5 best U.S. cities for building wealth
The banking and tech cities of New York City and San Francisco come to mind when one envisions living a life in luxury. But neither is probably the best place to live for those looking to build wealth.
As Bankrate.com banking analyst Claes Bell put it: "Living in a killer job market is great. But if you're spending half your income on rent, it's going to be hard to save and invest. You have to look at the whole picture."
What follows is a Bankrate.com ranking of the largest metro areas in the U.S. according to how strong of an environment they provide for making and saving money. The factors considered include after-tax savable income and the local markets for jobs and housing.
"Many of the cities that ranked high in the study may not be synonymous with wealth in the public mind, but they do a better overall job of creating an environment for typical households to get ahead financially," said Bell.
Click ahead for a look at the five best U.S. cities for building wealth.
New York City
No. 5 on the list, New York City doesn't score so well when it comes to housing, debt loads and access to financial services. But the Big Apple redeems itself when it comes to human capital, with educational institutions and productivity among the city's impressive factors, according to Bankrate.com's analysis.
Detroit
No. 4 on the ranking is Detroit, which despite the highest unemployment rate among the 18 metro areas, manages to deflect that disheartening statistic with a high placing in the "savable income" category and the top spot in housing. As Bankrate.com's Bell explains: "For those who do have jobs, the cost of living is low. Say you're able to get a nice middle-class home for $80,000 in a nice neighborhood of Detroit -- you'd be paying $800,000 for the same thing in San Francisco. It makes a big difference in net worth over time."
Cleveland
No. 3 Cleveland scores at the top for access to financial services. It also places highly when it comes to savable incomes and debt burdens, offsetting less favorable numbers in the housing and human capital departments.
Washington, D.C.
No. 2 Washington, D.C., came in at the top for factors that affect how much money one can save. The nation's capital ranked reasonably well in all the other categories with the exception of debt burden, where it placed at the bottom.
Houston
No. 1 Houston ranked in the top five in every category other than access to financial services, where it placed in the 14th slot. But the city also known for being home to NASA came in first in terms of the lowest average consumer debt.
If you're curious about the metro areas that ranked sixth through 18th on the list for building wealth, click "Next" one more time.
San Diego
"Just because a city ranks at the bottom doesn't mean it's a bad place to live, or that you can't make a good living there," said Bell. "The best city for a particular person to build wealth is going to depend a lot on their walk of life, occupation, education and a whole host of other factors."
No. 18 San Diego
No. 17 Phoenix
No. 16 Los Angeles
No. 15 Philadelphia
No. 14 Atlanta
No. 13 San Francisco
No. 12 Seattle
No. 11 Boston
No. 10 Chicago
No. 9 Minneapolis-St. Paul
No. 8 Miama
No. 7 Baltimore
No. 6 Dallas-Fort Worth