Money magazine does a feature about the best places to live every year. I noticed this year that they did one section on the top earning towns. The magazine might have done this in the past as well, but I paid attention to it this year. Number one on their list is Hillsborough, California at $263,456 as the median income. Number 25 on the list is Southlake, TX at $152,991. So about $110,000 separates number 1 from 25.
Two questions spring to my mind and I’m pretty sure the first one isn’t mentioned anywhere.
1) What does the line look like and when does it start to flatten out? For instance, Hillsborough makes about 42% more than Southlake, but it is only 24 spots removed. Well, number two is Scarsdale, NY at $219,317, which is 16.75% less than Hillsborough. Number three on the list is Los Altos Hills, CA at $199,370, which is 24.33% less than Hillsborough. Number four on the list is Winnetka, Illinois at $195,879, which is 25.65% less than Hillsborough. So the flattening starts between three and four. But it is pretty amazing that number three on the list is a town that makes almost 25% less than number one. Of course you can manipulate medians and the numbers themselves are a little suspect. What I mean by that is a business owner has more worth than income most of the time. So Hillsborough is number one on this list, but a list that calculates net worth might have a different outcome.
2) What does the list look like you if you include cost of living? I currently live in the south where several expenses are cheaper than their counterparts in the northeast. Using a COLA Calculator from Money magazine here are the stats:
Wage in Atlanta, GA – $100,000
Wage in Stamford, CT – $153,222
That is quite a difference to maintain the same standard of living (about 34% difference).
Wage in San Francisco (closest I could get to Hillsborough), CA – $175,299 (about 43% difference).
Now lets compare number 1 with number 2
Wage in San Francisco, CA – $100,000
Wage in Nassau County, NY (an approximation of Scarsdale) – $87,131 (about 13% less)
Now the difference between number one and number two in earnings was 16.75%, so it looks like with cost of living adjustments that they are about the same (16.75% higher earnings, but 13% higher cost to live there). However, I used approximations, so I can’t say that definitively, but it at least deserves some thought. There may be a town that isn’t a high income town, but it is extremely cheap, making it a greater value place to live.
!!! I just saw that the article does include Buying Power, a component of Cost of Living, but the list doesn’t seem to take into account that aspect. I will have to review it and update this entry !!!