It’s a big career arbitrage opportunity: Move to a big market to multiply your earnings; then flip to your dream city and take the wages with you.
I was at lunch with a fellow Midwesterner and he said he’s learned that talent isn’t all that different from place to place, even though titles, prestige, and earnings are.
He claimed that any of the top 20% of car or insurance salespeople in a small, sleepy market like the one we came from could move to a hot market or better industry and crush it selling enterprise software or doing VC deals.
I think he’s right.
Even doing the exact same work, moving from one place to the next can produce insane returns. An HVAC repair person in a dying rust-belt town can easily double or triple their earnings just by relocating to a city with a housing boom.
It’s not just the increase in demand for your labor. Capital is more productive when surrounded by complimentary capital. Human capital in a place with robust infrastructure can earn more per unit of productivity, but also can become more productive per unit of time. It’s a double win.
Is there a catch?
Maybe. You can get caught in a ratchet. You move to an opportunity-rich place and level up your earnings, but cost of living also goes up. So do expectations and lifestyle inflation to stay level with your peers. You might feel trapped without a noticeable life improvement even if your income expands.
In fact, some firms create this kind of squeeze on purpose. I knew a guy at a mortgage company that pressured employees to buy luxury cars, because they said it made them more respectable to clients. The real move was to get employees in financial situations that required them to keep earning the relatively high wages they paid, so they could keep them from leaving. Fine if you want to stay anyway, but suffocating if you’re not feeling the work.
Fancy firms do this in other ways. Sometimes they have an upward track but require an MBA to move ahead. It’s not because MBA’s make you a better manager, and not just so clients will be impressed. It’s also because the MBA means you have financial pressure, or a social pressure to “make use” of the MBA, so you stick around longer than you might.
Student debt of all kinds is a major early career trap. If your plan to level up your income involves taking on debt, rethink it. A simple move and some hard work will do more.
Have your cake and eat it!
You can level up your earnings and avoid a permanent lifestyle trap.
Even if a big, expensive city isn’t in your long-term plans, it doesn’t mean it shouldn’t play a part.
Move to a large, opportunity-rich city. Spend a few years proving your value. Then transfer those skills, connections, and pay level to the city of your choice and work remotely. Or find an up and coming company there where you can be a relatively big fish. Or freelance.
It takes deliberate focus, but it works. My wife and I did it.
We lived in small town Michigan. We knew we wanted to raise our family somewhere else, but we weren’t quite sure where. And we hated Washington, D.C., but there were a few great opportunities there. So I took a job doing something similar to what I did in Michigan, but for nearly twice the pay.
Going in, we committed to leaving D.C. after three years and picking a place we really wanted to live. This gave me a goal and a ticking clock. I loved my job, but wanted to work remotely. I knew they wouldn’t let me from the start, but if I could crush it and prove value I might have the leverage I needed.
It worked. I never asked if I could move, I just told them I was moving but my performance wouldn’t suffer. They didn’t want to lose me so they didn’t try to stop me.
It only took two years. And I’d gotten a few raises. By the time we picked our place near Charleston, SC, I was making two and a half times what I made in Michigan. I also had schedule flexibility and lived in a place we loved.
The shortest route is not always a straight line.
The thing is, if we’d identified Charleston as our ideal place back when we lived in Michigan, it wouldn’t have worked. Charleston is more expensive than Michigan, and there weren’t a lot more opportunities there than where we were.
By stopping off in very expensive but opportunity-rich D.C. first, we were able to leverage that to the city of our choice. We were able to leapfrog a lot of middle steps and time. Staying put would’ve meant many more years to climb the income ladder, a lower ceiling, and less flexibility. By giving up the perfect city for a few years and suffering high-cost of living, we were able to move several notches fast.
You say limit, I say opportunity.
Geographical constraints on career growth are real. But they can be arbitraged into opportunities. Today, remote work is on the rise. So is freelancing, and “lifestyle design” generally.
But you can’t assume people are going to want to pay you a high wage to work the hours of your choice and live wherever you want until you prove yourself. When you’re getting started, that probably means moving to where the best opportunities are and showing your stuff.
Keep yourself in a position to do so by avoiding debt (there are better ways to get a job than degrees anyway.) Be open to moving to a place even if you’re not in love with it.
Even if your hometown is the place you want to eventually settle, get out for a few years, and when you come back you’ll return as a high-value killer, not just a small-town kid.