6 ms·

It's not hard to live well on $117K in SF either. That's over $6K a month after tax. There are so many people living perfectly good lives on so much less. If yo

It's not hard to live well on $117K in SF either. That's over $6K a month after tax. There are so many people living perfectly good lives on so much less. If you can't make $6k a month last easily without dependents you have really poor money management skills.

sithadmin 8y ago
It all comes down to what 'living well' entails. 'Living well' on $6k in net income someplace like Houston, Chicago, Denver, etc. is far, far nicer than what you can manage in SF or the Bay Area in general.
- librish 8y ago
  And why does that matter in the context of this discussion? Who is claiming otherwise?
  - pm90 8y ago
    Good point. Everyone seems to want to have the same kind of life everywhere. You probably can't own a huge McMansion in SF Bay (well not anywhere convenient), but the city (and region) provides other benefits (great culture, food, weather, density of tech jobs etc) which are hard to factor in financial calculation.
closeparen 8y ago
Two assumptions about "live well": we want to be on track for homeownership, and we'll go for median rent rather than scraping the bottom of the market. $6000 income ($731) 401k contribution of 15% discounted by 50% total marginal tax rate ($2083) savings towards a goal of $150,000 in six years for a down-payment ($3200) rent on a median 1-bedroom apartment ------ -$14 How'd I do?
- simonsarris 8y ago
  It looks like there are hundreds of 1 bedroom apartments for less than $3000 a month. https://www.zillow.com/homes/for_rent/San-Francisco/20330_rid/0_singlestory/paymenta_sort/37.842913,-122.329919,37.707608,-122.536739_rect/1_p/ https://www.zillow.com/homes/for_rent/San-Francisco/20330_ri... Why are you using 3200 a month?
  - closeparen 8y ago
    We stipulated a middling apartment rather than low-end. It's (slightly below) average [0] [1]. It's also around what the military thinks a junior enlisted man should pay [2]. In reality most people choose a well-below-average place, live with roommates, aren't actually on track for homeownership, or some combination of the above. [0] https://www.rentjungle.com/average-rent-in-san-francisco-rent-trends/ https://www.rentjungle.com/average-rent-in-san-francisco-ren... [1] https://www.zumper.com/blog/2018/01/zumper-national-rent-report-january-2018/ https://www.zumper.com/blog/2018/01/zumper-national-rent-rep... [2] https://www.federalpay.org/military/calculator?grade=E-1&years_experience=2+or+less&year=2017&zip=94105&is_dependent=0&annualize=1&service=Army https://www.federalpay.org/military/calculator?grade=E-1&yea...
- librish 8y ago
  You're expecting to have a 47% savings rate, and at the same time refuse to make any concession in how you're living (get a studio, pick a lower cost area, get roommates). I think that's a very high bar for defining "live well".
  - deleted 8y ago
    [deleted]
  - closeparen 8y ago
    The goal was to achieve baseline middle-class financial health norms (homeownership, retirement). The savings rate that requires turned out to be astronomical. That's my point. Try another scenario: Madison, WI, where entry-level pay is $80k and the median home is $250k. 4702 income (717) 15% 401k contribution discounted by marginal tax rate (700) savings goal of $50k in six years for a down payment (1017) 1-bedroom rent ------- 2268 left to spend SF is a very significant lifestyle sacrifice. In a more reasonable market, you could afford baseline middle-class financial health, median-quality living arrangements, and some luxury spending all at the same time. In SF it's "pick at most two." Obviously that's still enough for a lot of people (myself included) or we wouldn't be doing it. But in normal places, those are not tradeoffs that people making even half our incomes need to face. And sure, SF has urban amenities that Madison doesn't, but if you live in a premium location with lots of shops in walking distance, you can't afford to shop at them. At least not on $6,000/mo.
    - librish 8y ago
      This is only true because you've defined homeownership in your current job market as a necessity. If you either forgo it, or choose to save for a mortgage in another area suddenly SF comes out way on top.
      - closeparen 8y ago
        You could have even more to spend by foregoing retirement savings, but would you? If you did, how would it feel? Living large on an irresponsible budget is not the same as living well. Or are you saying renting as a long-term plan actually is healthy/responsible? Maybe I have just internalized too much American Dream propaganda. But with SF's rate of rent and price growth, the calculators say "buy even if renting is free."

sithadmin 8y ago

It all comes down to what 'living well' entails. 'Living well' on $6k in net income someplace like Houston, Chicago, Denver, etc. is far, far nicer than what you can manage in SF or the Bay Area in general.

librish 8y ago
And why does that matter in the context of this discussion? Who is claiming otherwise?
- pm90 8y ago
  Good point. Everyone seems to want to have the same kind of life everywhere. You probably can't own a huge McMansion in SF Bay (well not anywhere convenient), but the city (and region) provides other benefits (great culture, food, weather, density of tech jobs etc) which are hard to factor in financial calculation.

closeparen 8y ago

Two assumptions about "live well": we want to be on track for homeownership, and we'll go for median rent rather than scraping the bottom of the market. $6000 income ($731) 401k contribution of 15% discounted by 50% total marginal tax rate ($2083) savings towards a goal of $150,000 in six years for a down-payment ($3200) rent on a median 1-bedroom apartment ------ -$14 How'd I do?

simonsarris 8y ago
It looks like there are hundreds of 1 bedroom apartments for less than $3000 a month. https://www.zillow.com/homes/for_rent/San-Francisco/20330_rid/0_singlestory/paymenta_sort/37.842913,-122.329919,37.707608,-122.536739_rect/1_p/ https://www.zillow.com/homes/for_rent/San-Francisco/20330_ri... Why are you using 3200 a month?
- closeparen 8y ago
  We stipulated a middling apartment rather than low-end. It's (slightly below) average [0] [1]. It's also around what the military thinks a junior enlisted man should pay [2]. In reality most people choose a well-below-average place, live with roommates, aren't actually on track for homeownership, or some combination of the above. [0] https://www.rentjungle.com/average-rent-in-san-francisco-rent-trends/ https://www.rentjungle.com/average-rent-in-san-francisco-ren... [1] https://www.zumper.com/blog/2018/01/zumper-national-rent-report-january-2018/ https://www.zumper.com/blog/2018/01/zumper-national-rent-rep... [2] https://www.federalpay.org/military/calculator?grade=E-1&years_experience=2+or+less&year=2017&zip=94105&is_dependent=0&annualize=1&service=Army https://www.federalpay.org/military/calculator?grade=E-1&yea...
librish 8y ago
You're expecting to have a 47% savings rate, and at the same time refuse to make any concession in how you're living (get a studio, pick a lower cost area, get roommates). I think that's a very high bar for defining "live well".
- deleted 8y ago
  [deleted]
- closeparen 8y ago
  The goal was to achieve baseline middle-class financial health norms (homeownership, retirement). The savings rate that requires turned out to be astronomical. That's my point. Try another scenario: Madison, WI, where entry-level pay is $80k and the median home is $250k. 4702 income (717) 15% 401k contribution discounted by marginal tax rate (700) savings goal of $50k in six years for a down payment (1017) 1-bedroom rent ------- 2268 left to spend SF is a very significant lifestyle sacrifice. In a more reasonable market, you could afford baseline middle-class financial health, median-quality living arrangements, and some luxury spending all at the same time. In SF it's "pick at most two." Obviously that's still enough for a lot of people (myself included) or we wouldn't be doing it. But in normal places, those are not tradeoffs that people making even half our incomes need to face. And sure, SF has urban amenities that Madison doesn't, but if you live in a premium location with lots of shops in walking distance, you can't afford to shop at them. At least not on $6,000/mo.
  - librish 8y ago
    This is only true because you've defined homeownership in your current job market as a necessity. If you either forgo it, or choose to save for a mortgage in another area suddenly SF comes out way on top.
    - closeparen 8y ago
      You could have even more to spend by foregoing retirement savings, but would you? If you did, how would it feel? Living large on an irresponsible budget is not the same as living well. Or are you saying renting as a long-term plan actually is healthy/responsible? Maybe I have just internalized too much American Dream propaganda. But with SF's rate of rent and price growth, the calculators say "buy even if renting is free."