The Best City In The World To Make Money: San Francisco

If you want to get rich you need to go where the highest paying jobs are. The highest paying jobs come from the fastest growing, economically strongest companies.

According to a Deutsche Bank study of over 50 cities in the world, San Francisco is the #1 city to make money. Since 2018, average salaries in San Francisco have risen by 31% and by 88% since 2014.

Damn, since I live in San Francisco, I really should have kept working instead of retiring in 2012. I could have been so rich! Alas, there’s always the next life to fix my current mistakes.

With company giants, such as Facebook, Google, Apple, Uber, and Salesforce, all paying healthy six-figure salaries on average, it should come to no surprise that San Francisco is #1.

In 2019, people in San Francisco can expect to be paid an average of $6,526 per month or $78,312 a year. Put two of these people together and you’ve got a healthy $156,624 a year in combined income.

New York residents, on the other hand, make 29% less than San Francisco residents at only $4,612 a month. However, comparing New York to San Francisco is a little misleading given NYC has a 10X larger population. Comparing San Francisco to Manhattan is more apples-to-apples.

Let’s take a look at the rest of the cities on the top 10 highest paying cities list. See if you can guess which other cities are on the list before proceeding.

The 10 Highest Paying Cities

1. San Francisco, U.S.
   Monthly salary: $6,526
2. Zurich, Switzerland
   Monthly salary: $5,896
3. New York, U.S.
   Monthly salary: $4,612
4. Boston, U.S.
   Monthly salary: $4,288
5. Chicago, U.S.
   Monthly salary: $4,062
6. Sydney, Australia
   Monthly salary: $3,599
7. Oslo, Norway
   Monthly salary: $3,246
8. Copenhagen, Denmark
   Monthly salary: $3,190
9. Melbourne, Australia
   Monthly salary: $3,181
10. London, U.K.
    Monthly salary: $2,956

The biggest surprise on this list is Chicago at #5. With terrible weather for half the year, bad local government, high state income and property taxes, and one of the highest murder rates in the country, I would have thought Chicago would be outside the top 25 for sure.

But there is a huge silver lining for Chicago residents: great value.

The median property price in Chicago is only $226,400 compared to ~$1.7 million in San Francisco. Yet pay in San Francisco at $6,526 is only 50% higher than pay in Chicago. If you can withstand all the negatives of Chicago, Chicago is a great place to make your fortune.

It’s no surprise London is on the top 10 list. But I am surprised London is 10th and not higher. According to the Deutsche Bank study, income for London residents was 13% lower partially due to the ongoing Brexit debacle.

I’ve been to London several times, and each time I go I’m amazed by how much more expensive London is than San Francisco and New York City.

Cities With The Highest Monthly Rent

1. Hong Kong
   Monthly rent for average 2-bedroom apartment: $3,685
2. San Francisco, U.S.
   Monthly rent for average 2-bedroom apartment: $3,631
3. New York, U.S.
   Monthly rent for average 2-bedroom apartment: $2,909
4. Zurich, Switzerland
   Monthly rent for average 2-bedroom apartment: $2,538
5. Paris, France
   Monthly rent for average 2-bedroom apartment: $2,455

Everybody likes to complain that San Francisco rent is too damn high. But people who complain forget the other side of the equation: income.

The worst combination is when residents live in a city with high rent and low income. Hong Kong fits this bill perfectly.

I’ve been to Hong Kong over 20 times for work and it is congested, hot, and polluted. Average earnings for Hong Kong residents came in under $2,500 according to the Deutsche Bank analysis, but rent costs were $3,685.

Think about this for a bit. The average rent for a two-bedroom apartment is 47.4% higher than the average salary in Hong Kong. How is it even possible to live and start a family?

The only solution is to live with your parents or live in a one-bedroom or studio apartment.

Below is an example of a “nano-apartment” measured at 128 square feet. The average cost of an apartment is roughly $3,000/sqft. Therefore, expect to pay over $300,000 for this apartment below. You’re basically in a capsule!

The second poorest value city is Paris, given it is in the top 5 highest rent cities in the world but not in the top 10 highest paying cities in the world. Paris didn’t feel nearly as expensive as London when I visited several times.

Cities With The Highest Disposable Incomes

Deutsche Bank calculates disposable income as income left over after paying rent. The highest disposable income list is what matters most. At the end of the day, it’s what you keep and not what you earn.

1. San Francisco, U.S.
   Disposable income after rent: $4,710
2. Zurich, Switzerland
   Disposable income after rent: $4,626
3. Chicago, U.S.
   Disposable income after rent: $3,298
4. Boston, U.S.
   Disposable income after rent: $3,188
5. New York City, U.S.
   Disposable income after rent: $3,157
6. Sydney, Australia
   Disposable income after rent: $2,615
7. Melbourne, Australia
   Disposable income after rent: $2,485
8. Oslo, Norway
   Disposable income after rent: $2,342
9. Copenhagen, Denmark
   Disposable income after rent: $2,285
10. Wellington, New Zealand
    Disposable income after rent: $2,075

The analysis assumed two working people were sharing a two-bedroom apartment, and calculated disposable income by working out the difference between average monthly earnings and half the cost of renting a two-bedroom apartment.

San Francisco comes out on top with disposable income after rent at $4,710, which is a whopping 100% more than Oslo, Copenhagen, and Wellington, and 49% more than New Yorkers were expected to have leftover.

Being #1 on the disposable income list is the reason why I believe San Francisco is also the cheapest international city in the world. Prices tend to converge among international cities. Therefore, I’m also a long-term bull on San Francisco real estate.

Make Your Money, Then Move

If you want to get rich, you should probably come to a city like San Francisco. Yes, the cost of living is high, but you will get paid accordingly.

It’s not like Hong Kong or Vancouver, where you have to pay crazy high real estate prices, yet get paid way below what a commensurate income level should be to support such high real estate prices.

Like every city, each has its problems. San Francisco has a traffic problem, a homeless problem, and a cost of living problem for those who do not make the average wage.

But overall, if you are a capitalist, San Francisco is clearly the #1 city for opportunity. Further, San Francisco is diverse, accepting, and has comfortable weather all year. I’ve lived here since 2001 and give the city a thumbs up for fortune hunters.

If you don’t want to come to San Francisco, that’s fine. Go to New York, the best city in America for six months of the year. If neither of these cities appeal to you, make your money in one of the other highest paying cities in the world. As you do, save aggressively, invest wisely, and leave once you’ve had enough.

We’re planning on relocating to Honolulu once our boy is eligible for kindergarten. The average wage in Honolulu is much lower, but it doesn’t matter because we’re not working day jobs anymore.

Americans don’t know how truly great our living arrangements are until we live abroad. Let’s appreciate all our great country has to offer!

Related posts:

Housing Expense Guideline For Reaching Financial Independence

How Do People Survive Off Less Than $100K In A City Like New York?

The Best Area To Buy Property In San Francisco

The People Who Make Over $1 Million A Year

Readers, if people want to get rich, why wouldn’t they relocate to one of the highest paying cities in the world? How is your city for money-making opportunities?

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