• Houston ranked best in the U.S. for building personal nest egg, San Diego came in last.
  • The rankings seek to start a conversation about wealth accumulation.
  • The Bankrate rankings analyzed 18 large metros.

Americans who are mindful of building a nest egg now have a new ranking and a new top city to look to for security in their golden years.

According to recently published research from personal finance information powerhouse Bankrate, the Houston metro area came out on top as the best place in the country for building household wealth. When the numbers were crunched, Houston led the pack of 18 large metros for its excellent job market, lowest consumer debt and high savable income.

According to Claes Bell, Bankrate’s banking analyst, this inaugural version of the ranking used a wide variety of indicators to determine the best U.S. large metro for folks in their wealth-building years. That calculation, Bell points out, is not only a function of how much an income-earner makes, but how much they spend.

That’s the point of the rankings, Bell said.

“We want to create a conversation about how people build wealth — we’re not just talking about the rich people who own Ferraris, we’re ranking cities by the conditions that need to be in place to allow households to build wealth,” he explained.

“It has to go beyond how much you are making — it’s about your whole balance sheet.”

Bell said that Bankrate used data that went back roughly five years to create the rankings. They selected criteria for what helps build personal wealth based on extensive research and interviews with a variety of experts in economics and finance. They then measured the 18 metros against reams of data.

The 18 metros were those that ranked highest on the Consumer Expenditure Survey.

These data sets came from the U.S. Census Bureau, the Bureau of Labor Statistics, RealtyTrac, the Employee Benefit Research Institute, the Urban Institute, the National Association of Realtors, S&P/Case-Shiller Home Price Index, the Federal Deposit Insurance Corp., the Department of Education and Bankrate’s proprietary data.

Houston skyline image via Shutterstock.

Houston skyline image via Shutterstock.

The indicators that were distilled down to produced the rankings included after-tax, savable income, the job market, residents’ debt, human capital, access to financial services and the local housing market.

According to the rankings, the worst large metro for people to build their net worth is San Diego, Calif. While San Diego is a great place for people who are sitting on substantial savings, it came in dead last due to residents’ low savable income after taxes, relatively high unemployment and the average debt burden.

Just because jobs were plentiful did not guarantee a city a high ranking. Bell said that his biggest surprise in the results was that New York did not grab the no. 1 spot, since he views The Big Apple as having “the broadest, deepest labor market.”

“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,” Bell explained.  “You have to look at the whole picture.”

Other places that round out the top 10 are:

  1. Houston
  2. Washington, D.C.
  3. Cleveland
  4. Detroit
  5. New York City
  6. Dallas-Fort Worth
  7. Baltimore
  8. Miami
  9. Minneapolis-St. Paul
  10. Chicago

Bell cautions that this new ranking is just one piece of the puzzle.

“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.”

Email Kimberley Sirk

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