21 car century insurance: His son is getting out

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Our friend Dominic Frisby, my go-to UK commentator on the Tom Woods Show, blew up on Twitter this morning when he posted this:

If a couple earns £300,000 between them...
…in the UK, they get to keep £182,000
…in Texas, they get to keep £224,400
That's why talent leaves the UK, and why talent goes to Texas

As he saw the post generating so much discussion, Dominic revealed why he wrote it -- he wasn't just making a random observation, as you'll see -- and it's what he'd told me a couple of months ago over lunch in London:

"My son and his family have been offered an opportunity to go to Texas and we were looking at the pros and cons. Health insurance will make part of the package, so the NHS thing is not an issue. Houses are maybe half the price so he will actually be able to afford to buy somewhere.

"Future opportunity is far greater. Salaries are higher. You keep more of what you earn and so you decide how it gets spent. Food is more expensive, as are property taxes. But all things considered, Texas overwhelmingly beats London, especially if you are someone young and ambitious looking to build a big future."

Unconvinced, financial journalist Paul Lewis chimed in with, "Would anyone in their right mind move to Texas for £40k a year? Even if USA allowed them to stay?"

But Lewis is not a serious thinker. The initial gap -- keeping about £182,000 in the UK versus £224,400 in Texas -- is only the starting point. It compounds, carries with it higher earnings potential, and is reinforced by lower housing costs and greater personal control over spending.

An extra £40,000 a year, compounded at a modest 7 percent over 30 years, grows into more than £4 million. It may seem to Lewis like a modest bonus, but for a young couple it is capital that can be directed toward housing, business, or family rather than being absorbed by further UK layers of National Insurance, VAT, council tax, and other charges that continue to hit after income tax has already been paid.

Then, too, homes in Texas can be roughly half the price of comparable properties in high-demand UK areas. Everyday costs for fuel, cars, clothing, and many goods are also lower, so the higher take-home pay stretches further (even after accounting for items such as food or property taxes, which can run higher).

And the fact is, nowadays opportunity is much greater in Texas than in the UK -- earning £300,000 in the first place is far more attainable in Texas. For someone young and looking to build a future, like Dominic's son, the combination of higher pay, lower housing costs, and greater room for advancement makes the case for Texas stronger than its tax saving alone.

That was the point Dominic made to me back in August: he said it was an outrage what the UK was doing to young people, and that his son would likely take the opportunity in Texas so he could start building his life with his family in a place where he could keep more of what he earned.

The thread itself was interesting to read, because it involved Americans defending the move to the U.S. against the social-democratic Europeans reminding everyone of their generous welfare states -- which are the very thing making their economies so stagnant and making people like Dominic's son want to leave in the first place.

One thing we can be sure of: if they have guidance counselors in the UK, they are not urging students to graduate and get a job in the U.S. so they can build up some savings.

Nowadays if you want the best opportunities -- for yourself if you're young, or for your kids if you're older -- you'll find them off the beaten path, as Dominic's son is doing by leaving his country, and as I suggest you consider doing with Praxis.

Instead of saddling yourself with debt, you can be spending that time acquiring years of experience.

Here's a career apprenticeship program that ends with a guaranteed job offer.

Your guidance counselor can't give you that.

Give this serious consideration -- I'm happy to say many people have gone through the program at my recommendation, and rave about it -- and take 30% off with code WOODS: