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> I'll then go check salaries using a job hunting site for the same positions in SV and they pay the same or less after adjusting for cost of living That's the

> I'll then go check salaries using a job hunting site for the same positions in SV and they pay the same or less after adjusting for cost of living That's the problem. Salaries on job hunting sites are wildly inaccurate. Glassdoor lists FANG compensation as 2-3x less than what they actually pay. Also, the important metric isn't COL adjusted income; it's the total amount of money that's left over to save/invest after all other expenses. So it doesn't matter that CA has high income tax or that rent costs $50k per year when you're still able to save significantly more than anywhere else in the U.S.

closeparen 8y ago
Under specific assumptions: 1) You don’t aspire to own a home here, as that will eat easily 100% or more of your savings. 2) You plan to spend your savings in a cheaper place. USD is a convenient shorthand for purchasing power, but breaks down under huge regional COL differences. A $200k savings account in the Bay Area is like a $50k savings account elsewhere: about enough to think about setting up a middle-class grown-up lifestyle.
- throwaway713 8y ago
  Both good points that I forgot to mention. I implicitly assumed most people would eventually move away from SV, but if you plan to stay there your whole life, then you'll have a much more difficult time buying a home and/or retiring. And having children adds a whole new dimension of financial difficulties.
  - closeparen 8y ago
    I can’t imagine what else I’d do “after” this. I intend to be with the industry for a full career; unless and until it moves, that means being here.
  - secabeen 8y ago
    It also adds a bunch of social difficulties, unless you try to pull of the entire make-bank/move-elsewhere cycle before they reach elementary school age. Once they are in school, they start making their own friendships and relationships, and it becomes much more impactful for everyone to make that move to the new low-cost area, leaving everything they know behind.
- neffy 8y ago
  ..and you´re lucky enough with the timing for the business cycle to give you that long. Which probably won´t be the case for most people working there now.
- joshuamorton 8y ago
  Unless you're talking about a home, 200k in the bay is more than 50k almost anywhere else. There are very few things that cost 4x more on regional differences, and housing may actually be the only one. (Other major expenses, like food, transit/gas, and leisure activities like travel or vacations are much less price elastic, 0-30% more)
  - closeparen 8y ago
    But it would be irresponsible to take advantage of any of that, because one needs every last dollar saved towards housing.
    - joshuamorton 8y ago
      Not really. 200k is a down payment on a million dollar home. Double that is a 2 million dollar home, which will let you buy in most places. Thats achievable in 5 years for someone who is working towards that goal specifically, less if you have a partner who also works. Anecdotally, I know two couples (out of not many total) that purchased within 2 years of moving to the bay. One had some savings, and that plus the first years stock vests was enough for a down payment on a condo. The other took ~2 years to buy a home from very little prior savings, which was possible because both had decent incomes. So I'm dubious as to the doom and gloom, at least for married professionals. (Of course, this ignores the reality that for anyone not working in tech or 1-2 other fields, these are wholly out of the picture, and that's hugely problematic! But for the calculation of CoL for someone who is picking between tech companies, I think people overestimate the costs of the bay, and I'm not really sure why)
      - closeparen 8y ago
        Sure, dual tech income families are doing fine. But with gender ratios as they are, not many of those can exist. Remember that, as you save, housing appreciates. I've run the numbers; the lines only intersect at all for more conservative % increases, between 8 and 12 years out.
burlesona 8y ago
I made the move to the Bay Area with a family in my 30s. It’s not perfect, but we’re saving dramatically more than we could anywhere else. I don’t know how long we’ll stay, but at this rate 5 years would be enough to set us up really well almost anywhere else in the US. I wish I’d gotten into software sooner. If you come out here at 22, live with roommates and stay until you’re 30, you probably take anywhere from $400-700k in savings with you to then have a much easier life somewhere else. That’s why people do it, especially when they’re young. Also in terms of math, you need to know that the big companies here pay about 50% via salary and the rest via bonus and stock, so the salary numbers you see are only the “live day to day” money. The other half of your income comes in big checks every quarter or so, which makes it easy to shovel that straight into savings.
- ikeyany 8y ago
  Spending your entire life as a young adult doing that sounds dystopian. May that never become the norm.
  - joshuamorton 8y ago
    Eh it depends, I live with a roommate because I choose to. We're friends, we do things together, it's nice. I could live without one, my rent would be marginally more, though I'd still probably bank close to the same. But the social aspect is really nice.
    - pmiller2 8y ago
      Living with roommates by choice isn’t that bad. Needing to live with roommates for financial reasons when one really would rather have a private space to come home to is hell.
  - jniedrauer 8y ago
    It's better than spending your life as a young adult working degrading jobs and starving. In the broad scheme of things, being a programmer is not so bad.
  - 8y ago

closeparen 8y ago

Under specific assumptions: 1) You don’t aspire to own a home here, as that will eat easily 100% or more of your savings. 2) You plan to spend your savings in a cheaper place. USD is a convenient shorthand for purchasing power, but breaks down under huge regional COL differences. A $200k savings account in the Bay Area is like a $50k savings account elsewhere: about enough to think about setting up a middle-class grown-up lifestyle.

throwaway713 8y ago
Both good points that I forgot to mention. I implicitly assumed most people would eventually move away from SV, but if you plan to stay there your whole life, then you'll have a much more difficult time buying a home and/or retiring. And having children adds a whole new dimension of financial difficulties.
- closeparen 8y ago
  I can’t imagine what else I’d do “after” this. I intend to be with the industry for a full career; unless and until it moves, that means being here.
- secabeen 8y ago
  It also adds a bunch of social difficulties, unless you try to pull of the entire make-bank/move-elsewhere cycle before they reach elementary school age. Once they are in school, they start making their own friendships and relationships, and it becomes much more impactful for everyone to make that move to the new low-cost area, leaving everything they know behind.
neffy 8y ago
..and you´re lucky enough with the timing for the business cycle to give you that long. Which probably won´t be the case for most people working there now.
joshuamorton 8y ago
Unless you're talking about a home, 200k in the bay is more than 50k almost anywhere else. There are very few things that cost 4x more on regional differences, and housing may actually be the only one. (Other major expenses, like food, transit/gas, and leisure activities like travel or vacations are much less price elastic, 0-30% more)
- closeparen 8y ago
  But it would be irresponsible to take advantage of any of that, because one needs every last dollar saved towards housing.
  - joshuamorton 8y ago
    Not really. 200k is a down payment on a million dollar home. Double that is a 2 million dollar home, which will let you buy in most places. Thats achievable in 5 years for someone who is working towards that goal specifically, less if you have a partner who also works. Anecdotally, I know two couples (out of not many total) that purchased within 2 years of moving to the bay. One had some savings, and that plus the first years stock vests was enough for a down payment on a condo. The other took ~2 years to buy a home from very little prior savings, which was possible because both had decent incomes. So I'm dubious as to the doom and gloom, at least for married professionals. (Of course, this ignores the reality that for anyone not working in tech or 1-2 other fields, these are wholly out of the picture, and that's hugely problematic! But for the calculation of CoL for someone who is picking between tech companies, I think people overestimate the costs of the bay, and I'm not really sure why)
    - closeparen 8y ago
      Sure, dual tech income families are doing fine. But with gender ratios as they are, not many of those can exist. Remember that, as you save, housing appreciates. I've run the numbers; the lines only intersect at all for more conservative % increases, between 8 and 12 years out.

burlesona 8y ago

I made the move to the Bay Area with a family in my 30s. It’s not perfect, but we’re saving dramatically more than we could anywhere else. I don’t know how long we’ll stay, but at this rate 5 years would be enough to set us up really well almost anywhere else in the US. I wish I’d gotten into software sooner. If you come out here at 22, live with roommates and stay until you’re 30, you probably take anywhere from $400-700k in savings with you to then have a much easier life somewhere else. That’s why people do it, especially when they’re young. Also in terms of math, you need to know that the big companies here pay about 50% via salary and the rest via bonus and stock, so the salary numbers you see are only the “live day to day” money. The other half of your income comes in big checks every quarter or so, which makes it easy to shovel that straight into savings.

ikeyany 8y ago
Spending your entire life as a young adult doing that sounds dystopian. May that never become the norm.
- joshuamorton 8y ago
  Eh it depends, I live with a roommate because I choose to. We're friends, we do things together, it's nice. I could live without one, my rent would be marginally more, though I'd still probably bank close to the same. But the social aspect is really nice.
  - pmiller2 8y ago
    Living with roommates by choice isn’t that bad. Needing to live with roommates for financial reasons when one really would rather have a private space to come home to is hell.
- jniedrauer 8y ago
  It's better than spending your life as a young adult working degrading jobs and starving. In the broad scheme of things, being a programmer is not so bad.
- 8y ago