Asymmetrical Information

Well put.
You make a very good point about how living in New York (or Washington) is pretty much essential in your line of work. Many people seem to think that jobs, or should I say careers, are almost infinitely mobile. It really isn't true.

I strongly agree (except for teak floors). We are constantly told by media what is cool, what is beautiful, what is smart... We might forget what is function of everything. We attribute to things qualities that they might not have. A product should be used to satisfy needs. Ikea is furniture; if you think otherwise you have too much media. Since we produce too much, media has to create needs (they are wants really). We become obese in everyway: people just looking at TV thinking about how many unfulfilled wants they can fulfill. A dress is to cover and keep warm. It is not meant to give people degree. I know many will argue about this. However I only ask that you consider that people with status create a dress that reflects that and it is not other way around. That is there is a priority: Something comes before another thing. A status is reflected in the dress and dress is not reflected the status. Does this make sense? So what I argue is the pursuit of higher cause and if you don't find it then maybe something is wrong and you need search no more. Or you might find it... either way let me know.

Good advice. Incidentally, I live carless in DC, though, and find it pretty tolerable. For what it's worth, I think Washington's Metro is better than NY's subway, but the bus system is worse.

Put in about ten hours with a basic cookbook and Epicurious and you can replicate anything you find at the local chain place.

I'm not a big eat-outer but it seems to me that the advantage of Applebees or TGIF isn't that the cuisine there is beyond my capacity to match (although it's not like I have a deep-fryer at home) but the fact that someone else does the shopping and cooking instead of having to do it myself.

By the way, does anyone else find it impossible to reach the main page of this site, being redirected to a version from November? I'm hitting the problem in both IE and Mozilla, and clearing the cache doesn't help. Is this a known issue?

Jane-

you get joy from dogs and writing....

what if they outlawed that nice bull mastiff in nyc? it has happened in cities in england, and now they are threatening going down the same path in chicago.

please spend no dollars and enjoy writing a pursuasive article against banning bully breed dogs in american cities to protect that other big 100+ lb drool-producing joy in your life.

thanks.... cause i love my dog too, and you've got the writing skills and audience to protect her

Also carless in DC. It's not so bad. I pay a mint to live close to downtown, but I don't pay car insurance, gas, parking, and the inevitable parking tickets. I'm able to walk to work, and do 90% of my errands by foot.

You make choices. I like to live "in the mix," and that's worth it to me. So I pay more there, and find other ways to tighten my belt. I also make it a priority (although I'm not right out of school, so I'm making a few dollars more) to save as much as my income will allow. But like I said, for me it's the neighborhood - for someone else it's electronic gadgets. I think you can - *within reason* - have what you want IF you understand that raising the amount you spend in column A means cutting back in column B.

Like Jane, we live in an expensive city -- Los Angeles. We don't own a house. We could own one pretty much anywhere else in the country; even northern New Jersey is cheaper than LA. Our finances are otherwise okay, but buying a $600,000 house is just out of the question, especially when you consider that it will only buy a generic single family home in a lower middle class suburb.

We have two kids, ages one and two. I am dying to move out of LA to a place where housing is cheaper. I want my kids to have a backyard to play in, and their own bedroom, and all of the other stuff that kids have. But we stay. Why? Because my wife's parents are here. They are 80 and 81 years old. My wife is very close to them. Seeing the grandchildren is pretty much the highlight of their day. So we stay.

You don't have to be a self-indulgent yuppie to live in a blue state. If your friends and family live there, it's a good reason to stay. Jane's parents live in New York. Presumably she likes to see them. I cannot condemn her for staying in New York when her loved ones are there. Someitmes it is worth sacrificing quality of life in order to be near loved ones.

You're probably right that NY and DC are the only places to seriously pursue economics journalism, but isn't this silly? What can you do in these places that you couldn't do anywhere?

And though it's probably been mentioned before:

Raise your standard of living by shopping cheaper, Goodwill and Salvation army, etc... can be your friend.

local Examples: Glasses (ok, so they aren't Speigelau) 1$ each. They break, I don't even flinch. Dress shirts 5$ each, in my (big) size. So one lasted 2 wears, but the other 5 are still going strong. My girlfriend got an awesome famous maker cocktail dress for 10$ - 40 after getting a tailor to "fix it up". You can get a solid wood kitchen table and chairs of under 100$.... Beautiful walnut and maple cutting board: 5$.

The trick is to hit them "Early and often" the good stuff doesn't last long, and is intermittent.

And when you are out, stop at garage sales and what not. (Table cloth, linen, like new: $8) Lower rent auction houses, which buy whole estates, often have "junk sales" of all the stuff they cannot actually auction off profitably, for pretty cheap (ask them when), and auction houses often sell off "undistinguished but solid" furniture peices at quite reasonable rates (You-haul): auctions can be *excellent* deals and are fun time out besides.

"Incidentally, I live carless in DC, though, and find it pretty tolerable. For what it's worth, I think Washington's Metro is better than NY's subway, but the bus system is worse." -- Mike Beversluis

Having lived 10 years carless in each city I have to respectfully disagree. NYC subway is vastly superior to the toy train system DC has. Trains go more places in NYC, are more frequent, are much larger (of course they would have to be) don't have the punishing "price-by-distance" nonsense that DC has AND the trains run 24-7 meaning that you can still make it home after going out on the town... Unless things have changed, you can't party hardy in DC and expect public tram to get you home... (and getting a cab in DC when you want one? Please!....)

Now a little gripe about JaneGalt's statement that DC and NYC have comparable housing prices. Huh? Maybe if you restrict yourself to Georgetown or Dupont Circle within 2 blocks of the Circle or that little rarified part of Capitol Hill.... But you can easily live in nice parts further up Conn Ave - by the zoo maybe -- or in Adams Morgan -- or over by the 13th street Metro and find significanlty cheaper housing - especially on a square foot basis.

Of course you could, heaven forfend, live in NoVa or in MD and get even more bang for the buck.. but then you would have to shell out like "2 starbucks" everytime you came and went.

"On the other hand, it's hard to mock up the Parthenon in your back yard."

Please. You want to see Greek stuff, go to the Metropolitan Museum. It's not quite the same as the Parthenon, but it's at least as close to the Parthenon as a flat-panel plasma TV is to your old TV.

Really, travel is at LEAST as much a luxury as an expensive TV. And travel is over in 2 weeks, after which all you've got is a few 4x6's from Walmart. Flat panel TV is forever (or a couple years until the next generation comes).

You might want to give DC a second chance -- I lived very well just across the river from the Pentagon on a low salary just after I got out of college. They built a lot of solid but cheap housing over there during WW2 for all the Pentagon workers. It's just a 10 minute drive from the Smithsonian, Mall, etc. Yes, you would have to drive, but I suspect the monthly payments on a used Kia or Hyundai aren't too substantial. Like I said, I did it on an entry-level white collar salary and I had plenty left over. Of course, I was just doing "normal" saving for retirement rather than the "millionaire next door" insanity the folks on the last few threads have been pushing.

Don't be so modest:
--Miserly is the new lavish--

"Because in my chosen field, economics journalism, I basically have two choices: New York, or DC"

Of all the professions in the world, why can you not perform your duties from Nova Scotia or East Fencepost Iowa?

I have spent half of my career telecommuting and working off-site in software development and electronic design. Why on earth do you have to go to the office each day? So your co-workers can view your un-tear-stained porcelain cheeks?

Granted, there is a lot that can be gained from face-to-face contact in a work environment, but most of what you probably do (and all of what you do on this site) could be done over a 2400-baud modem from any corner of the earth you choose.

I suspect you just like and are accustomed to NYC, and are willing to justify the high cost of living there. Not that there is anything wrong with that - this is a free country - but to state it as an unavoidable fact that you have to be in NYC to write is a stretch. But I guess the stock answer is that your employer demands physical presence - otherwise you could be sitting there in your pajamas petting your dog while you worked - god forbid!

In my experiences teleccomuting, you can be 3 or 4 hours out of the city in beautiful, inexpensive surroundings, and commute 1 or 2 days a week to the big city for a lot less that actually establishing a domicile near one's urban employer.

"Incidentally, I live carless in DC, though, and find it pretty tolerable. For what it's worth, I think Washington's Metro is better than NY's subway, but the bus system is worse."

Doesn't the DC Metro still close late at night? That would be a problem for some people I know.

Speaking as a "downwardly mobile" household, I have found the series very informative, interesting, and inspiring.

My wife and I gave up something like 60% of our income for the sake of being happy; best decision we ever made. But learning to live within our new means has been a real struggle.

Thanks, Jane!

Joe Schmoe makes a good point. Some people live in expensive areas because they want to be closer to their family. Actually, I can understand the "want to be near my family" better than I can "gotta have that culture and lifestyle."

I live in the San Francisco Bay area because my parents live here and I am their only child. They are getting on in years and not in the best of health. It would break their hearts if I were to move away, and it would break my heart to leave them behind. So even though I could afford to buy a house somewhere in the Midwest, I'd rather be near my family.

John Thacker -

Yes, the Metro closes so absurdly early it is useless for those who want to party in DC and not get a DWI. The rail service to the 'burbs of MD or VA is even worse. Last train out is like 6PM.

It adds insult to injury that like 60% of gasoline taxes in Maryland ("The Free State", LOL) go to public transit rather than roads.

When I read this series I felt this urge to shake my laptop in front of all my neighbors buried in their shopping bags at Starbucks and yell "See!!! Doesn't this make sense?!?!" Unfortunately I tripped on this girl's Louis Vuitton and made her spill her half-cap-decaf-no-foam-double-soy-chai latte on her Burberry-donned puggle, and had to make a run for it before I got sued. Maybe next time...

Lab Rat -
I'm somewhat skeptical of telecommuting. It's been pitched as the Next New Thing for at least 15 years, yet the percentage of workers who telecommute remains very low. Either employers are reluctant to accept telecommuting arrangements, or workers who try it just don't like it, but something's going on.

Yes, eating out all the time makes sense (if one has the disposable income) if one finds cooking to be excessively bothersome. On the other hand, if one finds cooking to be a endlessly creative activity, then eating out becomes interesting only if it is the best way to spend time with a person of interest, or if the restaurant can teach you something.

I ate out almost exclusively for ten years. At age 28 I realized that I really wasn't enjoying it all that much, and that it cost a lot money at a time when I was starting another business which would take some time to produce cash flow at an acceptable rate. I decided then to learn to cook, and I found it a nearly perfect combination of intellectual, sensual, and aesthetic pleasure.

Is physics and chemistry interesting for you? Cooking provides wonderful excursions into those realms, and one gets immediate feedback from the experiments, and when the experiments are successful, the testing is as pleasurable as anything this side of the carnal; it helps if one is hedonistic to some degree.

I eat out rarely now, mostly when I am travelling, or for business when inviting a person to my home would be seen as excessively familiar or forward. On the other hand, when I sense that a new acquaintance is also a loves cooking, inviting such a person to enjoy a great meal in your home is a terrific way to instantly build a relationship.

Finally, if one loves a bottle of wine with a great, or even a good meal, eating out makes even less sense, given that the overwhelming majority of restaurants have either uninteresting or wildly overpriced wine lists. One can match bottle to meal much better and much more economically at home. And you get to choose the music as well.

Put in about ten hours with a basic cookbook and Epicurious and you can replicate anything you find at the local chain place.

Now all I need is some way to replicate the ten hours.

Why people live in metropolitan areas:

1. It is where the jobs are. NYC is home to 1/7 of all the medical residency programs in the US. Try being a speciality physician somewhere else. Washington, DC is the 8th largest metropolitan area but the fourth richest due to the concentraiton of knowledge workers.

2. Dual Incomes. Trying living in Burlington, Iowa and telecommuting if your wife is also a professional.

3. Contacts and education. Read about the Bobos in David Brooks. Sitting at home in a rural area is a good way to lose your skills.

Jane -

I'm having a hard time understanding the flack you are getting for what seems to be self-evidently good advice, when you make it clear that individuals should 'cut to fit' their own circumstances and tastes.

For my part, thank you - I was happy to send the original link to my son, newly in college.

'Who tells the truth should have one foot in the stirrup.'

Of course, you could get married, Jane...

Perhaps it's time to start smiling at the 5'8" guys with comb-overs?

Fully on board with JSinger - I love to cook, love to cook experimentally, but have three kids who (a) don't love to eat experimentally (yet, I hope)(and cooking two meals for the family gets very old, not to mention being antithetical to the "family around the dinner table" ethos I'm trying to uphold here) and (b) require breakfast, lunch, and dinner every single day of the freakin' year... Going out to breakfast at Denny's - yes, Denny's, or its equivalent - nets me no appreciable benefit in cuisine, but also no egg cooked onto my pans, no spilled-milk dishcloths that must be washed pronto or we'll suffer for it later, no "dang it, that was the last cup of coffee - start another pot, would you, hon?", no dishwasher jigsaw puzzle to solve... and, not incidentally, no $15 for eggs benedict like my favorite local breakfast place, which served me gelatinous Hollandaise last time (curses!). The downside is that I have to get dressed first, but heck, we all make sacrifices.

As for going out to dinner, even more so. Jane, spoken like a woman with no children. As Lileks said sometime back (his infamous "Olive Garden screed" if I'm not mistaken), you can do worse than Olive Garden, and while you might do better at a local non-chain (certainly we do do better thanks to the heavy Italian influence in our area), standardization is the friend of the traveler, at least. Furthermore, if you don't want to blow the cost of dinner again on babysitters, you may not have every opportunity to try numerous local restaurants in search of the gems. We've found our favorite locals more in the manner of stumbling on the nugget at Sutter's Fort than undertaking a minerals exploration program.

Will Allen, on wine: yes indeedy. One of our great joys here in the suburbs of Philadelphia is the bizarre liquor licensing system that makes many of our favorite restaurants BYOB without corkage charge - and at least one Mexican place (of the two or three that exist here, sigh...) BYO-Tequila.

Two things:

1) Common sense personal finance advice like Jane gives is great, except that in my experience, the people who read it usually already have pretty good financial sense. How many people who bought (or more likely, borrowed from the library) "The Millionaire Next Door" were already following its rules? I don't know how to get people who are financially uneducated interested in this stuff, interested in this stuff.

2) But one way to get a new perspective on finances is to get to know working poor people. I know quite a few as a landlord, and many are ingenious in the ways that they make a happy life on a low budget.

One other thing: nothing brings people down financially faster than a divorce with children. So think before you marry him or her; think before you have children with him or her; think before you divorce him or her. Going from one house to two crappy apartments sucks so bad, you might want to try to save that marriage, assuming it's savable (e.g. no abuse).

The flip-side of Brendan's comments regarding divorce is that the easiest way to boost your standard of living (for the professional types that populate this site) is to get married and not have kids for a while.

Reading the comments on this and other posts really drives home the fact that one cannot use economics to draw inferences about people's spending habits without making judgments about taste.

Jane voices the unstated preference -- that I share -- that a good family and a satisfying job are worth scrimping and saving on other things. But that is a preference. One could just as likely respond that it is better to have a high-paying but moderately unsatisfying job that leaves one with plenty of money and time to pursue interesting hobbies. And that the greatest indulgence is to wish to be "fulfilled" by one's work. Or even more cruelly, that it is better to be alone and friendless but solvent than to be poor and loved. Economics is inherently agnostic about all this. But human beings are not.

In the end, we do make choices and we do have preferences, so it is fair game to fight about those.

But after saying: "If you can't afford your current lifestyle something needs to change" We are left having to find out which expenditures impose the lowest psychic costs.

And being human, we will continue to judge the choices of others against some personal template of "good" and "bad" spending. So long as we don't get to order others around by fiat, why not argue?

Besides I think that all you people with Ipods are ridiculous. Better to listen to 5 good records on a $5000 turntable than 1 million dumb songs on a cheap MP3 player. :) :)

I love NYC, but will gladly stay in DC and visit only on occasion. And, yes, for some of us in our chosen fields there are only a few choice cities we can ply our craft in. Kind of hard to due foreign affairs work, especially sensitive stuff, from De Moine, Iowa. Plus, for those Gen X and Next fast movers who want to be cutting edge and at the front of the pack, you CAN'T do that from anywhere but those realy expensive cities. I've resigned myself to hemoraging cash on overpriced apartments just because that is the cost of doing business.

Now, here is another oddity I have real trouble grasping: Bedroom communities way outside urban areas. My Dad works for a firm in one of the Arlington urban villages (Clarendon)just outside of DC, but built a big-old house way out in Fredericksburg (60 miles south and the unnofficial demarcation of the "South"). He actually drives to work every day up 95 (for those who have not had the pleasure, its the 3rd or 4th worst traffic jam in the US, Starts at 6 am and ends on Saturday)and back again, and considers this normal! That is true insanity. Give me my noisy little apartment and Metro trains any day.

BTW: NYC does have better routes and much better schedules, but it's just way more polite and civilised on the Metro.

DC Metro runs until midnight on weekdays and 3 AM on weekends. And start up at 5 AM on weekdays and 7 AM on Weekends.

There's now also a Flexcar program, for when you absolutely have to buy something at Costco.

I really liked these posts.

It is quite interesting to read these comments. My observations after working in Northern NJ, New York City, Connecticut, San Jose, Honolulu and now living in a large suburb of Sacramento are as follows.

1. Most of the white-collar work can be (technically) done from anywhere in the world as long as you have access to reliable power and DSL or equivalent. The problem is two-fold: convincing your boss, and being unable to move up in corporate ladder. You have to be close to HQ and involved in daily politics and power struggle to survive. However, for most people, it would be an acceptable choice.

2. Not everyone in a company or group can do telecommuting. Some people in a company can successfully do it, others lack discipline and need more reinforcement/guidance. But for some lucky souls, as three of my friends are doing it successfully in a major IT company, it is working. One is in India working from his parent's home, other is in Colombia, and third friend is in Brazil. All of them show up here on average ten times a year for a week on their dime.

3. The key factor for all of them is that they like what they do, their skills are in strong demand, has politely negotiated with their boss, has a strong team here, has no desire to move up the corporate ladder, and save substantial money in the process (up to $90K or so per year is tax-free from Uncle Sam). All of them own home mortgage-free where they live.

4. This is definitely not going to work for people who are at entry-level (0-6 years) in their field, such as the resident doctor, or the economic journalist here. To learn, you have to be at the cutting-edge with the stars, which unfortunately only major metropolitan cities provide. So, in my view, you should make a point to enjoy the life there. Once you gain the experience and you think that your skill-set is valuable for the employer, you can make a move to more affordable and enjoyable places. That is exactly what I did. I still think New York was the best and most intensive learning place for me. But, I do not think I want to be on the treadmill forever. I am getting old and need to enjoy the life too.

If you read the book "The world is flat" by Tom Freedman, you will appreciate/hate the technological impact on white collar jobs.

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