With some success and perhaps luck, the salary differential may be more than enough to make up for the increased costs associated with these large cities.
Arbitrage, the practice of taking advantage of different prices in different markets, is a strategy that can be employed in personal finance. There’s tax arbitrage, dividend arbitrage, and apparently a Richard Gere movie called Arbitrage.
Many of us prefer to live in larger cities, which creates a larger physician supply and lower demand for our services, driving down the salary potential. Fortunately, some physicians would rather be surrounded by farmland and feedlots rather than freeways.
It’s helpful to know that you can earn 15% to 20% more by living in middle America. Salary is only one component that helps determine your ability to boost your savings rate; expenses are another key factor.
Clearly, compensation and your ability to save are very important to your financial well-being, but they are not the only considerations in your overall well-being.