Why I'm Leaving California

Growing number of its residents are packing up and moving out. Experts say over the past decade, around 150,000 people have left the state. The U.S. Census Bureau says California had a net loss of 190,000 people last year.

"I'm out of here. When do you leave?"

"Soon."

"Texas or...?"

"Yeah, I'm gonna go to Texas."

Well, this is certainly not the video I was expecting to make, but it is official: I am moving out of California. This is not a decision that was taken lightly. In fact, I've rejected the idea for years because California has always been my home. I was raised in Los Angeles, I went through the LA school system. My friends are here, I built my business here, and I don't think I would have the same perspectives I do now had I grown up anywhere else. So to a large extent, growing up in Los Angeles has shaped me into who I am today.

But lately, it's been an ongoing struggle to stay, and more often than not, I've been coming up with fewer and fewer justifications of why I should not just pick up and leave to go somewhere else. Until I did just that a few weeks ago. I put down a deposit to buy a home in Las Vegas, Nevada, and in a few months that will officially be my new full-time residence. This is something I've been thinking about for a few years now, although it's always just been a distant thought that I pushed further and further behind because why fix what isn't broke?

The breaking point came when my girlfriend and I were visiting some friends in Las Vegas, and Jeremy decided to give us an impromptu home tour across some of the areas of Summerlin and Henderson. There wasn't traffic, there wasn't trash just thrown everywhere. Prices were really affordable, and something that afternoon just switched. Maybe now is the right time to make this happen.

See, previously, before the shutdown, I felt like there was an opportunity cost of leaving Los Angeles. This was an area where everyone was moving to; it was a great spot to network. Macy had a great job going into the office every day, and the thought of picking all of that up, cutting ties, and leaving was just too much. But once everything was shut down and both of us went entirely remote, there was the realization that we could work from pretty much anywhere. We don't have to be anchored to one specific city to lead a fulfilling and happy life.

Not to mention, on paper, I'm not oblivious to how much money I would be saving if I moved to a no-income tax state like many have done before me, and that's now a number that's grown to the point where I can no longer ignore the cost-benefit of moving.

Now I realize this has almost become the new trend for people to publicly talk about leaving California, and this just feeds into the notion that everyone is fleeing the state. But truth be told, as a Los Angeles resident who grew up here my entire life, who never thought they would ever leave, I could say from my own experience the benefits of living here have diminished significantly over the last few years.

And while the reasons behind this are complex, these are some of the issues that stood out in my decision. By the way, this is usually the point in the video where, if you've not already hit the like button, it helps me out tremendously. Just give it a quick tap; it's totally free, takes just a split second, and helps out the almighty YouTube algorithm. So with that said, thank you so much for doing that, and we'll begin here.

First, let's talk briefly about taxes because I'm sure this is what most of you want to hear about. So I will address it. For those who don't know, California has the highest state income tax across the entire U.S., and it's as high as 13.3 percent. Now, throughout my entire 12-year-long career, I've always been supportive of paying my fair share and making sure I support the state that's allowed me so many unique opportunities and experiences.

In fact, in a way, this is almost the cost of doing business and getting to reap the benefits of living in the city. For example, maybe someone pays an extra ten thousand dollars a year in tax, but by doing so, they're able to make an extra forty thousand dollars a year. So in those situations, the tax more than pays for itself. But lately, I've been feeling like I'm getting less and less for the taxes that are contributed, and from a cost-benefit standpoint, there's a lot I'm leaving on the table if I choose to stay.

And when it comes to the future and wanting to start a family and wanting to use that money to have a much larger impact on the world one day, the cost of taxes is something I need to evaluate. Now, on the surface, from a numbers standpoint, leaving the state would save me a lot of money. Just this year alone, I'm estimating I'll pay about four hundred thousand dollars towards California state income tax, and last year I paid about two hundred thousand dollars towards state income tax, none of which, by the way, is deductible on a federal level.

So I'm at the point where I have to closely monitor where my money is allocated and if it's worth relocating to a place where everything goes a lot further. As most of you know, I'm all about long-term compounded growth when you invest your money, and at my current income, a 300,000-dollar-a-year savings could turn into 9 million in 15 years from now. That's a lot of money that could go towards the projects, organizations, and innovations I want to directly support.

And as I continue to grow my career and expand, this is something I want to be very diligent of. Not to mention, Los Angeles taxes just about everything. They have one of the highest sales taxes in the nation at close to 10 percent, and the city also has a business tax on top of everything else that they require you to pay into if you're working within the city as an independent contractor or sole proprietor. There's just so much to keep track of, and it makes it very difficult to understand where your money is going or how it's being spent.

The second issue is also incredibly unfortunate that homelessness and crime have been a major problem of Los Angeles for as long as they've been alive. Although in the last few years, it's taken a drastically different turn. It's been nearly impossible to walk down the street without stepping past drug usage, tents, trash, and people who are not being treated appropriately.

It's an epidemic that's not been properly addressed, and the state has not found a way to remedy the situation and give people the adequate care they need. It's gotten to the point where my girlfriend does not feel safe to walk down to the grocery store at night because there are people shouting and throwing things on the sidewalk as they make their way down the street.

Subsequently, crime has also increased in downtown LA; some parts have seen more than a 200 percent increase in crime. And while the entire situation is very complex to solve, it just seems like there's so much happening all at once that it can't adequately be addressed in the way that it needs. Now, I certainly don't want this to be taken the wrong way because I am not the victim. The real victims here are the people on the streets.

But it's frustrating to see a lack of care for the mentally ill or people sleeping on the sidewalks with very few resources to turn to. Now, you would assume that California, with a 3.2 trillion dollar GDP, would have the financial means to properly handle the situation and give people the proper attention that they need. But they haven't, and it's only gotten worse.

People with severe mental illness are left on the streets to fend for themselves. People struggling with addiction are thrown to the side, and care facilities are too overcrowded to accommodate everyone. People with disabilities have nowhere to turn, so they're ignored, and they're left to beg on the beach. It's a problem that desperately needs attention, and the shutdown has only worsened everything by many magnitudes.

Now, this is a very sobering realization of what many parts of Los Angeles are now like. Here's a Google Street View image from September of 2014, and here is the exact same spot now, just a few years later. It's sad to see that we have not found a proper way to help the situation and instead we've largely just ignored the core issues or offered too little too late.

Lastly, I think it's no surprise that the cost of living in Los Angeles is really high. There's a premium that you pay to live in an area where you could drive to the beach, to the mountains, to the desert, and to Disneyland all in the same day with 75-degree weather year-round. But that cost comes at the expense of nearly everything.

The obvious one is housing. Now, I've always maintained that you can live in a high cost of living area on a budget if you're creative and you don't mind putting in the work. For example, I was able to buy my duplex in the middle of the city for zero dollars out of pocket through a series of strategic renovations and refinances that allowed me to live there for nothing while I rented out the other side.

But still, the initial purchase price of that home was enough to purchase a mansion in any other part of the country. Now, here's what's happening right now: everything in Los Angeles is dictated by parking. Every unit you build is required to have its own dedicated parking space. So, if you want to go and build a 600 square foot apartment, for example, you also have to include another 300 square feet for that resident to park their car.

So that then leads the question: where are you going to build that parking space? If you put it on ground level, that takes away from the square footage you could build in terms of living area. But then if you want to go and dig below ground, that ends up costing a significant amount of money. So, either way, that needs to be factored in the cost of building the unit, and then that cost gets passed on to the customer. But then if that cost is too expensive for someone to buy, the developer just says, "Well, it's not worth building; then I'm not gonna build anything."

Now, it's also required that each unit have a hundred square feet of planted open space on site, and fifty percent of that space must be common space. So that just means right there if you want to build a 600 square foot apartment, what you're really paying for is 1100 square feet when you account for the parking space and open common area. That just now means creating new housing in Los Angeles becomes so expensive that the developer cannot create new housing without calling it a luxury apartment building and charging a lot of money for it because otherwise they would lose money on the project.

It just becomes impossible to create any affordable housing when you're required to allocate so much space and so many resources to things that not everyone will use. Of course, then you get into the nuances of "not in my backyard" or turning a residential area of single-family homes into multi-family homes, which of course I get to a certain degree.

But still, you should be able to redevelop an existing apartment building to add more units without that being just another luxury apartment building. But Los Angeles has yet to find a way to do this, thereby driving up prices because it requires developers to build spaces that aren't given their most practical, useful purpose. Beyond that, there's also the issues of rampant wildfires, air quality issues, horrendous traffic at all hours, business tax and regulation, and a myriad of other issues, none of which, by the way, are political.

But finally, something had to give, and eventually it did. It seems like moving out of California has become more and more common now that remote working is widely accepted. I've spoken with a lot of realtors out in Las Vegas, and all of them have confirmed exactly what I've thought: most of the buyers in the one to two million dollar price point are coming from California, and they're all leaving for the same reasons as I am.

Many of those buyers are also potentially worried about increasing California tax rates, a potential wealth tax, and the unknowns of what California might try to instate. So they feel like getting out now is better than waiting, especially if they're able to operate in a remote working environment. I'm also thinking about this decision long term as well. One day, I would love to start a family, and there's the concern that California could get much worse if nothing is done.

Crime rates, traffic, trash, air quality, congestion, taxes, and business regulation make it very difficult to want to stay, and the difference in terms of quality of life is just too significant to ignore. Now, if you're curious why Las Vegas, that's a good question. I wanted to be somewhere driving distance of Los Angeles because I own property here.

My girlfriend and I both have family here, and it's easy to drive here and vacation for a weekend without much forethought. I like the idea of just being a four-hour drive away from everything in the event something came up, and if I move to any other area, it would require us to book a plane ticket and a lot more planning than simply just jumping in the car last minute and then navigating on autopilot.

We also both have a lot of friends and business connections in Las Vegas, some of which just happen to have moved from LA to Vegas years before us, so it just kind of makes some sense to move with the tide and join them. Now, I'm still going to keep all of my properties. I'm still going to keep my home here, so we have a place to return back to for vacations. But for all other purposes, it just makes too much sense to pick up and move to Nevada.

Now, on the positive side here, geographically, California is a beautiful place to live that has a lot to offer, and I believe there's always going to be demand for people who want to live by the coast. But for me, the opportunity cost of not moving just got to a place where it's worth it to move.

Now, when it comes to you, absolutely nothing changes. I'm still going to be making the exact same content, and I'm building out an even better filming set in Las Vegas. I'm also going to recreate a space that's exactly the same over there as I have right here, so visually, you're not going to even be able to tell there was a difference.

But I also can't say that I'm not sad to see so many people leaving and for the city I grew up in to degrade so quickly and for the quality of living to go down so fast while also feeling like there's no real solution to work towards. I understand it's such a delicate, complex situation, but to see such a sharp decline so quickly was rather shocking.

But I'm also very excited about this next journey of life and for everything else to follow. So with that said, you guys, thank you so much for watching. I really appreciate it. As always, make sure to destroy the like button, subscribe button, and notification bell.

Also, feel free to add me on Instagram. I posted pretty much daily, so if you want to be a part of it there, feel free to add me there as on my second channel, The Graham Stephan Show. I post there every single day that I'm not posting here, so if you want to see a brand new video from me every single day, make sure to add yourself to that.

And lastly, if you guys want two free stocks, use the link down below in the description, and Webull is going to be giving you two free stocks worth at minimum eight dollars each and all the way up to one thousand six hundred dollars when you deposit a hundred dollars on the platform. So if you want those two free stocks worth eight dollars each, that promotion ends on October 15th, so make sure to use the link down below and claim your two free stocks. Let me know which two you get. Thank you so much for watching, and until next time.