One of the biggest life decisions you can make is where you choose to live. In the United States, your physical location has impacts on cost of food, cost of commute, property taxes, income taxes, sales tax, home prices, auto/home insurance, and many other expenses you would never even think about. In your wealth accumulation years you may find that you need to live where you can maximize your income even if it isn’t your preferred location.
As you approach a life of FIRE (Financial Independence Retire Early), choosing a location not tied to the need to be near “work” begins to open up endless possibilities. Some people will choose a life of constant travel in one form or another. That may mean RV living or short term rentals around the country or globe. Having two girls under four years old at the time, we decided that for the next 15-20 years we wanted a home base.
Background on our FIRE move (Skip it if you don’t care)
Before I dig into how we ended up in the Panhandle of Florida, let me take a step back to where we came from. I was born in a small town near San Antonio, TX and although we moved a few times in my life I was always within an hour or less drive from San Antonio. My wonderful wife moved from Oklahoma, but spent about half her life in San Antonio. Although many tourist will think of San Antonio as the home of the Alamo and River walk, if you spend a little more time exploring you will find a lot more. With nearly 1.5M people, it is one of the fastest growing cities that is diverse in culture and industry. Most of my working career was spent as a leader in the Web Hosting/IT world, which is something you would expect to say about Silicon Valley. Austin is only about 1 ½ hours away by car as well, which is a little more well known for technology companies. If you have never had Tex-mex food then you are missing out. It is hands down the one thing we miss more than anything about San Antonio. This area of the country is growing significantly due to an influx of people from other parts of the country, like California. No state income tax along with a relatively low cost of living makes this a great place to earn money. You may be asking, “So why did you leave Rusty?” San Antonio is hell for anyone that suffers from allergies and it is pretty normal to have 40-50 consecutive days in a row of temperatures above 100 degrees. As a bit of a country boy, I also didn’t love the growing traffic congestion. The final driver came down to my desire to have more land with some sort of water feature (creek, river, pond). I bought a vehicle from a guy in New Mexico who told me something I will never forget. “Texas is a great place to earn money and a terrible place to own property”. He made his money working in Houston and then retired to New Mexico. All states make their tax money in one way or another and Texas makes a lot of it on property taxes.
Building your own search criteria
I can’t tell you where you should live, but what I can do is help you find the criteria you can use to make that decision. I will also share my own answers to these questions right after this section.
How we chose the Florida Panhandle
After watching our Texas Property taxes (and assessed values) climb over the past 20 years we knew that owning a large portion of land would just mean having a massive tax bill. Paying taxes on something I already own to the eventual point where you can’t afford to own it just doesn’t make since to me. I also don’t want to pay a HOA so they can tell me I need to cut my grass or not park a car in my yard. In fairness the tradeoff is my neighbor needs to cut his lawn more often, but I can’t see his yard from my house so I don’t care. Texas does have agricultural exemptions currently, but if I was a betting man I would say that will be harder and harder to keep in the future. Around the San Antonio area you were able to find 20-150 acres with a nice home and water feature for around 600K around 2005, but by 2016 they were up to 1.3-1.5M. Ouch! Here is our search criteria:
Based on our criteria we looked at Arkansas, Tennessee, Louisiana, Mississippi, Florida, New Mexico, and other parts of Texas. For anyone looking in Tennessee, they do actually have a state tax that you will rarely hear about. The tax is 6 percent on all taxable interest and dividend income over certain amounts. Florida can be quite expensive depending on where you live, and natural disasters can be a concern, specifically hurricanes. We are several hundred feet above sea level, further reducing our natural disaster risk. The panhandle area offered small town living within an hour and some change of multiple airports. The town, schools, and parks are all within minutes of our house. The state makes a lot of its tax revenue from tourism, so our property taxes moved from one of our highest budget items to one of the lowest. Summers are far more mild than Texas and we are thirty minutes from the top rated family beach in the country with blue water and white sands. Property prices were about 40-50% less and that picture is our every day view of our 10 acre natural lake. Gas prices are higher by about 10%, food prices are higher than we were used to with the lack of competition, and sadly Costco is two hours away in either direction. Thankfully we plan to grow some of our own food and will likely add chickens for eggs. The lake is both a source of enjoyment and fish.
If the idea of living in the country and having to drive two hours to Costco isn’t your thing, but the rest of Florida living sounds good you will find plenty of cities that offer a different experience. We love our new home, but I do miss cheap groceries and breakfast tacos.
Things to keep in mind
Find your Happy Place
Armed with your own answers, it is time to hit the internet and begin your search. I found that searching by bands of the country seems to be the quickest way if weather is important to you. We could have ended up in just about any southern state based on our climate preference. After that, start narrowing things down by how the states make tax income in relation to your income/spending plans. Home or rental prices, schools if important, crime statistics, and all the other criteria will help you find some possible locations. No matter how amazing things look from a thousand miles away, use your criteria to narrow things down. When you find a few good candidates, use your valuable vacation time to visit. Go for a week or two if possible and do non-tourist things. Shop at the grocery stores, go to the local parks, to a movie theater, and anything else that will help you get to see what it is like to live there. Happy Hunting!
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