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There were some good points in here: - Differentiating based on location can create an HR risk/burden. - After you subtract out living costs, people living in

There were some good points in here: - Differentiating based on location can create an HR risk/burden. - After you subtract out living costs, people living in a more desirable area still end up better compensated because they live in a more desirable area, with the associated cost difference subsidized by the employer.

pathseeker 8y ago
>people living in a more desirable area still end up better compensated because they live in a more desirable area, That doesn't make any sense. The cost of living isn't just because there is more value there. It's often times because of idiotic housing policies. A software developer living in LA is receiving no better compensation than one living in Miami just because the housing costs more.
- PNWChris 8y ago
  I disagree with this assertion. Say you move to a lower cost of living area, say 6% cheaper, and your wages decrease by the same amount as the change in COL. Now all your expenses are 6% lower, but your money left after expenses is also 6% lower. That means that despite being no worse off in terms of quality of life, your savings went down 6%. Strictly speaking, if you maintain the same relative ratio of costs to savings, it’s always rational to take the highest income, even if it’s in a higher COL area. This is because costs can be measured as a percentage of income, but savings ought to be measured as an absolute value.
  - dasil003 8y ago
    Exactly. This is why it's a pretty good idea to move to Silicon Valley when you're young, rent out the cheapest room you can find, get a job at FAANG and bank 75% of your salary. After 10 years you will have a nest egg and resume that allows you true freedom in what you want to do going forward.
    - freedomben 8y ago
      This is great advice for you younger people to pay attention to. I wish I would have done this when I could.
- cameldrv 8y ago
  Presumably they value living in LA, or they would move to Miami.
- gremlinsinc 8y ago
  Say you earn enough for an 800k to 1.3 mill home in sv... you live a meager life because of the costs for your home, but in 30 years you have your home paid off, you're nearing retirement you decide -- I'm gonna sell my home and move to utah. You buy a 200k home in utah.. you sell your home for 20% more than you paid for it maybe even more since housing prices are only going up in SV.. ... -- just the value in your home which you'd NEVER have been able to afford on a dev salary in Utah or somewhere else has forced you into buying a home worth a mill and a quarter, now it's an asset and sure you had to go hungry some months and just break even on bills to afford it, but you're set for retirement where as some others wouldn't be so well off...
  - actsasbuffoon 8y ago
    Your home is a somewhat poor investment due to low liquidity. It takes time to sell a house, and in the process you lose your home. A home requires expensive upkeep. They can be destroyed through natural disasters, or rendered undesirable by changing fashion tastes. Investing your money in a broad index fund over 30 years would almost certainly provide much more growth. You can sell your position in a matter of minutes, there’s no maintenance cost, etc. Short term market fluctuations could reduce value for a time, but over a 30 year time horizon, you’re basically certain to do well.
    - djrogers 8y ago
      You can't live in an index fund, so you'll be putting substantially less away after paying rent on a house equivalent to the one GP purchased.
    - gremlinsinc 8y ago
      You can't tell me someone who bought a home in 1980 in SF for 200 or 300k isn't better off financially in 2018 than someone who put 200k in funds and no extra investments at all in the same year. A 200k home in 1980 is probably worth about 2 million today in SF. It's for this reason I'll never move anywhere near there, I just don't see myself being to afford it even, if I do become a rockstar ai developer or something. I personally would like though for people outside SF to get more remote opps at higher rates than elsewhere, maybe even just drive up the freelance/conctract rates, although I think a lot of contract rates have to do with levels of imposter syndrome, I'm an intermediate dev, who is probably comparable to some senior devs by now, but still feel like I'm charging too much if I go above $50/hour, but part of me knows I can get $100/hour.

pathseeker 8y ago

>people living in a more desirable area still end up better compensated because they live in a more desirable area, That doesn't make any sense. The cost of living isn't just because there is more value there. It's often times because of idiotic housing policies. A software developer living in LA is receiving no better compensation than one living in Miami just because the housing costs more.

PNWChris 8y ago
I disagree with this assertion. Say you move to a lower cost of living area, say 6% cheaper, and your wages decrease by the same amount as the change in COL. Now all your expenses are 6% lower, but your money left after expenses is also 6% lower. That means that despite being no worse off in terms of quality of life, your savings went down 6%. Strictly speaking, if you maintain the same relative ratio of costs to savings, it’s always rational to take the highest income, even if it’s in a higher COL area. This is because costs can be measured as a percentage of income, but savings ought to be measured as an absolute value.
- dasil003 8y ago
  Exactly. This is why it's a pretty good idea to move to Silicon Valley when you're young, rent out the cheapest room you can find, get a job at FAANG and bank 75% of your salary. After 10 years you will have a nest egg and resume that allows you true freedom in what you want to do going forward.
  - freedomben 8y ago
    This is great advice for you younger people to pay attention to. I wish I would have done this when I could.
cameldrv 8y ago
Presumably they value living in LA, or they would move to Miami.
gremlinsinc 8y ago
Say you earn enough for an 800k to 1.3 mill home in sv... you live a meager life because of the costs for your home, but in 30 years you have your home paid off, you're nearing retirement you decide -- I'm gonna sell my home and move to utah. You buy a 200k home in utah.. you sell your home for 20% more than you paid for it maybe even more since housing prices are only going up in SV.. ... -- just the value in your home which you'd NEVER have been able to afford on a dev salary in Utah or somewhere else has forced you into buying a home worth a mill and a quarter, now it's an asset and sure you had to go hungry some months and just break even on bills to afford it, but you're set for retirement where as some others wouldn't be so well off...
- actsasbuffoon 8y ago
  Your home is a somewhat poor investment due to low liquidity. It takes time to sell a house, and in the process you lose your home. A home requires expensive upkeep. They can be destroyed through natural disasters, or rendered undesirable by changing fashion tastes. Investing your money in a broad index fund over 30 years would almost certainly provide much more growth. You can sell your position in a matter of minutes, there’s no maintenance cost, etc. Short term market fluctuations could reduce value for a time, but over a 30 year time horizon, you’re basically certain to do well.
  - djrogers 8y ago
    You can't live in an index fund, so you'll be putting substantially less away after paying rent on a house equivalent to the one GP purchased.
  - gremlinsinc 8y ago
    You can't tell me someone who bought a home in 1980 in SF for 200 or 300k isn't better off financially in 2018 than someone who put 200k in funds and no extra investments at all in the same year. A 200k home in 1980 is probably worth about 2 million today in SF. It's for this reason I'll never move anywhere near there, I just don't see myself being to afford it even, if I do become a rockstar ai developer or something. I personally would like though for people outside SF to get more remote opps at higher rates than elsewhere, maybe even just drive up the freelance/conctract rates, although I think a lot of contract rates have to do with levels of imposter syndrome, I'm an intermediate dev, who is probably comparable to some senior devs by now, but still feel like I'm charging too much if I go above $50/hour, but part of me knows I can get $100/hour.