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Not adjusted to salary costs and taxes. There was an article a few months ago talking about how adjusted for living expenses and taxes, omaha had higher paid en

Not adjusted to salary costs and taxes. There was an article a few months ago talking about how adjusted for living expenses and taxes, omaha had higher paid engineers than san francisco.

mason55 9y ago
The thing that usually gets left out there is savings. If you take SF salary + SF costs and cut everything in half then you also end up with half the money left for savings. The thing about saving for retirement is that you can contribute huge amounts of absolute dollars in a high COL place and then move to a low COL place to spend it when you retire.
- conanbatt 9y ago
  I dont have the article at hand, but obviously the goal is highest nominal savings, not highest nominal savings rate. The other part thats virtually impossible to account for is quality of life. Hard winters and big houses in Omaha vs Great weather and 1 bedroom with other people in SF, etc.
  - froindt 9y ago
    It's best to simply look at it relative to expenses. If you want to retire in HCOL, you could do it in the same amount of time as someone in LCOL if you save the same % of your income. If you want to move to LCOL, estimate the expenses there. I don't know of strict rule of percentage or nominal dollars that works except for using annual expenses as the measuring stick.
- dcosson 9y ago
  Or, you can play the pyramid scheme game in the high cost area and hope you win. For example, buy a house in the bay area before 2010, it'll be paid off by the time you retire and because of Prop 13 the property taxes will never go up and you can happily retire there. But snark aside, this is a good point. If you keep all your budget percentages the same, then living in a high COL area you can save/invest more and still also have more spending money left over for hobbies or travel.
  - muzz 9y ago
    Snark aside, you rightly allude to housing as an investment rather than an expense. Even those who bought post-2010 are still up by varying amounts, although those amounts are all likely 6 figures given the median home prices and recent increases. One doesn't need to pay off house. Upon retirement, just sell it and cash out and move to a cheaper area.
vasilipupkin 9y ago
nonsense, because those adjustments don't include massive equity compensation, in the form of RSUs, options, etc. I doubt you have many jobs in Omaha offering mid-high six figure total comp.
valuearb 9y ago
The math is too complex to really know, because of all the other factors. Among them, 1) Your chances of becoming a millionaire through stock options are likely higher in silicon valley. Evaluating the optionality value of stock options at various companies isn't something a journalist can do. 2) If you are able to save 20% of your salary in Omaha, but only 15% in San Francisco, you are likely to save much more in San Francisco. Then there is all the questions of quality of life, where it's easier to find new jobs in your field, where you are more likely to meet and work with the best in your field, etc.
- mikestew 9y ago
  1) Your chances of becoming a millionaire through stock options are likely higher in silicon valley. And your odds of winning the lottery are better if you play Ohio Lotto rather than California Lotto. However, we're kind of ignoring the big elephant in the room... Evaluating the optionality value of stock options at various companies isn't something a journalist can do. A journalist can probably do a better job of investigating that than your average tech employee. If you are able to save 20% of your salary in Omaha, but only 15% in San Francisco, you are likely to save much more in San Francisco. And if a frog had wings, it wouldn't bump its ass when it hops. From what I'm hearing, having never lived there but having investigate the possibility, saving anything at all while paying SF housing prices can be difficult. Sure, you can save a few bucks renting with six house mates, but then we're back to QOL. Because I don't know if you've ever played the "what could we get somewhere else for what our current house is supposed worth?" game. In our case we could exchange the 1200 sq. ft. house in Redmond, WA for a 5400 sq. ft. house on a couple acres in a swank suburb of Indianapolis. I don't think we'd have any problem making the payment on Indianapolis wages, either. The difference is that you'll probably be working for an insurance company doing LOB apps. But, hey, it's a living and you get to go home to a 5400 sq.ft. house. Now, despite all my contrariness, I'm in full agreement that it's hard to quantify beyond a gut feeling. For instance, we used to live in the Indianapolis of my example above. Notice that we don't live there anymore. Some of it is subjective, because some like the hussle and bussle of a big city like SF, others (like me) would do it only because that's where the money is at. But if the money is getting eaten up by housing costs, but OTOH what about the opportunity cost of living in Ohio and not SF...argggh, you could drive yourself crazy. I think at the end of the day, live where you want to be at the moment. A software techy isn't going to starve no matter where in the U. S. they live.
throwawayjava 9y ago
> adjusted for living expenses I've done the math on this and I've never been able to figure a way that $100k in <generic midwestern city> gets me to retirement quicker than $200k in Seattle or even SF. I just don't buy it. As far as I'm concerned, it's a bullshit excuse midwestern companies use to under-pay their engineers.
- conanbatt 9y ago
  At the same living arrangement? And the marginal tax rate is higher. I would say it works out dollar-to-dollar. What you have to include is weather, cultural opportunities, etc.
  - throwawayjava 9y ago
    > At the same living arrangement? No, but you answer the question of what that's still a fair comparison yourself: > What you have to include is weather, cultural opportunities, etc. Turns out that a small apartment feels a lot less like a jail when the weather's bearable almost the entire year and there's world-class hiking 30 minutes away. > And the marginal tax rate is higher. 1. Which I include. In the worst case, this merely wipes out the delta between the real bonuses you get on the coast and the (conspicuously tiny) bonuses you get in the mid-west. The difference in tax is gone before you even start comparing salaries! 2. And that's not even fair to the coasts, because higher taxes do, in fact, buy some differences in quality of life.
kendallpark 9y ago
I always thought that moving out to Silicon Valley would be like "doing your time" or something. You use it to artificially inflate your salary, maybe get a Google or Facebook badge on your resume, then move back to somewhere with a sane cost of living and salary++.

Not adjusted to salary costs and taxes. There was an article a few months ago talking about how adjusted for living expenses and taxes, omaha had higher paid engineers than san francisco.

mason55 9y ago

The thing that usually gets left out there is savings. If you take SF salary + SF costs and cut everything in half then you also end up with half the money left for savings. The thing about saving for retirement is that you can contribute huge amounts of absolute dollars in a high COL place and then move to a low COL place to spend it when you retire.

conanbatt 9y ago
I dont have the article at hand, but obviously the goal is highest nominal savings, not highest nominal savings rate. The other part thats virtually impossible to account for is quality of life. Hard winters and big houses in Omaha vs Great weather and 1 bedroom with other people in SF, etc.
- froindt 9y ago
  It's best to simply look at it relative to expenses. If you want to retire in HCOL, you could do it in the same amount of time as someone in LCOL if you save the same % of your income. If you want to move to LCOL, estimate the expenses there. I don't know of strict rule of percentage or nominal dollars that works except for using annual expenses as the measuring stick.
dcosson 9y ago
Or, you can play the pyramid scheme game in the high cost area and hope you win. For example, buy a house in the bay area before 2010, it'll be paid off by the time you retire and because of Prop 13 the property taxes will never go up and you can happily retire there. But snark aside, this is a good point. If you keep all your budget percentages the same, then living in a high COL area you can save/invest more and still also have more spending money left over for hobbies or travel.
- muzz 9y ago
  Snark aside, you rightly allude to housing as an investment rather than an expense. Even those who bought post-2010 are still up by varying amounts, although those amounts are all likely 6 figures given the median home prices and recent increases. One doesn't need to pay off house. Upon retirement, just sell it and cash out and move to a cheaper area.

vasilipupkin 9y ago

nonsense, because those adjustments don't include massive equity compensation, in the form of RSUs, options, etc. I doubt you have many jobs in Omaha offering mid-high six figure total comp.

valuearb 9y ago

The math is too complex to really know, because of all the other factors. Among them, 1) Your chances of becoming a millionaire through stock options are likely higher in silicon valley. Evaluating the optionality value of stock options at various companies isn't something a journalist can do. 2) If you are able to save 20% of your salary in Omaha, but only 15% in San Francisco, you are likely to save much more in San Francisco. Then there is all the questions of quality of life, where it's easier to find new jobs in your field, where you are more likely to meet and work with the best in your field, etc.

mikestew 9y ago
1) Your chances of becoming a millionaire through stock options are likely higher in silicon valley. And your odds of winning the lottery are better if you play Ohio Lotto rather than California Lotto. However, we're kind of ignoring the big elephant in the room... Evaluating the optionality value of stock options at various companies isn't something a journalist can do. A journalist can probably do a better job of investigating that than your average tech employee. If you are able to save 20% of your salary in Omaha, but only 15% in San Francisco, you are likely to save much more in San Francisco. And if a frog had wings, it wouldn't bump its ass when it hops. From what I'm hearing, having never lived there but having investigate the possibility, saving anything at all while paying SF housing prices can be difficult. Sure, you can save a few bucks renting with six house mates, but then we're back to QOL. Because I don't know if you've ever played the "what could we get somewhere else for what our current house is supposed worth?" game. In our case we could exchange the 1200 sq. ft. house in Redmond, WA for a 5400 sq. ft. house on a couple acres in a swank suburb of Indianapolis. I don't think we'd have any problem making the payment on Indianapolis wages, either. The difference is that you'll probably be working for an insurance company doing LOB apps. But, hey, it's a living and you get to go home to a 5400 sq.ft. house. Now, despite all my contrariness, I'm in full agreement that it's hard to quantify beyond a gut feeling. For instance, we used to live in the Indianapolis of my example above. Notice that we don't live there anymore. Some of it is subjective, because some like the hussle and bussle of a big city like SF, others (like me) would do it only because that's where the money is at. But if the money is getting eaten up by housing costs, but OTOH what about the opportunity cost of living in Ohio and not SF...argggh, you could drive yourself crazy. I think at the end of the day, live where you want to be at the moment. A software techy isn't going to starve no matter where in the U. S. they live.

throwawayjava 9y ago

> adjusted for living expenses I've done the math on this and I've never been able to figure a way that $100k in <generic midwestern city> gets me to retirement quicker than $200k in Seattle or even SF. I just don't buy it. As far as I'm concerned, it's a bullshit excuse midwestern companies use to under-pay their engineers.

conanbatt 9y ago
At the same living arrangement? And the marginal tax rate is higher. I would say it works out dollar-to-dollar. What you have to include is weather, cultural opportunities, etc.
- throwawayjava 9y ago
  > At the same living arrangement? No, but you answer the question of what that's still a fair comparison yourself: > What you have to include is weather, cultural opportunities, etc. Turns out that a small apartment feels a lot less like a jail when the weather's bearable almost the entire year and there's world-class hiking 30 minutes away. > And the marginal tax rate is higher. 1. Which I include. In the worst case, this merely wipes out the delta between the real bonuses you get on the coast and the (conspicuously tiny) bonuses you get in the mid-west. The difference in tax is gone before you even start comparing salaries! 2. And that's not even fair to the coasts, because higher taxes do, in fact, buy some differences in quality of life.

kendallpark 9y ago

I always thought that moving out to Silicon Valley would be like "doing your time" or something. You use it to artificially inflate your salary, maybe get a Google or Facebook badge on your resume, then move back to somewhere with a sane cost of living and salary++.