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Unless you mean both spouses should earn around 200k and thus bringing in a FAANG-equivalent income of 400k, I really don't know how you could afford what you a

Unless you mean both spouses should earn around 200k and thus bringing in a FAANG-equivalent income of 400k, I really don't know how you could afford what you are saying on a single 150k-200k salary (and perhaps another 50k for your spouse's salary, since not everybody works in tech). After paying for CA taxes, fed taxes, kids' schools, rent, car expenses, 401k contributions, I really don't know how you would come up with the savings necessary for the huge down payment required for a house there. Just last week, a friend of mine got outbid on a ~1.5M house in the East Bay Area because another buyer came in and offered a down payment of $700k (!!), whereas my friend just had a more traditional 20%. Good luck getting to those savings on a 150k startup salary and mostly worthless options. In my experience, and I certainly respect yours, people just need to stop working for startups and go to big corporations, period. And I speak as someone who had a low 7 figure liquidation event from a startup, and I'm still so against startups, because that liquidation event still didn't match the compensation I could have gotten as FAANG all along.

wolco 8y ago
Why would it matter 20% or 700k as a seller I get the full amount from the bank.
- deanmoriarty 8y ago
  I believe the buyer was also slightly more aggressive, i.e. was willing to let the deal close faster than my friend, who rightfully wanted to take his time before getting into the biggest purchase of his life (inspections and such). That, paired with the massive downpayment the buyer was ready to immediately put in earnest money, was enough to convince the seller. Real estate transactions are not always that rational. Also, many folks in the Bay Area just go all cash, and that's obviously much better for the seller since it means very fast closing. But this if off topic, because a person on a 150k startup salary in the Bay Area won't be able to participate in any of these discussions.
- TuringNYC 8y ago
  Because most offers are "subject to favorable financing" and if the person doesnt get favorable financing, the offer falls thru and the seller ends up holding the housing longer w/o a seller and paying the carry. People will often sell at a lower absolute price (slightly lower) for all-cash offers without the issues of financing. Also, financing can fall thru for silly reasons (eg the bank found some crazy lien from the 1940s) and want it cleared before they offer financing.
eanzenberg 8y ago
>>FAANG-equivalent income of 400k LUL dude, I hear this shit being parroted ad-nauseum. The amount of FAANG people that hit this level or more is like, 5-10%. Take a look at the top 5-10% of non-FAANG companies and you'll see those employees are also hitting this mark. There's nothing special about FAANG. I understand lots of FAANG employees parrot this around to make themselves feel better about their life choices.
- deanmoriarty 8y ago
  According to my experience (and again, that's the only thing I know), that's not even remotely true. When I interviewed a couple years ago, I made sure to interview at FAANG (specifically Facebook, Google, Netflix) and I also interviewed at half dozen big public companies in the same couple months (among which Oracle, Salesforce, Cisco, Juniper, Palo Alto Networks). I didn't interview at any private company (Uber, AirBnB, ...), since I was coming out of the startup world and I wanted liquid compensation. The FAANG offers that came back were all significantly higher than the other ones, and the constant was certainly me (a software engineer with 7 years of experience at the time and a BS + MS in Computer Engineering). All the FAANG offers (luckily I got an offer from all the 3 I interviewed at) were at a total liquid compensation of $~400-450k/y (annualized cash + RSU), and I'm certainly not in the top 10% of their tech workforce, not even remotely close, I come in as a generalist with some ops experience who spent a couple months studying algorithms and data structures. I don't even have an active GitHub profile. All the other non-FAANG tech companies (I got an offer from 4) were at a total liquid compensation of $~220k/y (annualized cash + RSU). The only other companies who matched the FAANG offers were a couple of hedge funds on the East Coast, but I didn't want to relocate and I wanted to keep working for a tech company. In the end, I joined Google. So, I'm just reporting my own personal experience based on the data I directly experienced (I have PDFs of all the offers :-)). Feel free to ask any follow up question, I love educating software engineers on their real market value, since I think many sell themselves too short in this thriving market.
  - tarr11 8y ago
    How has your TC changed since you’ve joined Google?
matthewowen 8y ago
Yes, based on my own experience and that of my peers, I think it's very plausible that you would have accumulated savings to get you 20% down on a $1MM place over the course of (say) spending the last six to eight years in San Francisco with household income in the 150 to 200k range. You might have to make a tradeoff of (eg) not maxing your 401k contributions if you're on the lower end. I mean, we're talking probably about saving $20k/yr when you factor in compounded returns from (eg) the S&P500. I agree that this math does _not_ work as well if you're moving to San Francisco and already have a family but no preexisting savings, so don't do that. It's also true that if you rely on financing you will get outbid on some houses. But I know plenty of people who've successfully bought using financing.
- matthewowen 8y ago
  also, self reply to observe: not saying this means you should or should not work at a startup. just that the idea that you can't live a decent lifestyle at startups is not true.

wolco 8y ago

Why would it matter 20% or 700k as a seller I get the full amount from the bank.

deanmoriarty 8y ago
I believe the buyer was also slightly more aggressive, i.e. was willing to let the deal close faster than my friend, who rightfully wanted to take his time before getting into the biggest purchase of his life (inspections and such). That, paired with the massive downpayment the buyer was ready to immediately put in earnest money, was enough to convince the seller. Real estate transactions are not always that rational. Also, many folks in the Bay Area just go all cash, and that's obviously much better for the seller since it means very fast closing. But this if off topic, because a person on a 150k startup salary in the Bay Area won't be able to participate in any of these discussions.
TuringNYC 8y ago
Because most offers are "subject to favorable financing" and if the person doesnt get favorable financing, the offer falls thru and the seller ends up holding the housing longer w/o a seller and paying the carry. People will often sell at a lower absolute price (slightly lower) for all-cash offers without the issues of financing. Also, financing can fall thru for silly reasons (eg the bank found some crazy lien from the 1940s) and want it cleared before they offer financing.

eanzenberg 8y ago

>>FAANG-equivalent income of 400k LUL dude, I hear this shit being parroted ad-nauseum. The amount of FAANG people that hit this level or more is like, 5-10%. Take a look at the top 5-10% of non-FAANG companies and you'll see those employees are also hitting this mark. There's nothing special about FAANG. I understand lots of FAANG employees parrot this around to make themselves feel better about their life choices.

deanmoriarty 8y ago
According to my experience (and again, that's the only thing I know), that's not even remotely true. When I interviewed a couple years ago, I made sure to interview at FAANG (specifically Facebook, Google, Netflix) and I also interviewed at half dozen big public companies in the same couple months (among which Oracle, Salesforce, Cisco, Juniper, Palo Alto Networks). I didn't interview at any private company (Uber, AirBnB, ...), since I was coming out of the startup world and I wanted liquid compensation. The FAANG offers that came back were all significantly higher than the other ones, and the constant was certainly me (a software engineer with 7 years of experience at the time and a BS + MS in Computer Engineering). All the FAANG offers (luckily I got an offer from all the 3 I interviewed at) were at a total liquid compensation of $~400-450k/y (annualized cash + RSU), and I'm certainly not in the top 10% of their tech workforce, not even remotely close, I come in as a generalist with some ops experience who spent a couple months studying algorithms and data structures. I don't even have an active GitHub profile. All the other non-FAANG tech companies (I got an offer from 4) were at a total liquid compensation of $~220k/y (annualized cash + RSU). The only other companies who matched the FAANG offers were a couple of hedge funds on the East Coast, but I didn't want to relocate and I wanted to keep working for a tech company. In the end, I joined Google. So, I'm just reporting my own personal experience based on the data I directly experienced (I have PDFs of all the offers :-)). Feel free to ask any follow up question, I love educating software engineers on their real market value, since I think many sell themselves too short in this thriving market.
- tarr11 8y ago
  How has your TC changed since you’ve joined Google?

matthewowen 8y ago

Yes, based on my own experience and that of my peers, I think it's very plausible that you would have accumulated savings to get you 20% down on a $1MM place over the course of (say) spending the last six to eight years in San Francisco with household income in the 150 to 200k range. You might have to make a tradeoff of (eg) not maxing your 401k contributions if you're on the lower end. I mean, we're talking probably about saving $20k/yr when you factor in compounded returns from (eg) the S&P500. I agree that this math does _not_ work as well if you're moving to San Francisco and already have a family but no preexisting savings, so don't do that. It's also true that if you rely on financing you will get outbid on some houses. But I know plenty of people who've successfully bought using financing.

matthewowen 8y ago
also, self reply to observe: not saying this means you should or should not work at a startup. just that the idea that you can't live a decent lifestyle at startups is not true.