future performance of any specific security, investment product or investment strategy referenced in the Article, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s). No portion of the Article shall be construed as a solicitation to buy or sell any specific security or investment product or to engage in any particular investment strategy. Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products, which otherwise have the effect of reducing the performance of an actual investment portfolio.