I was viewing Wikipedia’s List of poorest places in the US.. One thought that crept into my mind was that some of these places might be an early retirement paradise - pinch pennies for a few years, build up a huge cash savings, then plow it all into dividend stocks and bonds earning $4k a year, then live like a damn hell ass king in a place where the average income is $1.5k.
Sure, some places are probably crime-ridden hellholes, but there are a few places on the list in the upper midwest and in Alaska that I would imagine are quiet rural communities.
What’s the real story on these communities? Are there places in the US where you can live a reasonable lower middle class life on $5k a year, or are these statistics coming from large numbers of homeless people and people who share a basement with 5 other people and can’t afford shoes?
The Wiki article mentions reservations and you would expect per capita income to be extremely low because there are very few jobs and the tribe usually takes care of its members via federal funding or by selling resources such as timber, oil or land.
As far as the other locations, many appear to be extremely rural areas where subsistence farming keeps most families alive. There are no jobs and no industries to rely on so these people have no way to make money.
Having driving through a handful of these area they are not places that most people want to live and are way off the beaten path in inhospitable locations where water is scarce and the locals may not be friendly. There are no schools which means busing your kids a long way away or home schooling them. No grocery stores other than a mom and pop gas station.
While some people may choose to live in these low income areas I’m sure many of them would move if they had the skills to get a good paying job somewhere else.
You seem to be making the assumption that the low income is offset by lower cost of living, which is true in some circumstances, but in others it’s offset by a much lower quality of life. In other words, yes, people living in crime-ridden hellholes in substandard housing without access to healthcare, education, etc.
A large number of those communities are on Indian Reservations where there’s various tribal and federal programs that supplement people’s meager incomes to a certain extent, but the quality of life is still abysmal. The cost of living is low compared to most cities, but pretty comparable to any other very rural community. Unless lording your tiny retirement stipend over a bunch of even poorer people is a big attraction, you’d be better off moving to a more typical merely poor rural community instead of one of the poorest of the poor communities on that list.
Also, to expound a little bit more, part of why some of these places are so poor is because their remoteness makes it difficult to live and do business out there. Like dolphinboy mentioned, there’s no retail beyond convenience store type places which are overpriced and usually have poor selection and quality. Pretty much any other shopping beyond the most basic of foodstuffs, or any other errand at all, means a long round trip drive to a bigger community which might be a small town that’s not much better. Unless you’re very careful, fuel costs will eat up your housing cost savings pretty quick.
In other words, you have 745 people in about 1.5 square miles, and about 540 of them are under the age of 18. The per capita income is low because most of them are kids.
Your general idea isn’t a bad one, if you live in a place that tends to have higher incomes but also high cost of living and you’ve managed to sock away the recommended 10-15% of income into a 401k or similar plan throughout your working life you can definitely move to a lower income area and live a lot longer and “higher on the hog” with your nest egg than you would if you didn’t move.
Just as an example incomes in San Francisco, New York City, and Washington, D.C. are very high. So are expenses. If you’ve lived and worked in the NoVa/DC area your whole life and retire with the aforementioned nest egg to say, Roanoke, VA–you will definitely stretch your retirement dollars substantially. It especially makes sense in retirement. While the NoVa and DC metro areas are stupid expensive, it is because so many people want to live there–and that is mostly because there are jobs there (I contend unlike San Francisco and New York which are cool places to live, very few normal people would want to live in the NoVa/DC/MD area hell hole if not for the massive number of jobs there and the fact it has a strong base of jobs that are semi-recession proof due to being Federal government related positions.) So you may not be able to make a move like that while still working, because the chances of finding a good job in Roanoke are a lot less.
Roanoke isn’t the coolest city, but you could move to really nice cities like Charleston, SC and still realize a 30% decrease in cost of living compared to your life in the DC metro area. In fact it’s such a stupidly expensive area, you can even move to a trendy city like Portland, OR and realize a 20% savings in cost of living.
Yes, that’s one of the primary things I was wondering about. To some extent, you would expect that the cost of living would serve as a self-regulator and that people who literally weren’t making ends meet would be pressured to leave and go to an area where they can live for less or can make more - sure it’s not a perfect machine but a town where nobody can afford food is not going to survive - the fact that it has survived indicates that there is still a fundamental livability there.
That’s a good point. I was traveling on the prairies a while back and found an older sort of a fixer-upper farmhouse that was for sale and rather convenient to a plains town/small city (commute would be awesome and shorter than my current one) - and I realized that I could buy it for cash. Problem was, that would deplete most of my life savings, leave me with no buffer in case of hard times, and what am I going to do with my life there anyway? I’m not a farmer and wouldn’t know the first thing about growing corn or whatever. Not very many software development jobs there for sure. Maybe I could go and get an alternative-track teaching certificate and become a country schoolteacher - otherwise nothing but minimum wage stuff.
As an example, I moved from the SF Bay Area to Western Montana for a variety of reason, but one of the primary ones was a 20-30% reduction in the cost of living starting with no sales tax and much lower housing costs and property taxes.
Fortunately, I was able to keep my west coast job/salary so I continue to work full time and I am able to save more than I ever could living near SF. However if I ever lose my job I’m sunk because I couldn’t get a job earning half as much here.
Assuming that housing prices start to rise again I will never see the kind of appreciation I saw in CA, but since I plan to retire here I don’t really care too much about that.
Do I sometimes miss living in the Bay Area? Sure, but I visit there a few times of year (for business and pleasure) and sitting in bumper to bumper traffic for an hour reminds me of why I moved to Montana.
We have no traffic, SMOG or crowds to deal with here and that suits me fine. Others might say they could never survive the winters here and they would quickly become bored. YMMV.
Well, fortunately we’ve advanced as a country to the point that we don’t (usually) let people starve in the streets anymore. I’d suggest that most people would place the bar for “fundamental livability” somewhat higher than that.
In the case of the Indian Reservations, there’s a bit of a special case in that some of the assistance people are dependent on is only available if they stay on the reservation. So their economic prospects might be slightly better in a city, but not enough to justify forgoing those benefits and, perhaps more importantly, their family support network. It would be harder for someone on a small fixed income who doesn’t qualify for that assistance or who doesn’t know anyone to survive there.
No smog in Western Montana? Not during fire season!
To me, the anomalies in the list are Dixville, NH and the 3 in New York. When you look at the details, Dixville has a population of 12 and a median age of 76. The ones in NY are Hasidic communities with most women stay-at-home mothers and many men dedicated to religious study.
So, I suspect that the low income levels are not related to cost of living in those areas. Like Boys Town, it is the low number of workers.
Of course, if you move to Dixville, you get to vote first in presidential elections.
Another anomaly is Hildale UT and Colorado City in AZ (#68 and #99, respectively, on the list as of this posting). Colorado City used to be known as Short Creek.
That area the current home of the Warren Jeffs clan of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (FLDS).
And there are more anomalies if you dig a little deeper on Wikipedia. When you look at Wikipedia’s poorest county information, you come upon Kalawao County, Hawaii, with an average income of $9k. It turns out that that county consists of what remains of Father Damien’s leper colony and new residents are not allowed (I suppose it is enforced by the land being owned by the government and the government simply refusing requests to rent or sell), but people who were there before are allowed to stay. If it is really all government-owned land and new residents are not allowed, I imagine that they can set rent as low as they want or even make it “free”.
Lots of interesting thoughts in the thread, and an even greater inspiration to dig into the real statistics and real sources behind this stuff to figure out what is going on and what the real economic situations are.
And when you have a strongly religious community living in close proximity, you tend to see a lot of strong social support and may also see large families living together where you can have large numbers of people out of work and still not have anyone living on the street or in homeless shelters, just move in with grandma, Uncle Joe, cousin Betty, and your three littlest sisters and you’ll be fine, then when you find a job you can spread the wealth back when your brother loses his job.
I also wonder how these income statistics are calculated for subsistence farmers. Do they convert farm produce grown and consumed at home to dollars based on the prevailing market prices (e.g. you grew X bushels of corn for home consumption and the average market price for corn in the Tri-County Area was Y dollars a bushel, so you had an income of $(X*Y) from corn), or do they count them as incomeless?
I don’t know about the other religious communities on the list, but in the case of the FLDS those communities are hugely dependent on public assistance. Particularly since on paper every wife after wife #1 is a single mother with usually a bunch of kids. The FLDS’s habit of kicking out all the “extra” boys when they reach marriageable age undoubtedly doesn’t help the per capita income either, since the women definitely aren’t working.
Subsistence farming is pretty much dead in the US. Farmers still undoubtedly eat some of what they grow occasionally, but nobody is really subsisting off it in any meaningful way.
You can buy a home, but aside from that what expenses will you lose?
I’m assuming few of these places have good public transit, so if you don’t have a car you are stuck bicycling or walking. Not bad if there are shops nearby, but if not then you have a problem.
Plus you still have utilities, food, health care, etc. I don’t think those will be cheaper.
However if the ACA stands, and assuming they only test on income and not assets, then if you were dirt poor you could qualify for medicaid. So that covers health care.
But you still have food ($50-100/month minimum for an individual) and utilities (which wouldn’t be terrible, maybe $50-100/month minimum).
You’d still end up spending $400+ a month to live in a boring city with no car, rice to eat and nothing to do. But you could do it.
This guy does it on about $8000/yr. He retired at about 30. However I think he underestimates his expenses. What happens when the RV breaks, or when he is older and has actual health problems? Then again, a used RV is under 10k, so its not like it would bankrupt him (he seems to have about half a million invested).