I disagree with this assertion. Say you move to a lower cost of living area, say 6% cheaper, and your wages decrease by the same amount as the change in COL.
Now all your expenses are 6% lower, but your money left after expenses is also 6% lower. That means that despite being no worse off in terms of quality of life, your savings went down 6%.
Strictly speaking, if you maintain the same relative ratio of costs to savings, it’s always rational to take the highest income, even if it’s in a higher COL area. This is because costs can be measured as a percentage of income, but savings ought to be measured as an absolute value.
Exactly. This is why it's a pretty good idea to move to Silicon Valley when you're young, rent out the cheapest room you can find, get a job at FAANG and bank 75% of your salary. After 10 years you will have a nest egg and resume that allows you true freedom in what you want to do going forward.
Now all your expenses are 6% lower, but your money left after expenses is also 6% lower. That means that despite being no worse off in terms of quality of life, your savings went down 6%.
Strictly speaking, if you maintain the same relative ratio of costs to savings, it’s always rational to take the highest income, even if it’s in a higher COL area. This is because costs can be measured as a percentage of income, but savings ought to be measured as an absolute value.