A question I’ve been contemplating lately is whether we should continue living in the city center or move to a house in the suburbs. The distinction between a city and a suburb isn’t clear-cut. While a city is the core of a metropolitan area, a suburb is an area on the periphery of city limits. Generally, cities have large populations over a small area, but suburbs can have even larger populations of hundreds of thousands or a million residents — just spread across a lot more square kilometers.

Here are a few thoughts on the subject.

Lockdown Experience

The COVID-19 lockdown has given us a taste of how life could be without the noise and air pollution produced by cars, trucks and most of all scooters/motorcycles in big cities. As a person who works from home, it was fantastic to be able to keep windows open during the day, breathe fresh air at any time and even smell the sea when the wind was blowing inland. Along with those novelties, I started to cycle and exercise outside and found it extremely enjoyable. The streets were pretty much taken over by bicycles and runners in fact, and cycling shops recorded record sales during the lockdown months.

The day the lockdown was partially lifted was a big contrast. Cycling suddenly became much more dangerous and frankly, the noise and pollution killed all the joy of it. Moreover, being on lockdown also offered another perspective on how important or not it is to be surrounded by shops and activities as well as the importance of having a home that you enjoy.

I was born and raised in Malta, where the concept of cities and suburbs is blurred since you don’t really have a big central city; there are parts that look more like a city and others that feel more like rural living, but you never get the same feeling as living in a real city. Using personal means of transportation is a must and you get accustomed to needing 15-40 minutes to get anywhere important such as the university, work, beach, gym, etc.

City Life Experience

Although I’ve traveled a lot and visited many big cities, my first real experience of living in one was Barcelona, and I fell in love with the lifestyle instantly. I liken it to the experience of drinking Vodka and Red Bull mixed together (a favorite from back in the clubbing days in my early twenties although I wouldn’t recommend it). It’s exactly that feeling of losing some inhibitions and being more open to new ideas, plus the buzz and excitement of new opportunities that abound in a city like Barcelona.

Chiang Mai was another big city I had the experience of living in, although in a funny way it feels both more rural and way more congested and polluted than the typical city in Europe.

The upsides of living in a city:

• More meetups and new experiences than you can even keep up with
• Possibility of meeting an incredibly diverse set of people
• Being challenged in new ways and possibly having to face some inner demons. I see this as a good thing if addressed correctly.

Looking back, I can see how life in a city has taken all the attributes of my character and amplified them. That meant that I was able to advance very rapidly in work and fitness due to the people I met, inspirational work spaces and meetups, and the wealth of sports facilities, athletes, and coaches. On the other hand, it also meant that some of the weak points of my character were also severely put to the test.

For example, it has always been really important for me to have a safe space, which I usually found at home and more specifically my room at home. As long as I had that one comfortable space where I could shut off the rest of the world and recharge (reading, writing, video games, etc) I felt safe and at peace. I am very sociable but I need to be able to retreat to that space when I need to. Life in the city for the most part robbed me of that space. This brings me to the next point.

Life with Kids

When you have kids, you really need more space, and city apartments start looking much less attractive. Kids can still benefit of the proximity to things in the city and the multitude of things they can do, but home life can be challenging especially if one or both parents are working from home.

Then there’s the question of schools. In our case, we ended up choosing a school that was quite far from the city center. That means a longish commute to and from the school on a daily basis, which gets tiring and expensive if you’re using taxis. I’ve since learned that for young families, proximity to their kids’ schools is usually the number one factor when they choose where to live.

Safety

One can argue that life in the suburbs is safer. There are fewer people, less traffic, and potentially a stronger neighboring community. On the other hand, if you’re being targeted by thieves, a house can in many cases be more vulnerable than an apartment.

Pollution

Suburbs clearly win out on this point. There’s less noise and less air pollution when compared to life in the city.

Transportation

With most suburbs, due to the fact that everything is much more spaced out, you will need to have one or more cars to function on a daily basis. This can mean less time spent walking and biking; two essential activities for health. You might need to regularly drive back to the city if you attend any activities there such as gyms, music or art lessons, etc.

Depending on where you live, the suburbs might also be hilly parts which make moving around even more uncomfortable and oblige you to use motorized transportation. This is the case in Barcelona and its immediate suburbs, for example. Cities tend to rise around flat plains and access to water historically, so they are more or less flat and easy to walk around, although there are exceptions of course.

Bottom Line

The main points in favor of suburb life are less pollution, more space, and perhaps a safer environment. In favor of cities, we have easier access to hospitals, restaurants and other institutions. We have definitely more cultural activities and diversity.

School proximity is also a factor but since some schools can also be within the city it really depends on what school you end up choosing.

I am still torn between the two options, so if you have any thoughts and have tried both, please do leave a comment below.

Over the past years, I’ve spoken to many entrepreneurs and investors in my age group (35-45), and one of the questions I like to ask is what their net worth goal is, irrespective of where they’re currently at. It’s a question that is designed to make them think about what is the amount of money that would cover all their dreams at the moment and foreseeable future, while also being believable.

Interestingly enough, it turns out that almost everyone’s answer falls around the same figure: 10 million dollars.

Now, that’s a lot of money, especially if you come from a modest background. My net worth in my mid-twenties was practically zero, and if you were to talk to me about these kinds of figures they would have been hard to conceive. However, once you start forging ahead in your financial status, you start revising your goals and relationship with money.

Here are a few ways that people in this age group have been able to achieve that net worth figure:

1. Gain leverage at your job: become a unique and indispensable player in your company and in your industry. You can then break free of the typical salary ceilings that exist within any company and industry.
2. Open your own business: here you assume higher risk in the hopes of higher returns. The higher theoric risk is reduced by your mastery and knowledge of the industry. Put simply – you’re more likely to succeed than the rest of your peers, because you are already one of the best people in the space.
3. Start to invest: when the job or business starts to give off more money than you need for your living expenses, invest the rest.

Why is the $10 Million Figure So Attractive?

I believe that it is the most commonly mentioned figure due to being a nice round number, and the fact that most young entrepreneurs and investors tend to have amassed a few million during this age bracket, but have enough knowledge of their skills and the niche they operate in to see themselves getting to that $10 million figure. Sometimes it might mean having to sell their business, and that comes with its own disadvantages, but they typically see it as an attainable figure.

With $10 million dollars, if you have high aspirations and love the finer things in life, you won’t be set for life, but rather you will have a very nice platform to launch off from to even bigger things.

For example, you can afford to:

• Buy a very nice house in a great neighborhood, cash payment
• Get yourself some nice cars and other toys
• Send your kids to the best private schools
• Travel first class or even using rented private jets
• Eat out at fine dining locations regularly

It basically allows you to do whatever you want with your life while also giving you the opportunity to make some expensive capital acquisitions like a house and cars.

I describe it as a launchpad because I wouldn’t personally be sitting on my laurels at that $10m level without having a plan in place to double or triple it within the next decade. Cashflow is extremely important to sustain a high flyer lifestyle, and the biggest mistake one can do is to think they’ve made it when they hit a goal like a $10mm net worth, when in reality they have no cashflow.

That’s why getting a big amount of money from an inheritance, fantastic investment, or sale of your business is actually quite hard to handle. Yes, you end up with a lot of money, but if we’re thinking long term, upgrading your lifestyle to the points I just mentioned means the money will run out in a few years at best, and it’s much harder downgrading your lifestyle once you’ve gotten used to better quality all around you.

Meanwhile, some NFT holders don’t even fancy selling their JPEG profile pic for almost $10m:

Let’s Talk Liquidity

Having a high net worth is great, but unless it is liquid net worth, it can be quite hard to really enjoy it.

For example, you might own a business that is worth $8 million, but that doesn’t really translate into anything practical in your life, since you can’t spend any of that money, and there’s also the risk that the valuation might change at any point in time. We’ve seen how the valuations of public companies can change drastically from one year to another in recent years. For private companies, you have the same story. This is especially true if you’ve been working towards building a company that can be acquired. At certain times the economical circumstances might mean that venture capital dries up, or this is a general dearth of acquisitions in your industry, meaning you’ll need to wait a few more years for the exit. For some companies, this can indeed drive them to the verge of collapse if they haven’t been managing their runway and cash flow property. In short – it’s a treacherous journey and you can’t really change the way you live based on your company’s theoretical valuation.

It’s worth noting that a well-known financial trick of the super-rich (typically $25m+) is to leverage their best assets to obtain loans, but this is not that easy to work out for younger people with lower net worth figures and typically in risky assets. The super-rich can leverage their own private company stock, or their public stock portfolio, real estate, etc, but again they tend to have lower-risk assets and much bigger amounts, making them way more interesting for banks and institutions who are considering lending them money.

In conclusion, the dream state seems to be $10 million in liquid assets plus a healthy cash flow that covers all your monthly costs. Even better if that monthly cash flow is as passive as possible, which would give you the free time to actually use that higher purchasing power and enjoy material possessions, travel and other experiences.

I would also like to add that having lofty net worth objectives does not mean that there are no intermediate stages and that one would only be happy and satisfied if they reach that goal. I do believe that money does buy happiness to a certain degree, but there are diminishing returns the higher you go. Financial strife is one of the most common problems for people, even contributing to the breakup of marriages, and we should all be trying to attain a level of net worth that eliminates or lessens those kinds of basic financial problems.

Once the lower levels of the hierarchy of needs are covered, we’re already in a great position and can now think of fulfilling dreams and ambitions rather than worrying about basic needs. At that point whether it’s time to kick back and relax or continue to work very hard on achieving a higher net worth level depends entirely on one’s dreams.

What’s your take on this topic? Leave a comment below to continue the discussion.