A technician (not pictured here) who earned $ 175,000 didn’t add to his savings until he moved to Phoenix from the Bay Area.
Ayush Sharma / EyeEm
- Kyle, a 34-year-old technician who makes $ 175,000, lived a HENRY life in the Bay Area before the pandemic.
- He was well paid and not yet rich. He paid $ 2,500 in student loans and $ 4,300 in rent every month.
- He saved less than $ 10,000 a year and put away $ 80,000 after moving to Phoenix to work remotely.
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Kyle used to be a HENRY, short for “high earners, not yet rich”.
Now, the 34-year-old technician who refused to publish his last name for privacy concerns is well on his way to building wealth thanks to the world of remote working.
After completing his doctorate, he spent the last five years as a big data specialist in California in the tech scene. He made $ 120,000 on his first job in 2016, according to an Insider-verified payroll, and increased his salary at his next company after moving to the Bay Area.
But Kyle saw little of his six-figure paycheck and found himself in the HENRY lifestyle. HENRYs are typically millennials in their early 30s, earn over $ 100,000, and live in urban areas. They often feel like they have to live from paycheck to paycheck struggling to save, either because they fall prey to lifestyle sneaking and live beyond their means, or because they have a high cost of living today in an economy where the $ 100,000 is no longer what it used to be.
In some cases, like Kyle, it’s both.
“My personal anecdote is that some people get too immersed in the patterns of their current lifestyle,” he said. “Sometimes it has nothing to do with material costs.”
He said his money was typically spent on sky-high rents, $ 2,500 a month in student loans, and large items like furniture and kitchen utensils on his credit card. He was caught in a vicious circle of debt.
After spending a few years paying it all off, he said the pandemic struck. It opened up a game changing opportunity: he got a new job with permanent remote work and a base salary of $ 175,000 per payroll. It enabled him to trade in for his hometown of Phoenix in the Bay Area last September and give up his HENRY lifestyle.
“I have more than halved my cost of living,” he said. While he typically saved between $ 5,000 and $ 10,000 a year in California, he added, he lost $ 80,000 last year. “Work-from-home offers young people an unprecedented opportunity to break out of the debt cycle.”
Confessions of a Former HENRY
Kyle said he couldn’t imagine going back to work in the Bay Area after the pandemic.
“Looking back, I can’t believe how inappropriately expensive everything was,” he said. “Cost didn’t seem to be a major issue at the time as I was getting by on a technical salary, but I was certainly getting paid by the accumulation of upwardly mobile assets like home ownership.”
The Bay Area is known for its notoriously high-priced real estate market, with New York City trading as the most expensive in America. Kyle said a 1,200 square foot craftsman house on the street he lived on sold for $ 2.1 million before the pandemic housing boom, and that type of home inflation only made the road to home ownership even more difficult.
A friend of his, he added, has been struggling to buy a home in the area for over a year and recently lost an offer on a townhouse after making an offer of $ 60,000 above the asking price.
Kyle said he spent $ 4,300 a month renting a two-bedroom, two-bathroom apartment in the Bay Area. He eventually became a homeowner after moving to Phoenix, one of the migration hotspots of the pandemic, where he pays $ 1,043 a month for his three-bedroom, two-and-a-half bathroom mortgage.
His other monthly costs have also dropped immensely since moving. Based on his bank statements, he estimated he was spending $ 3,700 a month on top of renting in the Bay Area, which now looks more like $ 1,500 a month in Phoenix.
Kyle said he still longs for California, misses the food and social activities, but doesn’t miss the cost of living and traffic.
“There is a huge financial opportunity for those with work flexibility to benefit from migrating to cheaper subways,” he said, adding that it is still difficult to convince people otherwise.
Kyle points out, however, that everyone sees benefit – an economics term that refers to the level of happiness that comes from consuming a product or service – differently.
“Measuring the cost of living (or lack of savings) without measuring benefits is only half the story,” he said. “I managed to improve on both last year, but for others it’s still a strict compromise.”
Do you have a story about your HENRY life? Contact Hillary Hoffower at hhoffower@insider.com.
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