22 May 2022

Cost of living

Quantifying quality of life, inevitable costs and the price of optionality

There are certain types of people who are attracted to the big cities.

New York, Seoul, Sydney, Tokyo, Bangkok, London, Hong Kong, Berlin,  Singapore, Shanghai, and Mumbai.

As much as these epicentres are known to be great places to visit and explore, they are also infamous for being disproportionately expensive to live in.

Using a primitive analogy of supply and demand to explore this, the greater the demand for a particular resource, the less available supply there would be, which results in increased prices. In any one city, this would carry across various domains — real estate, food and water, kitchen appliances and so on.

Everyone seems to know about what makes these cities great, and yet there is a hesitation when it comes to the question of, ‘would you live there?’

In dealing with this question, the very first thing that is called to my own mind is cost of living. How much do houses cost? What are the minimum weekly expenses like? How much money could I save? These are the make-or-break questions.

Of course, it is important for one to consider the accounting of expenses. The minimum bar to cross is, ‘can you generate more income than what you expend?’ If no, then question how much do you really want to make things work in that particular environment. Are you really willing to pay the price of living in a big city?

Most of the time, we cannot control costs. No matter where you are or who you are, there is no way to avoid the costs of being alive. But what we can control is the price we are willing to pay for everything. We can choose and decide whether a price is acceptable or not, and this largely comes down to our own individual appetites and circumstances.

Do you want to live in a big house on an isolated farm? Or could you live in a shoebox apartment squeezed into one of the many skyscrapers in a big city?

It seems to be way easier to discredit and push aside the idea of living in a big city based on all of the quantitative measures of cost of living, without even considering the quality-of-life metrics — which are far more subjective and harder to measure.

How do you quantify the difference between walking to a coffeeshop versus having to get into a vehicle? Or the spontaneity that comes from all kinds of people going about their own business on every street and in every corner versus not? Maybe these do not matter to you at all, which just serves to reinforce the point: quality-of-life can be subjective.

The types of people who choose to make it work by living in a big city, therefore, are people who make similar broad choices. Of being willing to pay the price of living with smaller and more expensive real estate, more noise in exchange for having more optionality. Of having the guts to make a life for themselves regardless of the burning costs of living.

There is a certain level of courage and self belief in saying to oneself, ‘I will earn more than I will expend.’

‘I will make more than I will consume.’

‘I will pay any price for what I really want, and not surrender to compromise.’

‘I live here because it is cheap.’ No. I live here because I want to.

The tendency is to want it all, to have the quality of life that comes from being immersed in an epicentre of options (and all the noise, odours and general chaos that comes with that), and pay the minimum possible price — financially, emotionally, physically and spiritually. But unfortunately, this is an impossible dream.

As explored previously in ‘Layer cake’, the more utility we try to squeeze into our lives, the more complicated it becomes.

On exactly the same day I wrote this post, this video came up perfectly timed on my feed.

I used to be a hunter, so I thought I had considered “death” a fair bit. But then I got terminal cancer and had a chance to talk with other people in a similar situation and I started to think more about “living”.

It changed from “what does it mean to die?” to “what does it mean to live?”

 — Hiroshi Hatano